penalty of submition of late dvat 51

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Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2010 the statutory auditor of a private limited company resigned before expiry of his term.

what is the secretarial compliance for appointment of new auditor.suppose audit work is pending

manoj

manoj (Querist)
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11 February 2010 I do our client sales tax case year 2006-07. In this year client submit dvat 51 for submit of c-form after due date. At the time of assessment STO refuse to consider c-form against sale they penaly all amount and create a demand. now I want to go in appeal in form 38 objection file and this order. can I received the detail in which dvat act is wrong order he impose only penalty not reject.

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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11 February 2010 Manoj Ji,
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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 When a statutory auditor of a private limited company resigns before the expiry of their term, there are specific steps and compliance requirements under the Companies Act, 2013 that need to be followed for the appointment of a new auditor. Here’s a detailed overview:

### **1. **Compliance for Appointment of a New Auditor**

**a. **Filing of Resignation:**

- **Resignation Notice:** The resigning auditor must submit a resignation letter to the company, and the company must file this resignation with the Registrar of Companies (ROC) in the prescribed format (Form ADT-3) within 30 days of receiving the resignation letter.

**b. **Appointment of New Auditor:**

- **Board Meeting:** The Board of Directors must convene a Board meeting to consider the resignation of the existing auditor and to appoint a new auditor.

- **Shareholders' Approval:** A new auditor must be appointed by the shareholders in the Annual General Meeting (AGM) or through a Special General Meeting (SGM) if the AGM is not due soon. The appointment must be made within 30 days from the date of resignation of the previous auditor. If the AGM is pending, the appointment can be made in the AGM.

- **Filing with ROC:** Once the new auditor is appointed, the company must file Form ADT-1 with the ROC within 30 days of the appointment of the new auditor. This form should include details of the new auditor and their consent to act as the auditor of the company.

**c. **Handling Pending Audit Work:**

- **Incomplete Audit Work:** If the audit work of the previous auditor is pending, the new auditor must be briefed about the pending audit work. The new auditor will need to complete the audit work from where the previous auditor left off.

- **Communication with Previous Auditor:** It’s good practice to communicate with the previous auditor to obtain any relevant information or work papers they might have.

**d. **Secretarial Compliance:**

- **Board Resolution:** Ensure that a board resolution is passed for the appointment of the new auditor and for the resignation of the old auditor.

- **Minutes of Meetings:** Proper minutes of the board meetings and general meetings should be recorded to reflect the decisions taken regarding the auditor’s resignation and appointment.

- **Documentation:** Maintain all necessary documentation such as resignation letters, consent letters from the new auditor, board resolutions, and filings with the ROC.

**e. **Update Statutory Registers:**

- **Registers and Records:** Update the statutory registers to reflect the new auditor’s details and ensure that all records are accurate and up-to-date.

### **2. **Steps to Follow:**

1. **Receive and File Resignation:** Obtain the resignation letter from the old auditor and file it with the ROC using Form ADT-3.
2. **Board Meeting:** Hold a board meeting to discuss and approve the resignation and to propose the appointment of a new auditor.
3. **Shareholders' Approval:** Obtain approval from the shareholders for the new auditor in the AGM or an SGM.
4. **File with ROC:** File Form ADT-1 with the ROC to notify the appointment of the new auditor.
5. **Complete Pending Work:** Work with the new auditor to complete any pending audit work from the previous auditor.

### **3. **Penalties and Consequences:**

- **Late Filing:** If the new auditor is not appointed within the specified time or if Form ADT-1 is not filed within 30 days, the company may face penalties and additional compliance issues.
- **Incomplete Audit:** If the audit work is not completed on time, it could affect the company’s financial statements and compliance status.

### **Summary**

When a statutory auditor resigns, the company must ensure timely appointment of a new auditor, handle pending audit work appropriately, and comply with all statutory requirements. This includes filing necessary forms with the ROC, obtaining shareholder approval, and maintaining proper records of all decisions and communications. By following these steps, the company can ensure compliance and manage the transition smoothly.