Institute of Chartered Accountants of India (ICAI) Disciplinary Committee (Bench-IV) has recently concluded several cases of professional misconduct, issuing reprimands, fines, and even removal from the register of members for various chartered accountants. These orders, all dated May 17, 2024, underscore the ICAI’s commitment to upholding professional standards within the accounting profession.
CA. Mukesh Mittal Reprimanded for Audit Irregularities
CA. Mukesh Mittal has been reprimanded by the ICAI’s Disciplinary Committee. The findings, stemming from a hearing on March 28, 2024, and dated February 5, 2024, found him guilty of professional misconduct under Clauses (6) and (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
The misconduct primarily related to his audit of a Society for the financial year ended March 31, 2015. Despite CA. Mittal’s assertions that there was no malafide intent, no financial loss, and arguments regarding the Society’s “going concern” status and deemed registration of byelaw amendments, the Committee upheld its findings.
The Committee determined that CA. Mittal failed to report irregularities in loan repayments, including significant outstanding loans and interest, as required by Rules 80(6)(a)(v) and 80(7)(d) of the Delhi Co-operative Societies Rules, 2007. Furthermore, inconsistencies were noted in his audit report concerning the approval of amended byelaws by the Registrar of Cooperative Societies. The Committee also highlighted the auditor’s failure to raise concerns about an unusual transfer of a substantial outstanding loan amount from one individual to another. Consequently, CA. Mukesh Mittal was reprimanded under Section 21B(3)(a) of the Chartered Accountants Act, 1949.
CA. Ambika Nagar Reprimanded and Fined for Negligence
CA. Ambika Nagar faced disciplinary action, resulting in a reprimand and a fine of Rs. 25,000, payable within 60 days. The Disciplinary Committee found her guilty of professional and other misconduct, specifically under Items (5), (6), (7), and (8) of Part I of the Second Schedule and Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.
Despite a request from the complainant to withdraw the complaint, the Committee rejected it, citing its timing after the findings were already reached. CA. Nagar attempted to introduce new arguments during the hearing on March 19, 2024, including claims of forged signatures and coercion by another CA, and requested a case reopening. However, the Committee did not consider these new submissions, noting their contradiction with her earlier statements and late presentation, as there is no provision for reviewing findings at this stage.
The Committee upheld its finding of negligence on CA. Nagar’s part as a Statutory Auditor. This negligence included her failure to address issues raised by previous auditors, issuing a clean report without sufficient evidence, and not disclosing material facts about pending litigations. The Committee emphasized that her reliance merely on a Management Representation Letter, ignoring continuous negative net worth, low current ratio, inability to meet credit obligations, and adverse remarks of previous auditors, indicated a failure to perform adequate additional procedures to obtain sufficient appropriate audit evidence. Her failure to report the clear violation of AS-15, despite it being mentioned in the Notes to Accounts and previous auditors’ reports, also contributed to the finding of misconduct.
CA. Jagvinder Bir Singh Removed from Register for Two Years
In a more severe action, CA. Jagvinder Bir Singh has been removed from the register of members for a period of two years. This decision followed a complaint from the Serious Fraud Investigation Office (SFIO), leading to a finding of professional misconduct under Items (6), (7), and (8) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
The misconduct originated from issues in the Financial Year 2007-08 audit, specifically concerning the accounting treatment of expenditures for ERP software development. The Committee, during the hearing on March 19, 2024, determined a lack of clarity and due diligence on his part regarding the capitalization or deferral of these expenses.
Despite his representations, which the Committee found contradictory and unsupported by evidence, his admission that the expenses were arbitrarily recognized as ‘Capital Work in Progress’ without proper compliance with accounting standards, particularly Para 44 of AS 26, led to the ruling. The Committee also noted that he carried forward significant balances as ‘Deferred Revenue Expenditure’ and ‘Capital Work in Progress’ in subsequent financial years without qualifying his audit reports. The Committee concluded that his professional misconduct was clearly established.
CA. Monish Uppal Reprimanded and Fined for Conflict of Interest and Document Retention
CA. Monish Uppal has been reprimanded and fined Rs. 2,00,000, payable within 60 days. The Disciplinary Committee found him guilty of professional and other misconduct under Clause (1) of Part II of the Second Schedule and Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.
The Committee determined that Mr. Uppal provided bookkeeping services while simultaneously acting as the statutory auditor for the same companies, which constitutes a conflict of interest. Additionally, he was found to have retained company passwords and documents, causing inconvenience to the complainant. A demand for an additional Rs. 2,12,500, exceeding the agreed-upon contract, was also deemed unjustified. The Committee noted that Mr. Uppal failed to complete audit work or resign appropriately, even when irregularities were found, instead of reporting them through proper audit procedures. After considering Mr. Uppal’s representation, including his claim of a longstanding reputation and a personal vendetta, the committee concluded that misconduct was established.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-IV (2024-2025)]
[Constituted under Section 218 of the Chartered Accountants Act, 19491
ORDER UNDER SECTION 218(3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 1911) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007.
