The Board of Discipline (BoD) and Disciplinary Committee (DC) of the Institute of Chartered Accountants of India (ICAI) monitors and adjudicates cases of professional misconduct among Chartered Accountants. 68 such misconduct orders regarding misconduct of Chartered Accountants and CA Firms were pronounced by ICAI in 2023.
Professional misconduct, as defined by the Institute of Chartered Accountants of India (ICAI), refers to any act or omission by a chartered accountant in connection with his professional duties that violates the established standards, guidelines, or ethical principles set forth by the ICAI.
The ICAI, being the regulatory body for chartered accountants in India, outlines specific provisions related to professional misconduct in the Chartered Accountants Act, 1949.
As per Section 22 of the Chartered Accountants Act, 1949 “professional or other misconduct” shall include any act or profession omission as in any of the schedule but nothing in this Section shall be construed to limit in any way powers conferred to enquire into conduct of any Member of ICAI under any circumstances.
Read Article: What Constitutes Professional Misconduct for ICAI Members? A Legal Exploration by NCLAT
The detailed procedures to be adopted by all the three limbs of the Disciplinary Mechanism of ICAI – Board of Discipline, Disciplinary Committee and Director of Discipline, in carrying out its functions have been prescribed in the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 notified by the Central Government in terms of the provisions of Section 21(4) of the Chartered Accountants Act, 1949
Here is a summary of Professional Misconduct Cases of the Institute of Chartered Accountants of India (ICAI) member Chartered Accountants (CAs) reported at taxscan.in in 2023 —
In the case of In Re: CA. Sunil Kumar Goyal, the Disciplinary Committee of Institute of Chartered Accountants of India (ICAI) has reprimanded a Chartered Accountant (CA) for soliciting the clients by advertising and offering free services in the areas of Accounts/Tax/Returns GST/ Audit/New Carriers through whatsapp pamphlets.
In the case of The Assistant General Manager, UCO Bank Versus CA. V Kandaswamy, the Institute of Chartered Accountants (ICAI) Disciplinary Committee found that the Chartered Accountant (CA) was guilty of professional misconduct during the bank audit. The CA failed to report the irregularities in the bank while sanctioning loans and other issues too. Thus, the ICAI reprimanded the CA.
In the case notified on New Delhi, the 16th June, 2023 by ICAI in the official Gazette, the Institute of Chartered Accountants of India (ICAI), removed the membership of Two Chartered Accountants on grounds of professional misconduct. The ICAI removed the memberships of CA for a period of 01(one) year and also imposed a fine of Rs. 1,00,000 (Rupees One Lakhs) and another CA for a period of 4 years.
The following codes of conduct were found in contravention with by the Chartered Accountants —
(7) does not exercise due diligence, or is grossly negligent in the conduct of his professional duties;
(8) fails to obtain sufficient information which is necessary for expression of an opinion or its exceptions are sufficiently material to negate the expression of an opinion; and
(9) fails to invite attention to any material departure from the generally accepted procedure of audit applicable to the circumstances.
One CA in Lucknow was removed from the register of members for a year and fined Rs. 1,00,000 for violating items 6, 7, and 8 of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
In Durgapur, another CA was fined Rs. 3,00,000 for professional misconduct under Clause 1 of Part II of the Second Schedule to the Chartered Accountants Act, 1949. Failure to pay the penalty within a month resulted in the CA’s name being removed for a month under the Chartered Accountants Regulations, 1988.
The Institute of Chartered Accountants of India (ICAI) has removed the name of 6 Chartered Accountants from the register of members. The Disciplinary Committee of ICAI found the Chartered Accountants guilty of professional misconduct, according to sources.
In Shri Ramesh Gholap, Deputy Registrar of Companies v. CA. Girish Ravindra Amonker, the Board of Discipline of the Institute of Chartered Accountants of India (ICAI) has recently held that a Chartered Accountant in practice can be a Director Simpliciter or Professional Director, without being charged guilty of professional misconduct.
In the case of Shri P A Thawani, General Manager, Bank of Baroda Versus CA. Sandhya Jayesh Vasandani, the disciplinary committee of Institute of Chartered Accountant of India (ICAI) found guilty of professional misconduct, the Chartered Accountant (CA) who signed the financial statements which were not signed by the directors.
