The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has reprimanded CA. Kumar Jee Kandroo and imposed a fine of Rs. 35,000. The Committee found Kandroo guilty of professional and other misconduct, specifically for failing to communicate with the previous auditor (Sushil Kumar Sharma) before accepting the appointment as statutory auditor. Kandroo admitted to this oversight during the hearing. The Committee also noted that Kandroo did not ensure compliance with Sections 139 and 140 of the Companies Act, 2013, before accepting the audit assignment. Furthermore, the Committee found that Kandroo provided backdated documents, including a resolution for his appointment and a no-objection letter, to mislead the Directorate. The order, dated May 16, 2024, mandates the payment of the fine within 60 days.
The Institute Of Chartered Accountants Of India
(Set Up By An Act Of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-IV (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949)
ORDER UNDER SECTION 2113(3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007.
[PR-429/2019-DD/48/2020/DC/1536/2022]
In the matter of:
Sushil Kumar Sharma
Vs.
Kumar Jee Kandroo
MEMBERS PRESENT:
1. CA. Ranjeet Kumar Agarwal, Presiding Officer (In person)
2. Shri Jiwesh Nandan, I.A.S (Retd.), Government Nominee (In person)
3 Ms. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
4 CA. Mangesh P Kinare, Member (In person)
5CA. S. CA. Abhay Chhajed, Member (In person)
DATE OF HEARING : 28th MARCH, 2024
DATE OF ORDER : 16th May, 2024
1. That vide Findings dated 04.01.2024 under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee was inter-alia of the opinion that CA. Kumar lee Kandroo (hereinafter referred to as the Respondent”) is GUILTY of Professional and Other Misconduct falling within the meaning of Items (8) and (9) of Part- I and Item (2) of Part-IV of the First Schedule and Item (3) of Part-II of the Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action under Section 218(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting an opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 28th March 2024.
3. The Committee noted that on the date of hearing on 28th March 2024, the Respondent was present through video conferencing and he stated that he has submitted his written representation dated 11th January 2024 on the Findings of the Disciplinary Committee, which, inter-alia, are given as under:
(a) The Respondent admitted during hearing(s), that it was his mistake not to communicate with the previous auditor before accepting his appointment as statutory auditor of the Company.
(b) The Respondent requested to frame charges against him on the mistake admitted by him and requested to drop all other charges against him.
(c) The Respondent requested the Committee to take a lenient view in the matter.
4. The Committee considered the reasoning as contained in Findings holding the Respondent ‘Guilty’ of Professional and Other Misconduct vis-a-vis written and verbal representation of the Respondent. The Committee held that due consideration to the submissions of the Respondent had been given by the Committee before arriving at its Findings and that no fresh grounds can be adduced at this stage.
5. Thus, keeping in view the facts and circumstances of the case and material on record including written and verbal representation of the Respondent on the Findings, the Committee noted that the Respondent has admitted that he had not communicated with previous auditor (Complainant) in a manner prescribed in Code of Ethics prior to acceptance of audit assignment. As the Respondent could not produce any documentary evidence of communication made by him with the Complainant and in view of admissions of said charge, the Committee held that the Respondent failed to ascertain the provisions of Code of Ethics. The Committee also noted that the Respondent before his acceptance as an auditor of the Company did not ensure that whether the provisions of Section 139 and Section 140 of the Companies Act, 2013 were complied with.
6. The Committee observed that the date of sending of consent letter to the Company by the Respondent and also the date of signing the audited financials of the Company by the Respondent are 5th September,2019 and 30th September,2019 i.e. before the date of 12th October,2019 when it is on record that the directors of the Company were in continuous dialogues with the Complainant regarding the finalization of accounts of the Company for the F.Y.2018-19. The assignment of the audit for the Financial Year 2018-19 was in process till 14th October 2019 by the Complainant. The Respondent has nowhere clarified as to how his appointment was made and audited financials were signed prior to 12th October, 2019. The Respondent rather has been completely silent on this allegation of giving his consent letter to the Company and signing the audit report and financials of the Company for the F.Y. 2018-19 in back date of 5th September,2019 and 30th September,2019 respectively.
7. The Committee also noted that the Respondent vide his letter 10th August 2020 has submitted some of the documents to the Disciplinary.Directorate viz.: (i) Extract of resolution passed in AGM of the Company dated 30th SePtetribet, 2019 for his appointment and (ii) Letter dated 17th August, 2019 seeking no nobjia,me3 r.4ection:gram-the Complainant, which he has claimed to have sent to previous auditdricalpactra cmpRittee was of the view that these concocted and false docuriag.ati’d;ibVitiaWindent are backdated. Hence, the Professional and Other MiscOnaUctonthe part ariihZakesiiandent is clearly established as spelt out in the Committee’s Findings dated 04th January 2024, which is to be read in consonance with the instant Order being passed in the case.
8. Accordingly, the Committee was of the view that the ends of justice would be met if punishment is given to him in commensurate with his Professional and Other Misconduct. Order-CA. Kumar Jee Kandroo (M No. 510313) Page 3 of 4
9. Thus, the Committee ordered that the. Respondent i.e. CA.. Kumar Jee Kandroo, be REPRIMANDED and also imposed a fine of Rs. 35,000/- (Rupees Thirty five thousand) upon him, which shall be paid within a period of 60 (sixty) days from the date of receipt of the Order.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(SHRI JIWESH NANDAN, I.A.S. {RETD.})
GOVERNMENT NOMINEE
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.{RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. MANGESH P KINARE)
MEMBER
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
