Facts of the Case

The disciplinary proceedings arose on a complaint filed by CA Kumar Hari Ji (M. No. 057882), Patna, against CA Ranjit Kumar (M. No. 405529). The respondent had been holding a Full-Time Certificate of Practice since 30.09.2005 and was found to be simultaneously working as the Chief Financial Officer in a Government organisation of the State of Bihar known as Bihar Rural Livelihoods Promotion Society (JEEVIKA). As per Clause (11) of Part I of the First Schedule to the Chartered Accountants Act, 1949 read with Regulation 190A of the Chartered Accountants Regulations, 1988 and the Code of Ethics, a Chartered Accountant in practice is prohibited from engaging in any other business or occupation without prior permission of the Council of ICAI.

The complainant produced documentary evidence including official staff lists and information from the official website of JEEVIKA showing the respondent as a full-time Chief Financial Officer. The respondent claimed that his engagement was contractual and performance-based and not a full-time employment. However, he failed to produce essential documents such as appointment letter, contract, salary slips, Form 26AS or evidence of prior permission from ICAI. The respondent later surrendered his Certificate of Practice and membership in 2024.

Issues Involved

Whether holding a Full-Time Certificate of Practice while simultaneously working as Chief Financial Officer in a Government organisation constituted professional misconduct under Clause (11) of Part I of the First Schedule to the Chartered Accountants Act, 1949.

Petitioner’s Arguments

The complainant submitted that the respondent was in full-time employment with a Government organisation while continuing to hold a Full-Time Certificate of Practice, which was expressly prohibited under the Chartered Accountants Act and the Code of Ethics. Documentary evidence was placed on record to establish that the respondent was functioning as a full-time Chief Financial Officer.

Respondent’s Arguments

The respondent, through written submissions and through counsel, contended that his role with JEEVIKA was contractual and subject to renewal based on performance and therefore should not be treated as full-time employment. It was submitted that the violation was neither intentional nor deceitful and occurred due to work pressure and misunderstanding. It was further stated that the respondent had not performed any attestation functions, had not generated UDINs, and had subsequently surrendered his Certificate of Practice and membership.

Court Order / Findings

The Board of Discipline examined the documentary evidence and noted that the respondent was shown as a full-time Chief Financial Officer in official records of JEEVIKA. The Board observed that despite repeated opportunities, the respondent failed to substantiate his claim of contractual engagement or to produce any evidence of having obtained prior permission from ICAI. The Board further noted the respondent’s own admission through counsel that he had held Full-Time Certificate of Practice while working with the Government organisation.

The Board held that such dual engagement was in direct violation of Clause (11) of Part I of the First Schedule to the Chartered Accountants Act, 1949 read with Regulation 190A of the Chartered Accountants Regulations, 1988 and Appendix 9 of the Code of Ethics. Accordingly, the respondent was held guilty of professional misconduct.

Important Clarification

The Board clarified that the prohibition on engaging in any other business or occupation while holding a Full-Time Certificate of Practice is fundamental to maintaining professional independence, integrity and objectivity. Absence of intent or subsequent surrender of Certificate of Practice does not absolve a member from misconduct committed during the period of holding a full-time COP.

Final Outcome

The Board of Discipline, in exercise of powers under Section 21A(3) of the Chartered Accountants Act, 1949, ordered removal of the name of CA Ranjit Kumar (M. No. 405529) from the Register of Members for a period of one (1) month.

Source Link- https://www.mytaxexpert.co.in/uploads/1768890649_CA.KumarHarijiM.No.057882vsCA..pdf

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