[PR-250/15/01)/223/1S/0C/990/2019]
In the matter of:
Shri Mohinder Pal Singh,
……Complainant
Versus
CA. Mukesh Mittal
………Respondent
MEMBERS PRESENT:
1. CA. Ranjeet Kumar Agarwal, Presiding Officer (In person)
2. Shri liwesh Nandan, LAS (Retd.), Government Nominee (In person)
3. Ms. Dakshlta Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
4. CA. Mangesh P Kinare, Member (In person)
5. CA. Abhay Chhajed, Member (In person)
DATE OF HEARING : 28th MARCH, 2024
DATE OF ORDER : 17th May, 2024
1. That vide Findings dated 05.02.2024 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. Mukesh Mittal (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Clause (6) and (7) of Part I of 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 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 admitted his mistake while stating that the same was without any malafide intent and no financial loss was caused. He verbally reiterated his submissions as contained in written representation dated 12th March 2024 on the Findings of the Disciplinary Committee, which, inter-alia, are given as under:-
(a) The list of defaulters was submitted by the Respondent with the written submissions dated 25.05.2022 i.e. after the stage of PFO (dated 10.09.2018). Since such charge was only raised by Director (Discipline) in PFO and finds no mention in the Complaint.
(b) The Society was 70 years old and working on the principle of “going concern” with a solvent financial environment. The Society has been making progress for the last 10 years i.e. from 31.03.2005 to 31.03.2015 as is evident from the document that forms part of the Respondent’s Audit Report itself and which is self-explanatory to showcase that there is no threat to the existence of the Society.
(c) The Respondent conducted the regular audit of the Society u/r 79 of the Delhi Cooperative Societies Rules, 2007 while Rule 80 relates to Special Audit only.
(d) The Society had duly filed the amended byelaws (enhancement of limit to Rs.8 lakhs loan amount) vide AGM dated 26.09.2010 and the same has been sent to approval of the RCS vide society letter dated 07.10.2010 (this letter is duly stamped by the RCS official with its seal which clarify that the RCS has received and acknowledged the amendment made by AGM)
(e) There was ‘deemed registration’ vide resolution dated 26.09.2010, to amend bye laws of the Society, which was much in consonance with the Respondent’s Audit Report for the year ended 31.03.2015.
(f) There are three Inspection Reports, prepared by 3 different Inspecting/Enquiry Officers regarding inspection of the Society under the DCS Act, 2003. The Observations made in the inspection Reports are to be read with the Complainant’s letter dated 05.10.2015 addressed to the Registrar of Cooperative Societies and other authorities. The Complainant’s letter is frivolous a ta d arbitrary as per the Observations in Inspection Reports.
(g) The Respondent prayed to the Committee for lenient view in the matter.
4. The Committee considered the reasoning as contained in Findings holding the Respondent ‘Guilty’ of Professional Misconduct vis-à-vis written and verbal representation of the 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, considering the material amount of outstanding loan and interest due thereon appearing in the balance sheet of the Society as on 31-03-2015 and also considering the fact that the arbitration proceedings were instituted against 591 defaulting borrowers, was of the view that there was irregularity in the repayment of loans including interest warranting the Respondent to report the same as per the requirements given in Rule 80(6)(a)(v) and Rule 80(7)(d) of Delhi Cooperative Societies Rules, 2007 and the Respondent was also required to qualify his Audit Report.
6. The Committee also noted that the Respondent submitted that the approval of Registrar of Cooperative Societies (RCS) was not required as the AGM was the supreme body to amend the Bye-law and only the submission to the RCS of amended Bye-laws approved by General Body in AGM, was sufficient compliance for bringing the amendment into force. The Committee was of the view that the Respondent’s submissions as regards approval of amended Bye Laws by RCS are contrary to his assertions in the Audit Report for the year ended on 31-03-2015, wherein it has been mentioned that the Bye Laws have been amended with the approval of RCS. Therefore, it is very clear that the Respondent has not reported correct facts in his audit report as regards approval of amended Bye Laws by RCS.
7. The Committee viewed that the transfer of substantial outstanding loan amount (including interest and arbitration cost) ()LAS: 20.49 .Lakh of Mr. Lashkar Singh to the loan account of his son, Mr. Gurdeep Singh Dhillon, is an unusual scenario and hence held that the Respondent being the auditor of the Society for the year 2014-15 should have raised concern in his Audit Report in respect of such significant and unusual default, which he failed to do so. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 05th February 2024, which is to be read in consonance with the instant Order being passed in the case.
