ICAI Cannot Punish on Allegations Never Made in Complaint

By CA Vijayakumar Shetty CA, CS, CMA Judiciary January 3, 2026 1 comment

TaxGuru Citation: 2026 taxguru.in 215
Case Name: Naginchand Khincha Vs Board of Discipline (Karnataka High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Karnataka High Court

Already Upgraded? Log in.

Naginchand Khincha Vs Board of Discipline (Karnataka High Court)

No Moving Goalposts in Disciplinary Law: ICAI Order Set Aside by Karnataka HC

Karnataka HC Quashes ICAI Disciplinary Action: Mismatch Between CBI Complaint & Charges Framed Proves Fatal- Charge the Right Offence or Drop the Case: When Complaint Says “Fees” but Enquiry Says “Bribe” — Disciplinary Action Fails

Karnataka High Court at Bengaluru, in Shri Naginchand Khincha Vs. Board of Discipline, ICAI (WP No.19236/2018, order dated 18.12.2025), quashed the disciplinary order passed by the Board of Discipline, ICAI, holding the Assessee guilty of “other misconduct” under Clause (2), Part IV of First Schedule to Chartered Accountants Act, 1949.

The Assessee, a practising Chartered Accountant since 1974, was facing parallel proceedings – a criminal case by CBI relating to alleged bribery involving an Income-tax Officer & a disciplinary proceeding initiated by ICAI based on a CBI complaint. High Court noted a fundamental discrepancy: while the CBI complaint alleged collection of excessive professional fees in violation of Clause 7.7 of Code of Ethics, the disciplinary proceedings proceeded on an entirely different footing, namely, that the Assessee acted as a conduit for bribing an ITO.

Court held that a delinquent must be clearly informed of the exact charge he has to meet & disciplinary authority cannot shift the foundation of allegations midway. Since the imputation of charges in the complaint & the prima-facie opinion/enquiry were wholly inconsistent, the entire disciplinary action stood vitiated.

High Court rejected ICAI’s objections on res judicata & alternate remedy u/s 22G, holding that earlier writ was on a different cause of action & relegating the Assessee to appeal would be a “useless formality”. While observing that criminal & disciplinary proceedings can run parallel, Court emphasised that procedural fairness & clarity of charge are non-negotiable. Accordingly, the impugned disciplinary order dated 10.02.2018 was quashed & the Assessee stood exonerated from ICAI proceedings.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT