Any conduct or action by a Chartered Accountant that brings disrepute to the profession or the Institute is regarded as misconduct even if it’s not related to professional work. So the government has planned a Penalty for Professional Misconduct of Chartered Accountants.
The penalty for Professional Misconduct of Chartered Accountants
Case: Council of the ICAI appellant(s) versus Shri Gurvinder Singh &ANR. Respondent(s)
As per the High Court in the given case the respondent (Shri Gurvinder Singh ) while dealing with the complainants was acting as an Individual which was absolutely a commercial transaction. The respondent was not acting or discharging any function as a CA while selling the shares held by him.
Judgment: The judgment was in favor of the respondent. Here the High Court did not impose any penalty on the respondent and granted him leave.
An appeal was made on the basis of the complaint dated 16.03.2005 against Gurvinder Singh, who is a CA, relating to the sale of 100 shares in 1999, which were transferred to the Chartered Accountant’s own name.
Observations of the disciplinary committee of the Chartered Accountant of India:
The disciplinary committee of the Chartered Accountant of India took up the case and observe that the actions of the Respondent (Gurvinder Singh) who himself is a CA is derogatory in nature and highly unacceptable. Under the Sec 22 read with Sec 21 of the Chartered Accountants Act, 1949 the committee held him responsible for the other misconduct.
Recommendations:
It was recommended to the High Court by The Council of the Institute of Chartered Accountants of India to eliminate Gurvinder Singh for a period of six months from the rolls. The council said that the court set aside section 21 and 22 of the Chartered Accountants Act, 1949 while giving the judgment.
The council further added that the court has not taken into consideration Section 21(3) of the Chartered Accountants Act, 1949 which says :
Where on receipt of any such information by, or of a complaint made to it, the Council is of the opinion that any member of the Institute has been guilty of any professional or other misconduct under the first schedule or the second schedules or the both, the Council should take the case to the Disciplinary Committee.
Schedule-I Part-IV says:
A chartered Accountant being the member of the Institute whether in practice or not shall be held guilty of other misconduct if:
(a)The council is of the opinion that his action whether professional or not has brought disrepute to the profession and the Institute.
(b) )Any criminal or civil court penalizes him for an illegal act which is punishable with the imprisonment for a maximum time period of six months;
On the basis of the facts, the disciplinary committee held Gurvinder Singh, a CA, guilty of a practice which is not in the professional capacity of a Chartered accountant.
The Supreme Court (bench comprises Navin Sinha J and Rohinton Fali Nariman J.) said that the judgment given by the High court is incorrect and should be kept aside. It returned the matter to the lower court for reconsideration and further added that however, both the parties are open for all the contentions.
Accordingly, the appeal is taken into consideration.