8. Accordingly, the Committee, looking into the gravity of the charges vis-a-vis Submissions of the Respondent before it, was of the view that the ends of justice would be met if punishment is given to him in commensurate with his Professional Misconduct.
9. Thus, the Committee ordered that the Respondent i.e., CA. Mukesh Mittal, be REPRIMANDED, under 21B(3)(a) of the Chartered Accountants Act, 1949.
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. MANGER. P KINARE)
MEMBER
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
The Institute of Chartered Accountants of India’s Disciplinary Committee (Bench-IV) issued an order regarding CA. Ambika Nagar (M No. 521156) after finding her guilty of professional and other misconduct. Despite a withdrawal request from the complainant, which the Committee rejected due to its timing after the findings were reached, the proceedings continued. CA. Ambika Nagar attempted to introduce new arguments, including claims of forged signatures and coercion by another CA, and requested a case reopening. However, the Committee did not consider these new submissions, noting they contradicted her earlier statements and were presented late in the process, as there is no provision for reviewing findings at this stage. The Committee upheld its finding that CA. Ambika Nagar was negligent as a Statutory Auditor. This negligence included failing to address issues raised by previous auditors, issuing a clean report without sufficient evidence, and not disclosing material facts about pending litigations. Consequently, the Committee ordered that CA. Ambika Nagar be reprimanded and fined Rs. 25,000, to be paid 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 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.
[PR/103/20-DD/104/2020-DC/1618/2022]
In the matter of:
CA. Ashu Goel
…..Complainant
Versus
CA. Ambika Nagar
…..Respondent
MEMBERS PRESENT:
1. Shri Jiwesh Nandan, I.A.S (Retd.), (Presiding Officer and Government Nominee) (In person)
2. Ms. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
3. CA. Abhay Chhajed, Member (In person)
DATE OF HEARING : 19th MARCH, 2024
DATE OF ORDER : 17th May, 2024
1. That vide Findings dated 05.02.2024 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 Ambika Nagar (hereinafter referred to as the Respondent”) is GUILTY of Professional and Other Misconduct falling within the meaning of Items (5), (6), (7) and (8) of Part I of the Second Schedule and Item (2) of Part IV of the First 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 her thereby granting an opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 19th March 2024.
3. The Committee noted that on the date of hearing on 19thMarch 2024, the Respondent was present through video conferencing and verbally reiterated her written representation dated 15th March 2024 on the Findings of the Disciplinary Committee. The Committee also noted that the Respondent had submitted written representation dated 22″ February 2024 on the Findings of the Committee, which, inter-alia, are given as under:
i. The Complainant has informed the Respondent that he has withdrawn the Complaint against her, and the same has been communicated by the Complainant to Hon’ble ICAI, Disciplinary Committee, Bench IV vide letter dated 24.01.2024 for closure of the case. The Respondent brought on record a copy of withdrawal letter dated 24.01.2024 sent by the Complainant to the Disciplinary Directorate whereby he has requested the Hon’ble Committee that he wished to withdraw the said complaint and did not want to pursue it for further action and requested to close the same.
ii. The Respondent requested the Committee to consider the withdrawal letter of the Complainant and requested for the closure of instant complaint against her.
4. The Committee at the outset noted that “Rule 6″ of the Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 stipulates that ” The Director, on receipt of a letter of withdrawal of a complaint by the complainant, shall place the same before the Board of Discipline or the Committee, as the case may be, and the Board of Discipline or the Committee, as the case may be, may, if it is of the view that the circumstances so warrant, permit the withdrawal, at any stage, including before or after registration of the Complaint.” Accordingly, the Committee was of view that the grant of request of withdrawal of the complaint is the prerogative of the Committee.
5. The Committee was of the view that it is not inclined to consider the said withdrawal request of the Complainant having regard to the fact that the final decision in the matter on merits had already been taken by the Committee on 22nd January 2024 in the presence of the Complainant and his Authorised Representative wherein at that time, no such request was made by him before it. Accordingly, the Committee did not permit the withdrawal of the Complaint.
6. The Committee noted that the final hearing and decision in the instant matter under Rule 18, was taken on 22nd January 2024, wherein the Complainant and his authorized representative made their final arguments/ submissions and the Respondent was not present in that hearing. Further, it is also noted that the letter of withdrawal forwarded by the Respondent is dated 24th January 2024 which is after the disposal of matter by the Committee on 22nd January 2024. The Committee further noted that the withdrawal letter dated 24th January 2024 was received from the Complainant through courier on 26th February 2024 and upon perusal of the courier track sheet, it is noticed that the aforesaid letter was posted only on 23rd February 2024, although the letter is dated 24.01.2024.
7. The Committee noted that the Respondent had again submitted written representation dated 15th March 2024 on the Findings of the Committee, which, inter-alia, are given as under:
(a) That Respondent’s friend “CA. Vaibhav Bajaj” forged her signature on documents.
(b) That CA. Vaibhav Bajaj, through telephonic conversation and messages, persuaded her to admit the forged signature as genuine in order to avoid further complications and police actions and also threatened her not to report this matter to the police.
(c) That written statements made by her before the Committee were factually incorrect as it was the story dictated by CA. Vaibhav Bajaj.
(d) That CA. Vaibhav Bajaj also brought her a letter from CA. Ashu Goel (Complainant) for withdrawal of the Complaint and convinced her that now nothing will happen in the matter and the matter will be closed.
(e) That she will be lodging a FIR against CA. Vaibhav Bajaj for the offence committed by him and is in the process of obtaining a handwriting expert’s opinion to confirm that her signatures were forged by CA. Vaibhav Bajaj.
(f) The Respondent requested the Committee to reopen the case and allow her to bring on record the facts and circumstances to prove herself innocent.
8. On consideration of the matter, the Committee noted that it had already held the Respondent “Guilty” of Professional and Other Misconduct, vide Findings dated 05th February 2024. The Committee did not consider the Respondent’s submissions dated 15th March 2024, as these submissions were not brought by the Respondent at the time of hearing before it by way of written submissions, and these submissions were made by the Respondent for the first time at the stage of award of punishment under Rule 19. The Respondent had earlier submitted her written statement dated 19th January 2024 in defense to the allegations levelled together with the copy of Management Representation letter.
9. The Committee observed that the submissions of Respondent dated 15th March 2024 are contradictory to the submissions dated 19th January 2024 submitted by her before it. The Committee also noted that there Is no provision in the current mechanism to review the Findings arrived at by the Committee. Moreover, it was noted that the recent submissions of the Respondent at this stage appeared to be an afterthought.
10. The Committee considered the reasoning as contained in Findings holding the Respondent ‘Guilty’ of Professional and Other Misconduct vis-a-vis verbal and written representation of the Respondent. As regards the submissions of the Respondent, the Committee held that due consideration to the submissions and documents on record had been given by the Committee before arriving at its Findings and that no fresh grounds can be adduced at this stage.
11. Thus, keeping in view the facts and circumstances of the case, material on record including verbal and written representation of the Respondent, the Committee noted that despite disclaimer of opinion in the audit report for FY 2016-17 and FY 2017-18 and qualified opinion in FY 2015-16 by the previous auditor, the Respondent failed to address those issues in her audit report for the financial year 2018-19 and did not even bother to rule them out before issuing clean report. The Committee was of the view that the Respondent by mentioning in the audit report that CARO was not applicable has avoided reporting the issues raised by the Complainant which otherwise would have required expression of opinion by the Respondent.
12. The Committee held that the Respondent has been negligent in the performance of her duties as Statutory Auditor of the Company and failed to disclose a material fact of pending litigations against the Company which were not appearing in the financials of the Company for the year ended 31st March 2019. The Committee was of the view that the Respondent relied merely on the Management Representation Letter, ignored the continuous negative net worth of the Company for past 3 years, low current ratio, inability to meet credit obligations, adverse remarks of the previous auditor in the audit report of FY 2017-18 and failed to do additional procedures to obtain sufficient appropriate evidence in support of her opinion.
13. The Committee held that the Respondent was negligent in discharge of her duties as she failed to report the clear violation of AS-15 despite being mentioned in the Notes to accounts and report of previous auditors. Hence, the Professional and Other Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 05th February 2024, which is to be read in consonance with the instant Order being passed in the ‘case.
14. Accordingly, the Committee was of the view that the ends of justice would be met if punishment is given to her in commensurate with her Professional and Other Misconduct.
15. Thus, the Committee ordered that the Respondent i.e., CA. Ambika be REPRIMANDED and also imposed a fine of Rs. 25,000/-(Rupees Twenty five thousand) upon her, which shall be paid within a period of 60 (sixty) days from the date of receipt of the Order.
