Enquiry relating to Professional Misconduct of Chartered Accountant
The First and Second Schedules of the Chartered Accountants Act, list the circumstances / situations in which an Accountant shall be guilty of professional misconduct. The schedules are not exhaustive, for there may arise other circumstances also in which a Chartered Accountant may be considered guilty of professional misconduct.
Procedure for Enquiry
The Council of the ICAI is empowered to inquire into the conduct of the members in the above circumstances. Section 21 of the Chartered Accountants Act prescribes the procedure for enquiry relating to the professional misconduct of the Chartered Accountants.
1. Receipt of complaint by the Council
1. The complaint should be in appropriate form and duly verified.
2. It should be accompanied by the specified fees.
3. The complaint shall include the details of acts and omissions as well as the documentary and oral evidences supporting the allegations.
4. If the complaint is not in required form, or if any further particulars are required, the complainant may be asked to comply with the particulars within a specified time period.
5. The Institute may also initiate inquiry on its own (suo moto) on receipt of any information relating to misconduct of a member of the Institute.
2. Processing of complaint
1. On receipt of complaint, the secretary of the ICAI may send a copy of the complaint to the alleged member or firm within 60 days of the receipt of the complaint.
2. within 14 days from the receipt of the copy of the complaint or within the extended time, the concerned member may file a duly verified written statement to defend himself.
3. within the specified time period, the secretary, ICAI may forward such a statement to the complainant, for him to file a rejoinder, which is duly verified.
4. After receiving the copy of the rejoinder from the complainant, which is forwarded by the secretary, ICAI, the respondent may file his comments on the rejoinder as a written statement which is duly verified, within the specified time period.
5. The secretary may require, further particulars or documents from the complainant or from the respondent, which may be furnished by them.
6. If the Council of the ICAI, after considering the written statements of both the parties and other documents filed by them, is of the opinion that a prima facie case exists, it may refer the matter to the Disciplinary Committee.
7. If the Council, after considering the statements, documents etc., is of the opinion that there is no prima facie case against the respondent, the same may be informed to both the parties.
1. The secretary may place before the Disciplinary Committee all relevant facts, relating to the case, brought to his notice.
2. The respondent may represent himself in person or through legal practitioner or though any other member.
3. The Disciplinary Committee may report the results of its inquiry to the Council of the ICAI.
4. A copy of the report of the Disciplinary Committee may be sent to the respondent and the respondent may make a written representation to the Council.
5. Sometimes, in the course of inquiry, there may be a change in the members of the Disciplinary Committee. Party to the inquiry may require denovo enquiry, giving the reasons and in writing, demanding denovo inquiry. The Council may order for denovo inquiry.
4. Consideration of the inquiry report by the Council
1. The Council of ICAI may consider the report received from the Disciplinary Committee and the written representation of the respondent.
2. If considered necessary, the Council may order for further inquiry to be made by the Disciplinary Committee.
3. If the Disciplinary Committee finds the respondent not guilty of professional or other misconduct, the proceedings may be filed or the complaint dismissed. If the Disciplinary Committee finds a respondent not guilty, the Council may not take a contrary view. On Considering the report of the Disciplinary Committee, if the Council finds the member guilty of professional misconduct mentioned in the First Schedule of the Chartered Accountants Act, it may give the respondent an opportunity of being heard.
4. Subsequently, the Council may pass an order either, reprimanding the member or removing the name of the member from the Register of the members for a period not exceeding 5 years, as it thinks fit.
If the Council is of the opinion to remove the name from the register of members for a period exceeding 5 years or permanently, it may forward the case to the High Court having the jurisdiction in the area where the respondent carries his business.
On considering the report of the Disciplinary Committee, if the Council finds the member guilty of professional misconduct or other misconduct not specified in the first schedule of the Chartered Accountants Act, the Council may refer the matter to the competent High Court with its recommendations.
5. The High Court shall hear the case forwarded by the Council and after considering the recommendations made by the Council, pass any of the following orders.:
- dismiss the case or file the proceedings.
- reprimand the member.
- remove the name of the member from the register of members, either permanently or for a specified period as it thinks fit, or
- may direct the council to make further inquiry in the matter.
5. Right to Appeal:
1. The Chartered Accountants Act, allows a member to prefer an appeal to the High court, against the order passed by the council of ICAI finding him guilty of professional misconduct specified in the First Schedule of the Chartered Accountant Act. He may prefer an appeal within 30 days or such extended time allowed by the High Court, from the date on which the order is communicated to him.
2. The High court is empowered to admit the appeal and revise the order passed by the council, if it deems fit. The High Court can do so only after calling for the written statements, documents and other records.
3. Before modifying or setting aside the order passed by the council, an opportunity of being heard may be given to the council.
4. If the High court imposes or enhances the penalty to the member, an opportunity of being heard is given to the member.
5. The High court has the power to revise the order passed by the council of ICAI; either on its own motion or otherwise.
6. Powers of the Council and the Disciplinary Committee:
For conducting any inquiry under the Chartered Accountants Act, the Council of ICAI and the Disciplinary Committee have the same powers as are vested with the City Civil Court under the Code of Civil Procedure, for the matters relating to:
1. issue of summons to a person.
2. enforcing attendance of a person for inquiry.
3. Examining a person on oath.
4. Receiving evidence on affidavit.
5. Discovering and production of documents.