The Institute of Chartered Accountants of India’s Disciplinary Committee (Bench-II) investigated CA. Maninder Singh Dinga based on a complaint by CA. Neha Agarwal. The committee found CA. Dinga guilty of professional misconduct under Item (8) of Part I of the First Schedule and Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. The charges involved accepting an audit without prior communication with the previous auditor (CA. Agarwal) and without ensuring her outstanding fees were paid, despite the fees being reflected in the financial statements. CA. Dinga admitted his errors and requested leniency, citing his early years in practice. After reviewing the evidence and representations, the Committee confirmed the misconduct. Consequently, a fine of Rs. 35,000 was imposed on CA. Maninder Singh Dinga, payable within 60 days of the order date.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PR/95/2021-DD/110/2021/DC/1754/2023
[DISCIPLINARY COMMITTEE [BENCH-II (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 21B (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
In the matter of:
CA. Neha Agarwal……COMPLAINANT
Versus
CA. Maninder Singh Dinga ……RESPONDENT
Members Present:-
CA. Ranjeet Kumar Agarwal, Presiding Officer (in person)
Mrs. Rani S. Nair, IRS (Retd.), Government Nominee (through VC)
Shri Arun Kumar, IAS (Retd.), Government Nominee (through VC)
CA. Sanjay Kumar Agarwal, Member (in person)
CA. Cotha S Srinivas, Member (in person)
Date of Hearing : 28th March, 2024
Date of Order : 17th May, 2024
1. That vide Findings 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 Maninder Singh Dinga, Jamshedpur (hereinafter referred to as the ‘Respondent’) is GUILTY of Professional Misconduct falling within the meaning of Item (8) of Part I of the First Schedule and Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action under Section 21B (3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting 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 the hearing held on 28th March 2024, the Respondent was present through video conferencing and made his verbal representation on the Findings of the Disciplinary Committee, inter-alia, accepting that error was there on his part and assured that the same will not be repeated in future. He informed that he was still conducting the audit of the Company. He requested for a lenient view in the case as the alleged misconduct took place in the initial years of his practice.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PR/95/2021-DD/110/2021/DC/1754/2023
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Prthessional Misconduct vis-a-vis verbalrepresentation of the Respondent.
5. Keeping in view the facts and circumstances of the case, material on record including verbal and written repitsentations ‘on the Findings, the Committee with respect to the first charge noted that though the Respondent brought on record a courier receipt yet he could not establish that his letter dated 7th October, 2020 seeking no:objection from the Complainant reached her hand. He also admitted his mistake that he failed to communicate with the previous auditor through the alloWed mode i.e. in writing sent through RPAD (Registered Post Acknowledgement Due) or by hand against written acknowledgement or through e-mail, making it evident that he failed to ensure compliance of the requirement of Item (8) of Part I of First Schedule to the Chartered Accountants Act, 1949.
5.1 The Committee with respect to the second charge noted that in the financial statements for the F.Y. 2018-19 for both the firms i.e. M/s Jamshedpur Trailor Service and M/s. Mata Rani Gas Agency signed by the Complainant, provision regarding pending audit of fee was appearing on the face of the Balance Sheet. Since the pending fee was reflected on the face of the Balance Sheet, hence it was not difficult for the Respondent to identify whether the fee is pending or not.The Respondent on this charge too accepted his guilt. Thus, the Committee held that the Respondent accepted the audit without ensuring that the undisputed outstanding fees of the previous auditor i.e. the Complainant had been fully paid.
6. Accordingly, the Committee was of the view that ends of justice will be met if punishment is given to him in commensurate with his professional misconduct.
7. Thus, the Committee ordered that a Fine of Rs. 35,000/- (Rupees Thirty-Five Thousand only) be imposed upon CA. Maninder Singh Dinga , Jamshedpurpayable within &period of 60 days from the date of receipt of the Order. .
sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
sd/-
(MRS. RANI S. NAIR, IRS RETD.)
GOVERNMENT NOMINEE
sd/-
(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
sd/-
(CA. SANJAY KUMAR AGARWAL)
MEMBER
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(CA. COTHA S SRINIVAS)
MEMBER MEMBER
JPR/95/2021-DD/110/2021/0C/1754/2023]
CONFIDENTIAL
DISCIPLINARY COMMITTEE (BENCH — II (2023-2024)1
[Constituted under Section 21B of the Chartered Accountants Act, 19491
Findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.