Sd/-
(SHRI JIWESH NANDAN, I.A.S. {RETD.})
(PRESIDING OFFICER AND GOVERNMENT NOMINEE)
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.{RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
The Institute of Chartered Accountants of India’s Disciplinary Committee (Bench-IV) has ordered the removal of CA. Jagvinder Bir Singh from the register of members for two years. This decision, following a complaint from the SFIO, found him guilty of professional misconduct under Items (6), (7), and (8) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. The misconduct stemmed from issues in the Financial Year 2007-08 audit, specifically regarding the accounting treatment of expenditures for ERP software development. The Committee determined a lack of clarity and due diligence on his part concerning the capitalization or deferral of these expenses. Despite his representations, which the Committee found contradictory and unsupported by evidence, his admission that the expenses were arbitrarily recognized as ‘Capital Work in Progress’ without proper compliance with accounting standards led to the ruling.
The Institute Of Chartered Accountants Of India
(Set up by an Act of Parliament)
DISCIPLINARY COMMITTEE [BENCH-IV (2024-2025)]
[Constituted under Section 213 of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 213(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/296/2015-DD/144/2016-DC/163/2018].
In the matter of:
Shri. K. S. Kaushik
… Complainant
Versus
CA. Jagvinder Bir Singh
M/s ATJ & Associates
….Respondent
MEMBERS PRESENT:
1. Shri Jiwesh Nandan, I.A.S (Retd.), (Presiding Officer and Government Nominee) (In person)
2. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
3. Abhay Chhajed, Member (In person)
DATE OF HEARING : 19th MARCH, 2024
DATE OF ORDER : 17th May, 2024
1. That vide Findings dated 05.02.2024 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 Jagvinder Bir Singh (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Item (6), (7) and (8) of Part I 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 19th March 2024,
3. The Committee noted that on the date of hearing on 19th March 2024, the Respondent was present through video conferencing. The Respondent stated that he has already submitted his written representation before the Committee vide email dated 19th February 2024 and has nothing more to add in this case. The Committee also noted the written representation of the Respondent dated 19th February 2024 on the Findings of the Committee, which, inter-alia, are ghien as under:
(a) Negative observations have been made against him to reach at the verdict of guilt.
(b) The figure of CWIP of Rs. 7,01,90,486/- was actually settled value of the Planned & Partly Executed Capital Works at various branches of the Company in question, against which part payment had also been made & the balance due was reflected as outstanding in the books for the year.
(c) The repeated assertion of the Respondent that the typographical error in the Notes to the Audited Balance Sheet for FY 2007-08 was corrected at the time of signing of the Balance ‘Sheet by the Directors, has been discarded for “want of evidence”.
(d) In the Audit Report for all subsequent years after the F.Y. 2007-08, the Audit Opinion is not a clean opinion but has been made subject to all Notes to Account, which also contained Notes ‘relating to outstanding expenditures under the head ‘Deferred Revenue Expenditure’/’Capital Work in Progress’, etc.
(e) All entries contained in the Balance Sheet for FY 2007-08 are duly supported by the Trial Balance from the books of accounts. SFIO has also fully disregarded the Audit Report of the Independent/Special Auditor.
(f) The present complaint needs to be dismissed.
4. The Committee considered the reasoning as contained in Findings holding the Respondent ‘Guilty’ of Professional Misconduct vis-à-vis verbal and written representation of the Respondent. The Committee noted that the issues/ submissions made by the Respondent as aforesaid have been dealt with by it at the time of hearing under Rule 18.
5. Thus, keeping in view the facts and circumstances of the case, material oh record including verbal and written representation of the Respondent on the Findings, the Committee noted that the Respondent’s explanations and assertions were without any supporting evidence and were found to be contradictory in nature. The Committee held that there was a lack of clarity on the part of Respondent in regard to proper accounting treatment of expenditures related to the development of ERP software for the Financial Year 2007-08. The uncertainty surrounding whether these expenditures should be capitalized or treated as ‘Deferred Revenue Expenses’ suggests a fundamental lack of understanding or due diligence on the part of the Respondent.
6. The Committee noted that the Respondent had carried forward significant balances as ‘Deferred Revenue Expenditure’ and ‘Capital Work in Progress’ in subsequent financial years, without qualifying his audit reports. The Committee noted the statement of the Respondent recorded before the Complainant Department that it was not known at the time of preparation of the balance sheet for FY 2007-08 as to whether the expenses incurred were to be capitalized or were to be treated as Deferred Revenue Expenditure and finally, the same was kept as ‘CWIP’ in the balance sheet. Accordingly, the Committee held that this admission of the Respondent itself shows that at the time of audit, compliance of the conditions of Para 44 of AS 26 was not checked by the Respondent and the amount of Rs. 7,01,90,486/- was recognized in an arbitrary manner. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 05thFebruary 2024, which is to be read in consonance with the instant Order being passed in the case.
7. 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 Misconduct.
8. Thus, the Committee ordered that the name of the Respondent i.e., CA. Jagvinder Bir Singh be removed from the register of members for a period of 02 (Two) years.
