Section 147 of the Companies Act, 2013
Section 147 of the Companies Act, 2013 deals with the Punishment for Contravention of Provisions Relating to Auditors.
🔹 Section 147 – Punishment for Contravention
This section prescribes penalties for companies, officers, and auditors in case of violation of provisions from Sections 139 to 146, which deal with the appointment, qualifications, and duties of auditors.
✅ Key Provisions of Section 147:
🏢 1. Punishment for Company and Its Officers (Section 147(1)):
If a company contravenes any provision of Sections 139 to 146:
The company is liable to a fine of ₹25,000 to ₹5,00,000.
Every officer in default is punishable with:
Imprisonment up to 1 year
or
Fine from ₹10,000 to ₹1,00,000
or
Both
🧑💼 2. Punishment for Auditors (Section 147(2)):
If an auditor contravenes any provisions of Sections 139 to 146:
Auditor shall be liable to a fine of ₹25,000 to ₹5,00,000.
If the contravention is done knowingly or willfully with the intent to deceive:
Imprisonment up to 1 year
and/or
Fine from ₹1,00,000 to ₹25,00,000.
⚠️ 3. Liability to Refund and Pay Damages (Section 147(3)):
If the auditor has contravened provisions knowingly or willfully with intent to deceive:
He shall be liable to:
Refund remuneration received to the company.
Pay damages to the company, statutory bodies, or other affected persons.
🚫 4. Firms as Auditors (Section 147(4)):
If a firm is the appointed auditor:
Liability shall rest on the concerned partner(s) who acted fraudulently or with intent to deceive.
📌 Important Context:
Sections 139 to 146 relate to:
Appointment of auditors
Auditor's eligibility and disqualifications
Tenure and rotation of auditors
Reporting responsibilities
Auditor's powers and duties
Auditor's attendance in general meetings
Violation of any of these leads to penalties under Section 147.
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