Facts of the Case

The complainant, CA Sidharth Gupta, filed a complaint against the respondent, CA Hitesh Goyal, who was an Executive Member of the Ludhiana Branch of NIRC of ICAI and held the post of Secretary during the term 2020–21. The complaint arose from a letter dated 23.09.2020 addressed by the respondent to the Chairman of the Ludhiana Branch, with copies marked to past Chairmen, senior members and the auditor of the Branch.

It was alleged that the letter contained serious allegations regarding the functioning of the Ludhiana Branch during FY 2019–20, including expenditure incurred on a workshop for students, which according to the respondent was doubtful. The complainant alleged that the respondent circulated the letter through email and WhatsApp groups without first discussing the issues in the Managing Committee or referring the matter to the ICAI Head Office, thereby maligning the image of the Branch and raising doubts about the integrity of the executive team.

It was further alleged that the respondent raised these issues nearly six months after approving and signing the Branch balance sheet on 26.05.2020 along with other executive members.

Issues Involved

Whether the respondent Chartered Accountant was guilty of “Other Misconduct” under Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 for circulating a letter raising concerns about branch functioning, allegedly without evidence and without following internal ICAI procedures, thereby maligning the image of the Branch.

Petitioner’s Arguments

The complainant contended that the respondent, being the Secretary of the Branch, acted irresponsibly by circulating unsubstantiated allegations without first raising them in Managing Committee meetings or the AGM. It was argued that the respondent used expressions such as “I think” in the letter, indicating assumptions rather than verified facts, and that the workshop expenditure questioned by the respondent was duly approved, conducted and supported by records. The complainant alleged that such circulation caused reputational harm to the Branch and its executive members.

Respondent’s Arguments

The respondent submitted that the financial matters referred to in the letter were already reflected in the Branch’s balance sheet and were within the knowledge of the Branch. It was contended that no objections or complaints had ever been raised against him in any Managing Committee meeting. The respondent further submitted that the complainant failed to raise the issue in any established forum such as the Managing Committee, AGM or before the President of ICAI, and instead directly approached the disciplinary mechanism.

Court Order / Findings

The Board of Discipline examined the complaint, submissions and proceedings. The Board noted that the respondent was an Executive Member during the relevant period and became Secretary only in February 2020. The Board observed that the complainant had not exhausted internal mechanisms available within ICAI, such as raising the matter in Managing Committee meetings, AGM or before ICAI authorities.

It was also noted that the AGM of the Branch was conducted virtually due to the COVID-19 pandemic and that the complainant neither attended the AGM nor submitted any material to substantiate the allegations. The Board found that the allegations were unsupported by evidence, no malafide intent was established, and the respondent’s explanation was clear and credible. The absence of the complainant during final hearing was also taken note of.

Important Clarification

The Board clarified that internal disagreements or concerns regarding branch administration should ordinarily be addressed through established ICAI forums. Raising issues relating to branch functioning, without proof of malice or personal gain, does not by itself constitute professional misconduct under the Chartered Accountants Act, 1949.

Final Outcome

The Board of Discipline, ICAI, held that CA Hitesh Goyal was NOT GUILTY of Professional Misconduct under Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 read with Section 22. Accordingly, the complaint was closed under Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, by order dated 25.01.2025.

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