Sd/-
(SHRI JIWESH NANDAN, I.A.S. {RETD.})
(PRESIDING OFFICER AND GOVERNMENT NOM
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.{RETD.}
GOVERNMENT NOMINEE MEMBER
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
The Institute of Chartered Accountants of India’s Disciplinary Committee (Bench-IV) issued an order against CA. Monish Uppal following findings of professional and other misconduct. The committee determined that Mr. Uppal provided bookkeeping services while also acting as the statutory auditor for the same companies, which is a conflict of interest. Additionally, he was found to have retained company passwords and documents, causing inconvenience. A demand for an additional Rs. 2,12,500/-, exceeding the agreed-upon contract, was also deemed unjustified. The committee noted that Mr. Uppal failed to complete audit work or resign appropriately, even when irregularities were found, instead of reporting them through proper audit procedures. After considering Mr. Uppal’s representation, including his claim of a longstanding reputation and personal vendetta, the committee concluded that misconduct was established. Consequently, CA. Monish Uppal has been reprimanded and fined Rs. 2,00,000/-, payable within 60 days of the order dated May 17, 2024.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-IV (2024-2025)]
[Constituted under Section 218 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.
[PR/218/2015 –DD/233/2015-DC/807/2018]
In the matter of:
Mr. Anil Kumar Sahay
… Complainant
Versus
CA. Monish Uppal
… Respondent
MEMBERS PRESENT:
1. Shri Jiwesh Nandan, I.A.S (Retd.), (Presiding Officer and Government Nominee) (In person)
2. Ms. Dakshita DaS,I.R.A.S. (Retd.), Government Nominee (Through VC)
3. CA. Abhay Chhajed, Member (In person)
DATE OF HEARING : 19th MARCH, 2024
DATE OF ORDER : 17th MAY, 2024
1. That vide Findings dated 05.02.2024 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. Monish Uppal (hereinafter referred to as the Respondent”) is GUILTY of Professional and Other Misconduct falling within the meaning of Clause (1) of Part II of Second Schedule and Clause (2) of Part IV of the First 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 an opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 19th March 2024.
3. The Committee noted that on the date of hearing on 19th March 2024, the Respondent was physically present at ICAI Bhawan, New Delhi. The Respondent verbally reiterated his written representation dated 18th March 2024 on the Findings of the Committee, which, inter alia, are given as under:-
a) That as a Chartered Accountant with a longstanding reputation for integrity and professionalism, he has been deeply dismayed by the events that led to this disciplinary action, due to personnel vendetta. Throughout 30 years of career of the Respondent, he has upheld the highest ethical standards and has always prioritized the trust and confidence of his clients and colleagues.
b) That in many years of service, no complaint for any such professional misconduct has ever been filed against him.
c) He requested the Committee to take a lenient view in the matter, especially when the alleged complaint is private in nature.
4. The Committee considered the reasoning as contained in Findings holding the. Respondent ‘Guilty’ of Professional and Other Misconduct vis-a-vis verbal and written representation of the Respondent.
5. Thus, keeping in view the facts and circumstances of the case, material on record including verbal and written representation of the Respondent, the Committee held that the Respondent has provided bookkeeping services to the subject Companies during the period when he was also acting as the Statutory Auditor of these Companies. The Committee also held that the Respondent was retaining the password and documents of the companies causing unwanted inconvenience to both the Complainant and the Companies, as email from the Respondent explicitly denying possession of same was not brought on record.
6. The Committee held that the demand of Rs. 2,12,500/- was over and above the contract of services entered into by the Respondent with the subject Companies and such an act of the Respondent demanding an additional amount was not justified causing undue hardships to the Companies. As regards the issue that Respondent was not performing the professional services and audit work without any information and also not resigning from the post of auditor of the Companies, the Committee held that even if the Respondent found certain irregularities, the was duty bound to complete the audit and report those irregularities in his audit report by adequate qualifications as per the provisions of relevant Standards on Auditing. The Committee was of the view that in case, the qualification of the opinion was inadequate to communicate the gravity of the situation, the Respondent had the option to either resign or to disclaim his audit opinion as per Para 13 of Standard on Auditing (SA) 705 — ‘Modifications to the Opinion in the Independent Auditor’s Report.
7. Hence, the Professional and Other Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 05th February 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.
9. Thus, the Committee ordered that the Respondent i.e., CA. Monish Uppal , be REPRIMANDED and also imposed a fine of Rs. 2,00,000/-(Rupees Two Lakhs) upon him, which shall be paid within a period of 60 (sixty) days from the date of receipt of the Order.
