Disciplinary Committee Bench-I (2024–2025) of the Institute of Chartered Accountants of India (ICAI), in its order dated August 20, 2024, has reprimanded Chartered Accountant Rajendra Chandra Sharma, based in Dibrugarh, and imposed a monetary penalty of ₹50,000 for professional misconduct. The committee also stated that failure to pay the fine within 90 days will lead to removal of his name from the Register of Members for 30 days.
The case arose from a complaint filed by Sh. Shanta Prasad Chakravarty. After investigation and hearings, the Committee found Sharma guilty under items (7) and (8) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, which pertain to gross negligence in professional duties and failure to obtain sufficient information during audit work.
The committee considered Sharma’s submissions—both written and oral—during the hearing held on May 14, 2024. It evaluated the allegations in detail, which included issues related to audit procedures, statutory compliance, disclosures, and representation at the company’s Annual General Meeting (AGM).
In some matters, Sharma was exonerated. For instance, the Committee did not find fault in his treatment of old account balances, stating the responsibility lay with the company’s management to provide adequate records. Similarly, regarding statutory dues, the Committee found that Sharma had made proper disclosures about interest on delayed payments, in line with information received from the concerned authorities.
Sharma was also cleared of misconduct in assessing the company’s “going concern” status. The Committee accepted his justification that management efforts toward improving performance influenced his professional judgment to report that the company could continue operations.
However, the Committee found Sharma guilty on two key issues:
-
Failure to Attend AGM: As per Section 146 of the Companies Act, 2013, an auditor is required to attend a company’s AGM or send an authorized representative. Sharma missed the meeting, citing a medical emergency involving his son, but failed to provide formal evidence or deputize another qualified representative. The Committee noted this as a violation of statutory duty and held him guilty on this count.
-
Non-disclosure of Material Trade Advance: The Committee found that Sharma failed to adequately report or inquire into a trade advance provided by Eastern Agro Processing & Tea Warehousing Co-operative Society Ltd to the audited company. The related financial impact, including a significant interest expense, was considered material to the balance sheet. Sharma’s defense that he wasn’t provided relevant documents was not accepted. The Committee viewed this as a lapse in due diligence and reporting, amounting to professional misconduct.
Based on the severity and nature of violations, the Committee decided on a reprimand and a fine. It further directed that non-payment within 90 days would result in a temporary suspension of membership for 30 days.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-I (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
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.
In the matter of:
Sh. Shanta Prasad Chakravarty
-Vs-
CA. Rajendra Chandra Sharma
[PR/49/2019/DD/78/2019/DC/1511/2021]
Members present:
i) CA. Charanjot Singh Nanda, Presiding Officer
ii) Shri Jugal Kishore Mohapatra, IAS (Retd.) (Government Nominee)
iii) CA. Gyan Chandra Misra, Member
Date of Hearing : 14.05.2024
Date of Order: 20.08.2024
1. That vide findings dated 28-11-2023 under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Committee noted that Rajendra Chandra Sharma, (hereinafter referred to as the Respondent”) was held GUILTY of professional misconduct falling within the meaning of item (7) & (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 21B(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication dated 03-05-2024 was addressed to him thereby granting opportunities of being heard in person / through video conferencing and to make written & verbal representation before the Committee on 14-05-2024.
3. The Committee noted that the Respondent was present through Video conferencing The Respondent made his verbal submissions on the findings of the Disciplinary Committee. The Committee considered the reasoning as contained in findings holding the Respondent Guilty of Professional misconduct vis-à-vis written and oral submissions of the Respondent.
4. The Committee thus viewed that the Professional misconduct on the part of the Respondent has been established within the meaning of item (7) & (8) of Part ll of Second Second Schedule to the Chartered Accountants Act, 1949.
5. Keeping in mew the facts and circumstances of the case, submission of the Respondent on record and based on the findings of the Committee, the Committee ordered that, the Respondent CA. Rajendra Chandra Sharma be reprimanded and also imposed a fine of Rs. 50,0001- (Rupees Fifty Thousand only) upon him to be paid within 90 days of receipt of this Order. The Committee also & ordered that if the Respondent fails to pay the fine within [the stipulated period as aforesaid, his name be removed from the Register of Members for a period Of 30 days.
Sd/-
CHARANJOT SINGH NANDA
(PRESIDING OFFICER)
Sd/-
(SHRI JUGAL KISHORE MOHAPATRA, I.A.S.
(REV.)) (GOVERNMENT NOMINEE)
Sd/-
(CA. GYAN CHANDRA MISRA)
(MEMBER)
DATE: 20.08.2024
PLACE: New Delhi
