Chartered accountants in India may lose their license for misconduct even outside work

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  • Chartered accountants in India could reportedly face action who bring ‘disrepute’ the profession even outside work
  • CAs may lose their license in case they are found guilty of misconduct.
  • According to Supreme Court ruling, CAs could be penalised regardless of whether the misconduct was work-related.
Professional or other misconduct even outside work could have severe consequences for India’s chartered Accountants, according to a recent ruling by India’s Supreme Court.

Additionally, CAs could be stripped off their professional licence, effectively banning them from work as per the ruling, Economic Times reported.

“A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months or brings disrepute to the profession or the Institute as a result of his action whether or not related to his professional work.” the Supreme Court said in its judgment dated 16 November.

Even drinking and driving or creating a public scene that disgraces the accounting profession could potentially amount to disciplinary action, according to the ET report, which cited Manoj Fadnis, former president of Institute of Chartered Accountants of India (ICAI) said.

The decision came when a Supreme Court bench comprising Justice Rohinton Fali Nariman and Justice Navin Sinha was hearing a case related to an earlier high court judgment involving the Institute of Chartered Accountants of India (ICAI), which had earlier initiated proceedings against a CA, Gurvinder Singh, who was accused of misconduct in a matter related to the accused “transferring 100 shares” in this own name. While the ICAI council and Gurvinder Singh had settled the case between them, the disciplinary committee found that Singh’s conduct was “derogatory in nature and highly unbecoming.” Further details of the case weren’t disclosed.

The Supreme Court bench overturned the high court ruling, saying it had not correctly appreciated the Sector 21(3) of Chartered Accountants Act 1949, under which ICAI could enforce disciplinary action in case an accused was guilty of a civil or criminal offence that carried a punishment under the Indian penal code of less than six months.