The Order issued by the Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) pertains to a case involving CA. Sachin Madhukar Pachkhede, who has been found guilty of professional misconduct. The case revolves around non-compliances in the General Purpose Financial Statements of M/s SICOM Investments and Finance Limited for the financial year 2012-13, audited by Pachkhede.
The Committee found Pachkhede guilty of professional misconduct falling within the meaning of Item (5), (6), (7), and (9) of Part-I of the Second Schedule to the Chartered Accountants Act 1949. Consequently, disciplinary action was initiated against him under Section 21B(3) of the Chartered Accountants (Amendment) Act, 2006.
During the hearing held on March 19, 2024, Pachkhede made verbal and written representations to the Committee. He admitted that mistakes had occurred but requested the Committee not to consider them as misconduct, asserting that his intention was not to hide any information. He argued that the errors were inadvertent and should be viewed as minor negligence.
Non-Compliances Identified: During the hearing and subsequent review, the Committee identified several instances of non-compliance in the audited financial statements:
- Non-compliances with AS-15, AS-16, AS-18, SA-700, Paragraph 4(i)(c), Paragraph 4(iii) (e) to (g), and Para 4(iv) of the Statement on Companies (Auditors Report) Order, 2003.
- Violations of Note 6(F), Note 6(G), Note 6(K)(i), Note 6(L), Note 6(P), and Note(6R) of ‘General Instructions for the preparation of the Balance Sheet’ given in Part-I of the Revised Schedule VI to the Companies Act, 1956.
- Breaches of Clause 5(vi)(c) of ‘General Instruction for the preparation of the Statement of Profit and Loss’ given in Part-II of the Revised Schedule VI to the Companies Act, 1956.
However, the Committee concluded that there were indeed non-compliances in the financial statements audited by Pachkhede, relating to various accounting standards and reporting requirements. These errors were considered to constitute professional misconduct as per the Committee’s Findings dated February 7, 2024.
In light of the findings, the Committee decided to remove Pachkhede’s name from the Register of Members for a period of three months and imposed a fine of Rs. 1,00,000/- (Rs. One Lakh only) upon him, payable within 60 days from the date of receipt of the Order.
*****
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PPR/253/2018-DD/186/INF/2018/DC/1500/2021
[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
In the matter of:
CA. Sachin Madhukar Pachkhede (M. No. 104660)
Partner, M/s B P S D and Associates
…………………… Respondent
Members Present:-
CA. Ranjeet Kumar Agarwal, Presiding Officer (in person)
Mrs. Rani S. Nair, IRS (Retd.), Government Nominee (through VC)
Shri Arun Kumar, IAS (Retd.), Government Nominee (in person)
CA. Sanjay Kumar Agarwal, Member (in person)
CA. Cotha S Srinivas, Member (in person)
Date of Hearing: 19th March, 2024
Date of Order: 9th 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 Sachin Madhukar Pachkhede (M. No. 104660) (hereinafter referred to as the ‘Respondent’) is GUILTY of Professional Misconduct falling within the meaning of Item (5), (6), (7) and (9) 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 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 the hearing held on 19th March 2024, the Respondent was present through video conferencing and made his verbal representation on the Findings of the Disciplinary Committee. He admitted that mistakes had happened. However, he requested the Committee not to consider them as misconduct as his intention was never to hide any information. The Committee also noted that the Respondent in his written representation, inter-alia, stated as under:
(a) an inadvertent error though typographical error should be viewed as minor negligence as there was no occurrence of financial implication on the sole user of the financial statements as the impugned Company was a wholly owned subsidiary of SICOM Ltd. which is a non-listed Company since inception.
(b) The mistakes/errors were only that of disclosure and presentation. True and fair view was not affected. Even if a particular thing was not disclosed at a particular place, it was stated somewhere else in another context. Due to these reasons, the Respondent was absolved from a few charges like Cash Flow statement.
(c) Thus, the Respondent requested for a sympathetic view for considering the case for full exoneration.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional Misconduct vis-à-vis written and verbal representation of the Respondent.
5. Keeping in view the facts and circumstances of the case, material on record including verbal and written representations on the Findings, the Committee held that there are non-compliances in General Purpose Financial Statements of M/s SICOM Investments and Finance Limited for financial year 2012-13 audited by the Respondent with regard to AS-15, AS-16, AS-18, SA-700, Paragraph 4(i)(c), Paragraph 4(iii) (e) to (g) and Para 4(iv) of Statement on Companies (Auditors Report) Order, 2003,), Note 6(F), Note 6(G), Note 6(K)(i),Note 6(L), Note 6(P), Note(6R) of ‘General Instructions for preparation of Balance Sheet’ given in Part-I of the Revised Schedule VI to the Companies Act, 1956, Clause 5(vi)(c) of ‘General Instruction for preparation of Statement of Profit and Loss’ given in Part-II of the Revised Schedule VI to the Companies Act, 1956. Hence, professional 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.
6. 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 misconduct.
7. Thus, the Committee ordered to remove the name of CA. Sachin Madhukar Pachkhede (M. No. 104660) from the Register of Members for a period of 3(three) months and also imposed a Fine of Rs. 1,00,000/- (Rs. One Lakh only) upon him payable within a period of 60 days from the date of receipt of the Order.
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
