Professional Misconduct of CA: ICAI removes CA from Register of Members for a period of 45 days

The disciplinary committee of Institute Of Chartered Accountant of India ( ICAI ) removed a Chartered Accountant ( CA ) from the registrar of members for a period of 45 days after finding him guilty of professional misconduct.

The committee found that the CA is guilty of Professional Misconduct falling within the meaning of Item (2) and Item (5) of Part I of the First Schedule to the Chartered Accountants Act, 1949.

Accordingly the committee took an action under Section 21B(3) of the Chartered Accountants Act, 1949. It was observed that the CA paid referral fees to an international entity , Russell Bedford International for carrying out their work.

Before the committee the CA submitted that there was no direct link between the work received and the amount paid to international entity i.e. Russell Bedford International, which can be termed as ‘referral fees. No work was referred to by the international entity.Further the international entity had not played any part either in identifying or in directing the foreign clients to the Respondent Firm(s).

Therefore the default in the matter was required to be treated as accidental and/or occurred due to bonafide belief, that while making such payments, there was no intent of violation of the provisions of the CA Act or its regulations.

After considering the submission of the respondent the committee holding the Respondent Guilty of professional misconduct and observed that joining the International entity and agreeing to its Rules and By-laws, which as extracted in the findings of the Committee, provided for referral work and payment of fee for such referral, constituted Professional Misconduct in terms of Item (2) of Part 1 of the First Schedule to the Chartered Accountants Act, 1949.

The Committee further observed that referral fees were actually paid in some years which amounted to sharing of fee with a person who was neither a Member of the ICAI, nor any other person to whom share in fee or profits of his professional business could be paid, allowed, or agreed to be paid.

Accordingly, the Committee upon considering the nature of charges and the gravity of the matter ordered that the “name of CA. Shreedhar Tryambak Kunte (M.No.030062) be removed from Register of Members for a period of 45 (forty-five) days, and a fine of Rs.1,00,000/- (Rupees One Lakh only) be imposed upon him, to be paid within 90 days of the receipt of the order and in case of failure in payment of fine as stipulated, the name of the Respondent be removed for a further period of 30 days from the Register of Members. The said punishment shall run concurrently in all the five cases referred to above.”

To Read the full text of the Order CLICK HERE

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