Institute of Chartered Accountants of India (ICAI), through its Disciplinary Committee (Bench-I) in an order dated June 26, 2024, found CA Devashish Garodia guilty of professional misconduct under Item (8) of Part I of the First Schedule and Item (1) of Part II of the Second Schedule of the Chartered Accountants Act, 1949. The case was initiated based on a complaint by CA Tapan Kumar Mukhopadhyay and was heard on April 2, 2024. The charges against the respondent related to his acceptance of an audit assignment without proper communication with the previous auditor and his participation in a government tender that did not prescribe a minimum fee, thereby violating ICAI’s ethical guidelines.
With respect to the first allegation, the Committee observed that Item (8) of the First Schedule clearly mandates written communication with the previous auditor before accepting a new audit assignment. This requirement is not only based on professional courtesy but also serves to protect public interest and maintain auditor independence. As per ICAI’s Code of Ethics, such communication must be verifiable—preferably through registered post, written acknowledgment, or official email. In the present case, Garodia admitted that the communication was made via courier during the COVID-19 period but failed to comply with the prescribed methods. The Committee concluded that this constituted a breach of ethical conduct.
On the second count, the respondent was charged with responding to a tender exclusively meant for Chartered Accountant firms for conducting audit work of government funds. As per ICAI Guideline No. 1-CA(7)/03/2016 dated April 7, 2016, members are prohibited from responding to tenders for CA-exclusive services like audits unless a minimum fee is specified in the tender or it is open to non-CAs as well. Garodia claimed that the tender was open to other professionals too. However, upon examining the tender notice, the Committee found it explicitly invited sealed quotations only from “registered Chartered Accountant Firms,” with no mention of other professionals or a minimum fee. Thus, the Committee rejected the respondent’s explanation and held that participating in such a tender and accepting the assignment violated the ICAI’s established guidelines.
In its final ruling, the Committee imposed a fine of ₹15,000 on CA Devashish Garodia, to be paid within 90 days from receipt of the order. If he fails to pay the fine within the stipulated period, his name will be removed from the ICAI Register of Members for a period of 30 days. The decision was made by a three-member bench comprising CA Charanjot Singh Nanda (Presiding Officer), Shri Jugal Kishore Mohapatra, IAS (Retd.) (Government Nominee), and CA Chandrashekhar Vasant Chitale.
The case reaffirms ICAI’s enforcement of ethical obligations imposed under the Chartered Accountants Act and its Code of Ethics, particularly in matters involving communication with retiring auditors and compliance with tender participation norms. The Committee’s findings are consistent with the legal understanding of misconduct, as previously upheld in judicial precedents such as Council of the Institute of Chartered Accountants of India v. B. Mukherjea (AIR 1958 SC 506), where the Supreme Court observed that disciplinary control is essential to maintain professional integrity.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
(DISCIPLINARY COMMITTEE (BENCH-I (2024-2025)]
[Constituted funder Section 21B of the Chartered Accountants Act, 19491
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/01 /2021/DD/48/2021 /DC/1661 /2022]
In the matter of: –
CA. Tapan Kumar Mukhopadhyay,
….. Complainant
Vs-
CA. Devashish Garodia,
M/s. D Garodia & Co.,
Chartered Accountants,
….. Respondent
MEMBERS PRESENT: –
CA. Charanjot Singh Nanda, Presiding Officer
Shri Jugal Kishore Mohapatra, IAS (Retd.) (Government Nominee)
CA handrashekhar Vasant Chitale, Member
Date of Hearing : 2nd April 2024
Date of Order : 26.06.2024
1. That vide findings under Rule 18(17) of Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and conduct of Cases) 2007, the Disciplinary Committee noted that CA. Devashish Garodia hereinafter referred to as the Respondent”) was held GUILTY of professional misconduct falling within the meaning of Item (8) of Part I of First Schedule and Item (1) Part II 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 communication was addressed to him thereby granting opportunity of being heard in person / through video conferencing and to make written & verbal representation before the Committee on 2ndApril 2024.
3. The Committee noted that on the date of the hearing held on 2ndApril 2024, the Respondent was present through video conferencing, and he made his verbal submission on the findings of the Disciplinary Committee.
4. In his verbal submission the Respondent inter alia stated that he has already given his written submission on the findings of the Committee.
5. The Committee considered the reasoning as contained in the findings holding the Respondent Guilty of professional misconduct vis-à-vis verbal/ written submissions of the Respondent.
6. Keeping in view the facts and circumstances of the case, material on record including submissions of the Respondent on the findings of the Committee, the Committee is of the view that the professional misconduct on the part of the Respondent is established. Accordingly, the Committee ordered that a fine of Rs. 15,000/- (Rupees Fifteen Thousand only) be imposed upon the Respondent i.e. CA. Devashish Garodia to be paid within 90 days of receipt of the Order. If the Respondent fails to pay the fine within the stipulated period, his name be removed from the Register of Member for a period of thirty days.
Sd/-
(CA. CHARANJOT SINGH NANDA)
(PRESIDING OFFICER)
Sd/-
(SHRI JUGAL KISHORE MOHAPATARA),
I.A.S. (RETD.), (GOVERNMET NOMINEE)
Sd/-
CA. CHANDRASHEKHAR VASANT CHITALE
(MEMBER)
Place : 26.06.2024
Date : New Delhi