The Committee had highlighted that the Respondent had neglected to disclose important financial information in the financial statements in addition to engaging in egregious negligence in the performance of her professional obligations.
In Shri Dinesh Chandra, Assistant General Manager, Punjab National Bank, Chennai v. CA. Raj Kumar Bagri, the Institute of Chartered Accountants of India (ICAI) reprimanded the Chartered Accountant (CA) along with a fine as he was found to be guilty of professional misconduct falling within the meaning of Clause (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949 in the absence of documentary evidence showing verification of records by the auditor.
In the case of Shri V. Srivijay, Dy. Director of Income Tax (Inv.) v. CA. Joydeep Roy the Institute of Chartered Accountants of India (ICAI) has removed a Chartered Accountant from the register of members for two years along with a fine of Rs. 25,000/(Rupees Twenty-Five Thousand) as he failed to exercise due diligence while Certifying Form 15C.
In the case of In Re CA. Buchayya Chetty Atmakuri, The Institute of Chartered Accountants of India (ICAI) imposed sanctions on a Chartered Accountant (CA) who conducted over 45 tax audits under Section 44AB of the Income Tax Act, 1961, during the financial years 2010-11 and 2011-2012, contrary to the Council’s guidelines.
The Disciplinary Committee of ICAI concluded that the actions of the Respondent clearly amounted to misconduct as defined by Clause (1) of Part II of the Second Schedule. After considering the case’s details, evidence, and the Committee’s conclusions, the Committee chose to levy a penalty of Rs. 90,000/- on the Respondent.
In Sh. Anil Yadav, ICLS Dy. ROC, Versus CA. Pramod Kumar Jhawar, the Disciplinary Committee of ICAI has concluded that the Respondent is not guilty of Professional and Other Misconduct falling within the meaning of Item (7) of Part I of Second Schedule and Item (2) of Part IV of First Schedule to the Chartered Accountants Act, 1949.
The CA’s testimony under oath indicated that the Respondent fulfilled his professional responsibilities diligently regarding the certification of Form no. INC-22A for the Company, and the Committee found no instances of negligence on the Respondent’s part.
In the matter against CA Surajit Datta, The Chartered Accountant Examiner was penalized by the Institute of Chartered Accountants of India (ICAI) for moving answer sheets of Intermediate Examination from one location to another and giving the paper-checking task to a separate party who is not affiliated with ICAI in any way.
The CA was given a Rs. 25,000 fine by the ICAI, and his name was also taken from the Register of Members for three months.
In the matter of In Re CA. Ramakrushna Patra M, the Institute of Chartered Accountants of India (ICAI) determined that the Chartered Accountant (CA) is not guilty of any professional misconduct as defined in Items (7) of Part 1 of the Second Schedule to the Chartered Accountants Act, 1949. The Disciplinary Committee expressed the view that the matter relates solely to a misclassification of Trade Receivables, which does not constitute a case of significant negligence.
In Shri Saud Ahmad, Joint Director (Legal & Prosecution),SFIO Versus CA. Shekhar Bhargava,
The Institute of Chartered Accountants of India (ICAI) reprimanded a Chartered Accountant (CA), imposed a fine of Rupees 50,000 and observed that expression of opinion in audit reports without sufficient information is professional misconduct.
The Institute of Chartered Accountants of India (ICAI), reprimanded a Chartered Accountant (CA), imposed a fine of Rupees one lakh and held that non-adherence to Reserve Bank of India (RBI) Circular prior to issue of audit report is professional misconduct in the matter of CA Vijaykant Jagannath Kulkarni.
The Institute of Chartered Accountants of India (ICAI) imposed a fine on Chartered Accountants (CA) on the act of Certification of Net Worth without Corroborative Evidence, in the matter of Shri T. Rajah Balaji, Superintendent of Police, Central Bureau of Investigation, Versus CA. Prakash Pesala.
In Shri Vishwas Y. Navalkar, Versus CA Rohit Tryambak Moghe, the Institute of Chartered Accountants of India (ICAI), reprimanded a Chartered Accountant (CA), and observed that failure to report non-disclosure and non-submission of annual return under Foreign Regulation Rules is professional misconduct.
The Institute of Chartered Accountants of India (ICAI) imposed a 50000 fine on failure to verify scrap sale transactions during an audit is gross professional misconduct under Chartered Accountants (CA) Act in Sh. K R Manjunath Versus CA. Sudhakar C.
