The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee has imposed a penalty of ₹15,000 on CA Jagdish Prasad Mittal, partner at M/s. Jagdish Mittal & Co., for professional misconduct. The action stems from a complaint filed by Shri Mithun Mahakud of Odisha regarding participation in a tender for audit services that contravened ICAI’s prescribed guidelines.
The case arose after the District Rural Development Agency (DRDA) floated an “Expression of Interest” inviting Chartered Accountants’ firms for maintenance and audit of accounts for the financial year 2017-18. CA Mittal’s firm participated in the tender process and was appointed as the statutory auditor for a quoted fee of ₹21,240. The ICAI examined documents and noted from an RTI reply that the government had not specified any scale of fees for the statutory audit in this case.
The Disciplinary Committee referred to Guideline No. 1-CA(7)/03/2016 issued by ICAI on April 7, 2016, which explicitly prohibits members from responding to tenders for services reserved exclusively for Chartered Accountants unless a minimum fee is prescribed in the tender document or the services are open to other professionals as well. The guidelines were intended to uphold professional standards and prevent undercutting of audit fees.
Despite these restrictions, CA Mittal’s firm participated in the tender, secured the assignment, and performed the audit without ensuring the presence of a minimum fee clause in the tender. The Committee concluded that this action directly violated the ICAI guidelines, thereby constituting professional misconduct under Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. This provision deems any contravention of ICAI-issued guidelines as misconduct.
During the disciplinary proceedings, held on April 2, 2024, CA Mittal joined via video conferencing. He reiterated his earlier written submissions but offered no further defense. The Committee considered his verbal statements along with documentary evidence and held him guilty.
In its order dated June 26, 2024, the Committee imposed a monetary penalty of ₹15,000 to be paid within 90 days of receiving the order. It further directed that failure to comply with the payment within the stipulated period would result in removal of CA Mittal’s name from the Register of Members for 30 days.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
!DISCIPLINARY COMMITTEE (BENCH-I (2024-2025)1
!Constituted under 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/7012019/DD/91/2019/DC/1440/2021]
In the matter of: –
Shri Mithun Mahakud,
….. Complainant
-Vs-
CA. Jagdish Prasad Mittal,
Partner, M/s. Jagdish Mittal & Co.
….. Respondent
MEMBERS PRESENT: –
CA. Charanjot Singh Nanda, Presiding Officer
Shri Jugal Kishore Mohapatra, IAS (Retd.) (Government Nominee)
CA. Chandrashekhar Vasant Chitale, Member
CA. Gyan Chandra Misra, Member
Date of Hearing 2nd April 2024
Date of Order 26.06.2024
1. That vide findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Condukategist*Aules, 2007, the Disciplinary Committee noted that) CA. Jagdish Prasad Mittal, (hereinafter referred to as the Respondent”) was held Guilty of Professional Misconduct within the meaning of Item (1), Part II of Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said findings, an action under Section 216(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 made his written submission and accordingly he has no further submission.
5. The Committee considered the reasoning as contained in the findings holding the Respondent Guilty of professional misconduct vis-à-vis verbal submissions of the Respondent.
6. Keeping in view the facts and circumstances of the case, material on record including verbal/ written submissions of the Respondent, the Committee is of the view that 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. Jagdish Prasad Mittal, 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.),
(GOVERNMENT NOMINEE)
Sd/-
(CA. CHANDRASHEKHAR VASANT
CHITALE)
(MEMBER)
Sd/-
(CA. GYAN CHANDRA MISRA)
(MEMBER)