File No.: EPR/95/2021-DD/110/2021/DC/1754/20231 In the matter of:
CA. Neha Agarwal
…….COMPLAINAN
Versus
CA. Maninder Singh Dinga
……..RESPONDENT
MEMBERS PRESENT:
CA. Ranjeet Kumar Agarwal, Presiding Officer (In person)
Ms. Rani Nair,. I.R.S. (Retd.), Government Nominee (Through Video Conferencing Mode)
Shri Arun Kumar, I.A.S. (Retd.), Government Nominee (Through Video Conferencing Mode)
CA. Sanjay Kumar Agarwal, Member (Through Video Conferencing Mode)
CA. Sridhar Muppala, Member (Through Video Conferencing Mode)
DATE OF FINAL HEARING : 09.06.2023 (through physical/video conferencing mode)
PARTIES PRESENT
Complainant: CA. Neha Agarwal (Through Video Conferencing)
Respondent: CA. Maninder Singh Dinga (Through Video Conferencing)
[PR/9512021-DM 1012021/DC/1754/2023]
BACKGROUND OF THE CASE
1. The brief background of the case is that the Complainant was the tax auditor of M/s. Mata Rani Gas Agency and M/s. Jamshedpur Traitor Services for the financial year 2018-19. The Respondent conducted the tax audit of these entities for the financial year 2019-20 without doing prior communication with the previous auditor and without ensuring payment of the outstanding fee of the Complainant.
CHARGES IN. BRIEF: –
2. The Committee noted that the Complainant vide her complaint dated 27th March, 2021 levied the following charges against the Respondent:
a. The Respondent did not take any prior consent from the previous auditor before accepting the audit of M/s. Mata Rani Gas Agency and M/s. Jamshedpur Traitors for the financial year 2019-20.
b. The Respondent accepted the audit without first ensuring that outstanding audit fees of the previous auditor has been paid or not.
3. The Committee noted that the Respondent at the stage of PFO had inter-alia submitted as under
a. That he has sent a letter dated 7th October 2020 to obtain the Complainant’s consent, but the Complainant did not bother to reply before due date of F.Y 2019-20.
b. After the due date was over, the Complainant e-mailed him on 6th February 2021 for not taking her consent.
c. That the Complainant provided a wrong address which belonged to his senior partner.
4. The Director (Discipline) had, in his Prima Facie Opinion dated 23rd February 2023, with respect to first allegation noticed that the Respondent had communicated with the Complainant vide letter dated 7th October, 2020 through Courier for taking her NOC whereas he was required to send communication through Registered Post. Hence, the Respondent appears to have not made any prior communication with the previous auditor as required in terms of Item (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949.
4.1 With respect to second allegation, it is noted that as per Council General Guidelines, 2008 it is clear that the incoming auditor should not accept the audit in the case of non-payment of audit fees of previous auditor reflected in financial statement. But in the instant matter, despite audit fees being outstanding, the Respondent accepted and conducted the audit. Further, he failed to bring on record any evidence that outstanding audit fees of previous auditor was paid by the party. Hence, it appears that the Respondent has violated the requirement of Chapter VII of the Council General Guidelines, 2008.
5. Accordingly, the Director (Discipline) in terms of Rule 9 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, held the Respondent Prima-facie Guilty of Professional Misconduct falling within the meaning of Item (8) of Part I of First Schedule and Item (1) of Part II of Second Schedule to the Chartered Accountants Act, 1949. The said clause to the Schedule to the Act, states as under:
Item (8) of Part 1 of First Schedule:
“A chartered accountant in practice shall be deemed to be guilty of professional misconduct, if he-
“(8) accepts a position as auditor previously held by another chartered accountant or a certified auditor who has been issued certificate under the Restricted Certificate Rules, 1932 without first communicating with him in writing;”
Item (1) of Part 11 of Second Schedule
“A member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct, if he-
(1) contravenes any of the provisions of this Act or the regulations made thereunder,
or any guidelines issued by the Council;”
