The Institute of Chartered Accountants of India (ICAI) has found that Chartered Accountant ( CA ) is guilty of misconduct for accepting more than a specified number of tax audits under section 44AB.
The charge against Respondent CA Dhirendra Nath Mishra is that, he has conducted Tax Audit u/s 44AB of the Income Tax Act, 1961 beyond the limit prescribed by the Institute. It was alleged that the Respondent has conducted the 462 and 548 numbers of tax audit u/s 44AB of the Income Tax Act, 1961 during the financial year 2010-11 and 2011-12 respectively.
It is pertinent to note that the said restriction confines only to the audit assignments under Section 44AB of the Income Tax Act, 1981. There is no restriction as far as the other audit works. Further, Tax audit assignment is a time-bound assignment in the case of those coming under Section 44AB of the Income-tax Act and unlike other professional fields, the work of audit requires precision. The certificate of audit issued by a Chartered Accountant has statutory force for the purpose of Income Tax whereas a Chartered Accountant in practice is free to accept audits under Sections 44AD, and 44AE of the Income Tax Act, 1961 without any limit.
The committee noted that in the process of regulating and maintaining the status of chartered accountants, the measures taken to put a cap on tax audit assignments are intended to maintain and improve the quality of work and cannot in any way be stated to be an unreasonable restriction. Such restrictions are necessary for maintaining the status of Chartered Accountants and also for ensuring the quality of work by Chartered Accountants.
Relying on the findings of the committee that the Respondent has conducted 462 and 548 audits during the year 2010-11 and 2011-12 respectively which is apparently in violation of the Council General Guidelines, the Disciplinary Committee held that being a member of the institute, the respondent was expected to adopt the highest standard of ethical behavior and professional compliance of the Council General Guidelines, but he fails to do so. Keeping in view the facts and circumstances of the case CA Dhirendra Nath Mishra was guilty of professional misconduct and ordered the removal of the name from the Register of Members for a period of one month along with a fine of Rs. 5,00,000 that shall be paid within the period of one month and in case fails to pay the same as stipulated the name of the Respondent be removed for a period of six months in place of one month from the Register of Members.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