Sd/-
(SHRI JIWESH NANDAN, I.A.S. {RETD.})
(PRESIDING OFFICER AND GOVERNMENT NOMINEE)
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.(RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
The Institute of Chartered Accountants of India’s Disciplinary Committee (Bench-II) issued an order against CA. Haresh Ramji Joshi, finding him guilty of professional and other misconduct. The Committee had previously determined his guilt under specific clauses of the Chartered Accountants Act, 1949. During the hearing, CA. Joshi admitted to mistakes, attributing them to staff reliance, but accepted responsibility, requesting a lenient punishment. He argued that the order under Rule 18(17) and Section 21B(3) should have been passed within three months as directed by the Appellate Authority. However, the Committee clarified that delays were due to administrative reasons, including the dissolution and reconstitution of the Committee, and that efforts were made to comply with timelines. CA. Joshi’s plea to consider the case outside the seven-year limitation period under Rule 12 was also rejected, as the complaint was filed within two years of the misconduct. The Committee confirmed that CA. Joshi certified an incorrect allotment of 170 shares and was negligent in auditing, including the filing of unsigned balance sheets and annual returns for multiple years on the same date, violating the Companies Act. Given his failure to provide new evidence to mitigate his guilt, the Committee ordered the removal of CA. Haresh Ramji Joshi’s name from the Register of Members for one year.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PR-175/2014-DD/201/2014/DC/634/2017
[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
[PR-17512014-DDI201/2014/DC/634/2017]
In the matter of:
Shri Suraj T Nanda
…. Complainant
Versus
CA. Haresh Ramji Joshi
….Respondent
Members Present:-
CA. Rahjeet Ktimar Agarwal, Presidin Officer (in person)
Mrs. Rani,S. Nair, IRS:(Retd.), Government–Nothinee (through VC)
Shri Arun Kumar, IAS (Retd.), Government Nominee (in person)
CA. Sanjay Kumar Agaiwal, Member(in person)
CA. Ctitha S. Srinivas, Member (in person)
Date of Hearing : 19th 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 Haresh Ramji Joshi (hereinafter referred to as the Respondent”) is GUILTY of Professional and Other Misconduct falling within the meaning of Item (2) of Part IV of the First Schedule-and Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action tinder Section 218. (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 19th March 2024.
3. The Committee noted that on the date of the hearing held on 191h March 2024, the Respondent was present through video conferencing and made his verbal representation on the Findings of the Disciplinary Committee, inter-alia, stating that he did not want to make excuses for the mistake made by him. He requested the Committee to award him the least possible punishment as his intention was not to defraud anyone. He further added that the error was technical in nature, and he relied upon his staff, but he owes the responsibility of the mistake committed by him. The Committee also noted that the Respondent in his written representation on the Findings of the Committee, inter-alia, stated as under:
a. As per para 9.3 of the Findings of the Disciplinary Committee dated 7thFebruary 2024:
“The Appellate Authority also directed that the matter may be decided on the basis of pleadings and the statement of stakeholders already filed/record unless the Disciplinary Committee directs the parties to file additional pleadings. Further, the matter be heard by the Disciplinary Committee and the Order under Rule 18(17) of the Rules and section 21B (3) of the Act be. passed within a period of 3 months from the date of receipt of this Order. It is also made clear that no adjournment shall be granted.to the parties in the matter except in exceptional circumstances”.
The Order under Rule18 (17) of the Rules and section 218 (3) of the Act, had to be passed within 3 months.
b. For the first charge, the Respondent could not bring out any corroborative evidence to show that ROC record were showing 170 shares less and for the second charge, the Respondent accepted his mistakes.
c. The date of the Balance Sheet should have been 18th September.
d. No prejudice is caused to anyone due to these mistakes.
e. The Respondent requested the Committee to take a lenient view while awarding punishment.
4. Keeping in view the facts and circumstances of the case, material on record and submissions of the Respondent before it, the Committee decided to reserve the decision on the quantum of punishment to be awarded to the Respondent in the instant case.
5. Thereafter, at its meeting held on 28th March 2024, the Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional and Other Misconduct vis-a-vis written and verbal representation of the Respondent
6. As regard the submission of the Respondent that the Committee has not passed Order under Section 2113 (3) as per the direction of Appellate Authority within 3 months, the Committee noted that the Appellate Authority vide its Order dated 26th October 2023 remanded back the instant case to the Disciplinary Committee which was received on 8th November 2023.
