Punishment for contravention (Section 147 of the Companies Act, 2013) :
A new section 147 of the Companies Act, 2013 came into force from 1st April, 2014 which provides for punishment for contravention. According to this section:
(i) Penalty on company [Section 147(1)]:
If any of the provisions of sections 139 to 146 (both inclusive) is contravened, the company shall be punishable with fine which shall not be less than ` 25,000 but which may extend to ` 5 Lacs.
(ii) Penalty on officers [Section 147(1)]:
If any of the provisions of sections 139 to 146 (both inclusive) is contravened, every officer of the company who is in default shall be punishable with
(1) imprisonment for a term which may extend to 1 year or
(2) With fine which shall not be less than ` 10,000 but which may extend to ` 1 Lacs;
or
(3) Both with imprisonment and fine.
(iii) Penalty on auditor [Section 147(2) & (3)]:
(a) If an auditor of a company contravenes any of the provisions of section 139, section 143, section 144 or section 145, the auditor shall be punishable with fine which shall not be less than ` 25,000 but which may extend to ` 5 Lacs.
(b) If an auditor has contravened such provisions knowingly or willfully with t he intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with
(1) imprisonment for a term which may extend to 1 year and
(2) fine which shall not be less than ` 1 Lac but which may extend to ` 25 Lacs.
(c) Further, where an auditor has been convicted as above, he shall be liable to—
(1) refund the remuneration received by him to the company; and
(2) pay for damages to the company, statutory bodies or authorities or to any other persons for loss arising out of incorrect or misleading statements of particulars made in his audit report.
(iv) The Central Government shall, by notification, specify any statutory body or authority or an officer for ensuring prompt payment of damages to the company or the persons. Such body, authority or officer shall after payment of damages to such company or persons file a report with the Central Government in respect of making such damages in such manner as may be specified in the said notification. [Section 147(4)]
(v) Liability of Audit firm [Section 147(5)]:
Where, in case of audit of a company being conducted by an audit firm, it is proved that the partner or partners of the audit firm has or have acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to or by, the company or its directors or officers, the liability, whether civil or criminal as provided in the Companies Act, 2013, or in any other law for the time being in force, for such act shall be of the partner or partners concerned of the audit firm and of the firm jointly and severally.