The Institute of Chartered Accountants of India’s Disciplinary Committee has reprimanded CA. Jagannath Holenarasipur Ramappa for professional misconduct. The case, initiated by CA. Suresh Babu V P, concerned Holenarasipur Ramappa conducting a tax audit for M/s Peekey Enterprises for the financial year 2019-20 without communicating with the previous auditor (the complainant) and accepting the assignment despite the complainant’s pending bills. This violated Item (1) of Part-II of the Second Schedule and Item (8) of Part-I of the First Schedule to the Chartered Accountants Act, 1949, as well as Council General Guidelines issued on August 8, 2008. Although Holenarasipur Ramappa did not appear at the May 2, 2024 hearing, he communicated his willingness to abide by the committee’s decision. The committee noted that while the misconduct was established, there was no malicious intent, and the pending fees were eventually cleared due to Holenarasipur Ramappa’s intervention. Considering these factors and Holenarasipur Ramappa’s apology for procedural errors, the Committee ordered a reprimand.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
DISCIPLINARY COMMITTEE (BENCH-III (2024-2025)]
[Constituted under Section 216 of the Chartered Accountants Act, 19491]
ORDER UNDER SECTION 216(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/278/2021/DD/261/2021/DC/1768/2023
In the matter of:
CA. Suresh Babu V P,
…. Complainant
Versus
CA. Jagannath Holenarasipur Ramappa
…Respondent
MEMBERS PRESENT:
CA. haranjot Singh Nanda, Presiding Officer (Present in Person)
Smt. Anita Kapur, Government Nominee (Present in Person)
Dr. K. Rajeswara Rao, Government Nominee (Present through Video Conferencing Mode)
CA. Piyush S. Chhajed, Member (Present in person)
Date of Hearing: 2″ May 2024
Date of Order: 31st July, 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 dated 3rd October 2023, the Disciplinary Committee was, inter-alia, of the opinion that CA. Jagannath Holenarasipur Ramappa (hereinafter referred to as the “Respondent”) was GUILTY of Professional Misconduct falling within the meaning of Item (1) of Part-II of Second Schedule and Item (8) of Part-I of First Schedule to the Chartered Accountants Act, 1949.
2. The Committee noted that the charge against the Respondent is that he had conducted tax audit of M/s Peekey Enterprises (hereinafter referred to as the “Firm”) for the financial year 2019-20 without communicating with the Complainant, the previous auditor of the said firm. It is further noted that the Respondent had accepted the audit assignment without clearance of pending bills of the Complainant which is in violation of Council General Guidelines issued on 8th August, 2008.
3. That pursuant to the said findings, an action under Section 2113(3) of the Chartered Accountants Act, 1949 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 211d May 2024.
4. The Committee noted that on the date of hearing held on 2ndMay 2024, the Respondent was not present before the Committee. However, he vide his email dated 23rd April 2024 submitted that he will abide by the decision of the Disciplinary Committee and requested to consider his previous submissions in the matter. Accordingly, the Committee in absence of the Respondent decided to proceed ahead on merits of the matter.
5. The Committee considered the reasoning as contained in the findings holding the Respondent Guilty of professional misconduct vis-à-vis earlier submissions of the Respondent in the matter made before it.
6. Keeping in view the facts and circumstances of the case, along with the material on record including representations on the findings, the Committee noted that the audit report of the Firm was signed by the Respondent on 13th January 2021. The Committee further noted that Respondent failed to bring any positive evidence to substantiate that he had communicated with the Complainant through registered post before accepting his appointment. The Committee further observed that the pending fees of the Complainant were not cleared till June 2021. However, the Respondent had issued the audit report in January 2021 which is in violation of the provisions of Chapter VII of the Council General Guidelines 2008. This conduct of the Respondent constitutes Professional Misconduct as per Item (1) of Part-II of Second Schedule and Item (8) of Part-I of First Schedule to the Chartered Accountants Act, 1949.
7. The professional misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 3rd October 2023 which is to be read in conjunction with the instant Order being passed in the case.
8. The Committee noted that there was no mollified intent on the part of the Respondent and it was a mere procedural lapse on the Respondent’s part. The Committee further noted that the dues of the Complainant were cleared on 23rd June 2021 due to the intervention of the Respondent. The Committee also noted that the Respondent in his submissions had apologized for the procedural mistakes and requested for IA lenient view in 0 this matter.
9. Accordingly, the Committee, upon considering the nature of charge and the facts of the matter ordered that CA. Jagannath Holenarsipur Ramappa be reprimanded.
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(CA. CHARANJOT SINGH NANDA)
PRESIDING OFFICER
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(SMT. ANITA KAPUR)
GOVERNMENT NOMINEE
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(DR. K. RAJESWARA RAO)
GOVERNMENT NOMINEE
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(CA. PIYUSH S CHHAJED)
MEMBER
DATE: 31st JULY, 2024
PLACE: NEW DELHI