The Institute of Chartered Accountants of India (ICAI) imposed a 2.25 Lakh fine on Chartered Accountants (CA) for exceeding the limit of auditing in a financial year in the matter of CA. Subhra Kumar Kundu in Re.
In the case of The Assistant General Manager, UCO Bank, VersusCA. V Kandaswamy, the Institute of Chartered Accountants of India (ICAI) reprimanded a Chartered Accountant (CA) on the ground of failure to perform professional duties by a concurrent auditor of the UCO Bank during the period of audit.
The Institute of Chartered Accountants of India reprimanded a Chartered Accountant (CA) and observed that signing Income Tax Returns (ITR) as true copies without consent of the client falls within the ambit of professional misconduct, in Shri Mandeep Singh Chatwal Versus CA. Mayur Kailas Bamb.
The Superintendent Of Police, Central Bureau of Investigation Versus CA. NARASIMHAN T R L, the Committee viewed that the said conduct of the Respondent makes him Guilty as he malafidely provided a platform to the management of the Company because based on certificates issued by him containing misleading information, the Company could procure funds from sources not otherwise available to it.
The Institute of Chartered Accountants of India (ICAI), in the case In Re: CA. Mukesh P. Shah, observed that a Tax Auditor holding interests and business relations with entities having business connections with the company is guilty of professional misconduct.
The Institute of Chartered Accountants of India (ICAI) dropped proceedings against a Chartered Accountant and observed that expressing dissenting opinions against ICAI President and Council Members will not amount to Professional Misconduct, in In Re: CA. Rajkumar S. Adukia.
The Institute of Chartered Accountants of India (ICAI) reprimanded two Chartered Accountants (CA) on ground of violation of provisions of Companies Act, 2013 in the appointment as Statutory Auditor.
The Board reprimanded the Chartered Accountants CA Poonam Kumari and CA Vidhi Churiwala and noted that “Keeping in view the above submissions and observations, the Board was of the view that it is clear that the Respondent no. 1 and Respondent no.2 had failed to ensure compliance of Section 140 of the Companies Act, 2013 before accepting the appointment as a Statutory Auditor of the Company for the F.Y. 2015-16. Hence, the Respondent no. 1 and Respondent no.2 are Guilty of Professional Misconduct falling within the meaning of Item (9) of Part I of the First Schedule to the Chartered Accountants Act, 1949”, in the case of CA. Gaurav Sharma Versus CA. Poonam Kumari Gupta, CA. Vidhi Churiwala and
Mis PKVC & co.
The Institute of Chartered Accountants of India (ICAI) reprimanded a Chartered Accountant (CA) for non-issuing of Revised Audit Report, in Sh. Surendra Gopal Gowda Versus CA. Parnika Gajanan Adkar.
The Institute of Chartered Accountants of India(ICAI) removed the name of a Chartered Accountant for one year and noted that failure to detect fraud in financial statements is professional misconduct in the case In Re: CA. Mukesh P. Shah.
The Institute of Chartered Accountants of India (ICAI), in Shri K.R. Manjunath, Asstt. General Manager & RM-II versus CA. B. Prashanth Hegde, ruled that a Chartered Accountant engaging in any other profession without seeking permission of Council is guilty of professional misconduct.
The Institute of Chartered Accountants of India (ICAI) has held that furnishing false audit reports without proper verification amounts to professional misconduct and reprimanded the Chartered Accountants (CA) along with a fine in In Re: CA. Prashant Purushottam Khavte.
The Institute of Chartered Accountants of India (ICAI) has held that failure to verify books of account before certifying ended up in unjust enrichment by refunding service tax amounts to guilty of Professional Misconduct in Commissioner, CGST & Central Excise Commissionerate Versus CA. Pronab Kumar Bandyopadhyay.
The Institute of Chartered Accountants of India (ICAI), reprimanded Chartered Accountant (CA) Rajan Sachdeva and ruled that the failure to communicate acceptance of assignments with previous auditors is professional misconduct, in CA. Mahesh Sahai & ors and M/s V. Sahai Tripathi & co. (FRN 000262N) Versus CA. Rajan Sachdeva.
The Institute of Chartered Accountants of India (ICAI) reprimanded Chartered Accountant (CA ) Rakesh Patni for failure to submit an exception report stating the running of a Non-Banking Finance Institution (NBFC) without registration, in CA. Rakeshkumar Shantilal Patni.
The Institute of Chartered Accountants of India (ICAI), in Shri Veera Durga Naresh Khanna S
Director, CVM Solutions Private Limited Versus CA. L. Janardhan Rao, observed that Chartered Accountant (CA), acting as statutory auditor guilty of professional misconduct in not detecting wrong financial statements in audit reports.
In the matter of Shri Ajay Kumar Neema Versus CA. Anit Kumar Bangad, The Institute of Chartered Accountants of India (ICAI ) imposed a fine on Chartered Accountants (CA) and held that the casual approach of Chartered Accountant (CA) in not attending proceedings on the allegation of forged signature amounts to Professional Misconduct under the Chartered Accountants Act, 1949.
In the matter of Shri K K V Varaprasad, Assistant General Manager, UCO Bank, Versus CA. Bharath Kumar P Jain, Partner, Mis. BO & co. LLP, The Committee comprising Smt. Anita Kapur, Dr. K. Rajeswara Rao, CA. Vishal Doshi and CA. Sushil Kumar Goyal viewed that the misconduct on the part of the Respondent has been held and established within the meaning of Item (7) of Part-I of the Second Schedule to the Chartered Accountants Act, 1949 for reporting irregularities in Income Tax Return (ITR) while Sanctioning loans based on Fake ITR and Challan.
The Institute of Chartered Accountants of India (ICAI) removed a Chartered Accountant (CA), in The Superintendent of Police, Central Bureau of Investigation Versus CA. Syed Shahul Meeran K from the CA membership Register and imposed a fine on the professional misconduct of certifying books of Account without accurate verification.
The Institute of Chartered Accountants of India (ICAI) banned a Chartered Accountant (CA), for one year for Violation of Chartered Accountants (CA) Act, 1949 on valuation of answer book of Chartered Accountant (CA) exam while traveling through Train, in the case of In Re: CA. Hazra Timir Kanti.
In the matter CA. Nishant Maitin Vs CA. Ashish Anand Pathak & M/s A. A. Pathak & co. , the Institute of Chartered Accountants of India (ICAI) reprimanded a Chartered Accountant (CA) for professional misconduct on the ground of accepting appointment as Auditor without complying with the requirements under the Companies Act.
A Two-Member Bench of the Board comprising CA. Rajendra Kumar P, Presiding Officer and Dolly Chakrabarty (IAAS, retd.), Government Nominee observed that “As per the Findings of the Board as contained in its report, it is the duty of the incoming auditor to ascertain prior to the acceptance of the appointment as the auditor of the company that his appointment is proper, which in the instant case was clearly missing.
The Institute of Chartered Accountants of India(ICAI) has held that failure to report material misstatement in financial statements amounts to professional misconduct, in the matter of Shri Sanjeev Gupta, Chief Operating Officer, Marine Plus Versus CA. Deelipkumar Bhikubhai Desai.
The coram comprising Mrs Rani Nair, Shri Arun Kumar, C A Cotha S. Srinivas observed that “the Respondent not only failed to report material misstatement in Financial Statements but also is grossly negligent in adherence of disclosure requirement relating to MSME in Annual Statements of Accounts as per Section 15, 16, and 22 of MSME Act, 2006.”
The Institute of Chartered Accountants of India ruled that a Chartered Accountant acting as intermediary seeking investments from independent personnel is guilty of professional misconduct, in the case of CA. Akhilesh Agarwal v. CA. Radhey Shyam Bansal.
The Board consisting of CA Rajendra Kumar P, Presiding Officer and Ms. Dolly Chakrabarty (IAAS, retd.), Government Nominee observed that builder the role of the Respondent as a facilitator/intermediary in the said transaction is undisputed. Also, in his Written Statement submitted at Prima Facie Opinion stage, the Respondent clearly admitted his presence in the meeting with the builder and of arranging the said meeting.
The Institute of Chartered Accountants of India (ICAI) removed the name of the Chartered Accountant (CA) from the Register of Members and imposed a penalty of Rs 50,000 on fraud committed in consultancy services, in the matter of Shri Dharmendra Nagawat vs CA. Praveen Kumar Singhvi.