6.1 In compliance with the said Order, the case was listed for hearing before the Disciplinary Committee on 2 occasions i.e. on 17th November 2023 when the case was part-heard and adjourned and thereafter on 28th November 2023 when the hearing in the case was concluded and decision on the conduct of the Respondent was kept reserved. Eventually, on 14th December 2023, the Committee decided On the conduct of the Respondent. Thereafter, the Committee arrived at a fresh Finding holding the Respondent “Guilty” of Professional and Other Misconduct falling within the meaning of Item (2) of Pad IV of the First Schedule and Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949 which was signed on 7th February 2024 and communicated to the Respondent on 12’h February 2024.
6.2 In the meantime, the time limit of three months as’ granted by the ‘Hon’ble Appellate Authority to complete the disciplinary, proceedings in the instant case expired.. Also, the tenure of the then existing Disciplinary Committee came to an end and the same was dissolved. Further, as soon as the Disciplinary Committee was reconstituted, an application dated 18’h March 2024 was filed before the Hon’ble Appellate Authority to grant an extension of time period of 3 months to comply with its Order. Thus, it is evident that all efforts were made by the Disciplinary Committee to comply with the directions given by the Hon’ble Appellate Authority to complete the proceedings within the prescribed time period . keeping in view the principle of natural justice. Further, the Committee is of the view that the time limit of 3 months provided by the Appellate Authority to complete the proceedings in the instant case is a part of procedural laws which are made to expedite the proceedings and due to circumstances beyond its control if the proceedings could not be completed within the prescribed time, as. on date, there is nothing that estops the Committee to complete the proceedings.
7. Committee also noted that the Respondent his submissions on the Prima ‘Facie ‘Opinion at the hearing stage with respect to the first ‘charge stated that the matter being more then 18 years old is a case covered by Rule.12.of the Rules of Procedure. In this regard, the CarnmitteetoOkinto.VieW4e4ollOwing provisions of Rule 12-of The Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct-of .Cases) Rules, 2007: –
“12. Time limit on entertaining complaint or information. Where the Director is satisfied that there would be difficulty in securing proper evidence of the alleged misconduct, or that the member or firm against whom the information has been received or the complaint has been filed, would find it difficult to lead evidence to defend himself or itself, as the case may be, on account of the time lag, or that changes have taken place rendering the inquiry procedurally inconvenient or difficult, he may refuse to entertain a complaint or information in respect of any misconduct made more than seven years after the same was alleged to have been committed and submit the settle to the Board of Discipline for taking decision on it under sub-section (4) of section 21 A of the Act.”
7.1 The Committee noted, that the said plea was not taken by the Respondent at the Prima Fade Opinion stage. The Committee further noted that the Respondent certified Form No.2 for allotment 9990 equity shares in the Company on 31st August 2012. The Complainant filed the complaint in Form ‘I’ on 4th July 2014. Thus, the complaint was filed approximately within 2 years of the alleged period of misconduct whereas the limitation period of.7 years has been prescribed under Rule 12 of The Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007. Thus, the Committee was of the view that the case of the Respondent does not fall under the purview of Rule 12. Hence, the said plea of the Respondent is not tenable.
8. Keeping in view the facts and circumstances of the case, material on record including verbal and written representation on the Findings, the Committee with regard totts2st chop noted that the Respondent had certified the Form 2 according to which that 3oKidiCha’creMetd990 fresh equity Shares, ignoring the fact that authorized share capital Of the Company is 10000 equity shares and the Company had already allotted 180 equity shares in the past. Hence, only 9820 shares can be allotted. Thus, it shows that 170 shares which were already issued earlier were re-allotted by the Company and certified by the Respondent.
8.1 The Committee with regard .to second charge noted that no filing with the ROC was made by the Company in between 2001 and 2005. Further; these Balance Sheets and Annual returns were not duly signed by the Directors and its Auditor, rather were filed with ‘sd/-‘ copy impersonating their signatures. The Form for acceptance of audit assignment by the Respondent was filed with ROC for 5 years on the same date which is in violation of the Companies Act, 1956 and thus, he failed to exercise requisite due diligence while auditing and was grossly negligent in reporting material fact and misstatement.
8.2 Hence, professional and other misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 7th February 2024 which is to be read in consonance with the instant Order being passed in the case.
9. 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 and other misconduct.
10. The Committee also noted that on the case being remanded back by the Appellate Authority on technicaLgrounds;.an opportunity-was afforded-to both-the parties to the case i.e. tie Complainant and the Respondent to substantiate their case. However, the Respondent failed to bring on retort any fresh or further evidence to .mitigate the efficacy of guilt on his part. Thus, the Committee did not find any reason to modify the quantum of punishment awarded to the Respondent by ‘the (erstwhile) Committee.
11. Thus, the Committee ordered that the name of CA. Haresh Ramji Joshi , Mumbai be removed from the Register of Members for a period of 01 (One) Year.
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
sd/-
(CA. COTHA S SRINIVAS)
MEMBER