The Respondent took undue advantage of being Chartered Accountant and kept the complainant and his wife on false assurance to invest their money in property and earn best profit and make adjustments in the Income Tax etc. The Respondent always succeeded in taking money from the Complainant and his wife as and when they received the same from the builder.
The Institute of Chartered Accountants of India (ICAI) has rebuked Chartered Accountant Abhay Batra for taking up a full-time position as Chief Financial Officer (CFO) while concurrently holding a Full-time Certificate of Practice (CoP). This action is considered a breach of professional conduct, in the matter of In Re: CA. Abhay Batra.
In this regard, the Board took into view Regulation 190A of Chartered Accountants Regulations, 1988, which deals with the provision for Chartered Accountants in practice not to engage in any other business or occupation, and the same reads as below: “A Chartered Accountant in practice shall not engage in any business or occupation other than the profession of accountancy, except with the permission granted in accordance with a resolution of the Council”
The Institute of Chartered Accountants of India (ICAI) has reprimanded the Chartered Accountant guilty of providing certificate of expenditure without mentioning the addressee’s name.
The Board viewed that the act of the Respondent- CA of issuing a Certificate, addressed to unidentified users indicates that the same had been issued by him in collusion with the other directors of the company, in the case of Shri H.G. Nagaraju Vs CA. Lingaraj M. Pujari.
The Institute of Chartered Accountants of India (ICAI) took action against the Chartered Accountant found guilty of splicing the work of assignment of preparation of statement of affairs of the company by giving a gold chain to a lawyer in Shri N. Anjaneya Verma Versus CA. Vinod Kumar Vishwanath.
However, the Board noted that the Director (Discipline) held the Respondent Prima Facie Guilty in respect of the charge of gifting gold chain to lawyer and not guilty in respect of blackmailing. The said view of the Director(Discipline) had been accepted by the Board.
The Institute of Chartered Accountants of India (ICAI) has suspended the senior auditor of a UAE company for 3 months.
In terms of the provisions of Section 21B(3) of the Chartered Accountants Act, 1949 read with Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee has held that the CA from the register, in the case of CA. Bala Balaji M.
The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has cleared a Chartered Accountant from professional misconduct for alleged incorporation of shell companies.
In this case of Sh. K G Joseph Jackson, ROC, Chennai Versus CA. Puvanenthiran S N , It was noted that the Respondent in his submissions stated that his Digital Signature Certificate (DSC) was used without his consent to certify the alleged forms for incorporation of the Company. As per him, the DSC was obtained in his name without his permission and was misused. The Respondent claimed that someone had acquired his DSC using his credentials without his consent and knowledge and intentionally misused it.
The Board of Discipline of the Institute of Chartered Accountants of India (ICAI) has cleared the CA Firm M/s Carvalho Associates of all charges with respect to a case of alleged fee sharing/referral by way of an agreement with M/s Kreston International Ltd.
Bonus Content: How to File ICAI Misconduct Complaint – Online and Offline
Physical Filing
The Complaint in Form ‘I ’ and its enclosures should be filed in triplicate, duly signed by the Complainant and should be in English language. Any document/s in Hindi or in any Regional Language should be sent along with English translation thereof duly verified as `true copy’ to save time. Further, as per Rule 4, Complaint should be accompanied by a Total fee of Rs. 2,950/- (including 18% GST on Rs. 2,500/-) (Rupees Two thousand nine hundred fifty only). The said complaint fee may be remitted by either using the payment gateway EasyPay or by a demand draft in favour of “The Institute of Chartered Accountants of India” payable at New Delhi.
E – Filing
There is also a provision to file complaint online through ‘ E-Form ‘I ‘.However, any complaint submitted online has mandatorily to be supplemented by taking a print out of the said E-form, signing the same and sending across in original along with the copy of the evidences in support of the allegations in triplicate to the “Director (Discipline), Disciplinary Directorate, The Institute of Chartered Accountants of India, 2nd and 3rd floor (Regulatory Block) ICAI Bhawan, 52, 53 & 54, Maharishi Valmiki Marg, Near Karkarduma Court Complex, Vishwas Nagar Extension, Shahdara, New Delhi-110032.” In absence of above compliance, the online complaint shall not be treated as being filed.
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