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October 29, 2020

Last Year 300 Disciplinary case against CAs, 78 Punished by ICAI. More than 1 Cr UDIN Generated

by CA Shivam Jaiswal in ICAI

Last Year 300 Disciplinary case against CAs, 78 Punished by ICAI. More than 1 Cr UDIN Generated – ICAI 71st Annual Report

The Institute of Chartered Accountants of India (ICAI) is a statutory body established by an Act of Parliament, viz. The Chartered Accountants Act, 1949 for regulating the profession of Chartered Accountancy in the country. The Institute, functions under the administrative control of the Ministry of Corporate Affairs, Government of India. The Council of ICAI presented its 71st Annual Report for the year ended 31st March 2020 on 30th September, 2020.

For the year ended 31.03.2020 the ICAI has earned a net surplus of Rs. 29,919 lakhs which is 5.57% more than the corresponding previous year. The ICAI has total accumulated surplus of Rs. 226,974 lakhs while the corresponding figure for the previous year was 196,347 lakhs. The Report highlighted the important activities of the Council and its various Committees during the year 2019-2020, besides the accounts of the Institute for the year ended on 31st March 2020.

The Disciplinary Committee of ICAI awarded to punishments to CA’s in 78 cases

The Disciplinary Committee has been constituted by the Council of ICAI under Section 21B of the Chartered Accountants Act, 1949 so as to look into matters of professional misconduct by members which fall within the purview of Second Schedule or both First and Second Schedules to the Chartered Accountants Act, 1949. During FY 2019-20, the Disciplinary Committeeconcluded its enquiry in 300 cases, which included cases referred to it in previous years.

ICAI also reported that during the current year 2020-2021, a new bench of the Disciplinary Committee has been constituted and thus with the four Benches of the Disciplinary Committee i.e. Bench I, Bench II, Bench III and Bench IV and the Board of Discipline, it is expected to have an expeditious disposal of cases under inquiry apart from the consideration of the Prima Facie Opinion formed by the Director (Discipline). In addition, the Disciplinary Committee under Section 21D headed by the President, ICAI has also been constituted to look into any residual old cases that are/may be referred back by the Council.

Given below is the summary of the number cases of professional misconduct looked in to by the Disciplinary Committee during FY 2019-20

ParticularsNumber of Cases
Number of meetings of the Disciplinary Committee held during the aforesaid period54
Number of Complaint/Information cases considered by the Disciplinary Committee (under Section 21B) wherein prima facie opinion of the Director (Discipline) was formed.288
Number of cases (Complaint/Information cases) in which enquiry was completed by the Disciplinary Committee (including those cases, which were referred to the Disciplinary Committee during the earlier years).300
Number of cases (Complaint/Information) in which punishment has been awarded by the Disciplinary Committee (including those cases, which were referred to the Disciplinary Committee during the earlier years78

513 Cases were pending in various courts under the Chartered Accountants Act, 1949

Total number of pending cases in various Courts as on 30.06.2020 were as follows:

Nature of CaseNumber of Cases
Reference Cases filed under Section 21(5) Of the Chartered Accountants Act, 1949 pending before different High Courts (Note 1)168
Special Leave Petition (SLP)/Appeal filed against the Judgment of the High Court in Reference Cases pending in the Supreme Court10
Writ Petitions filed arising out of disciplinary action under Section 21 of the Chartered Accountants Act, 1949148
Court Cases related to Non-Disciplinary Matters pending before various courts132
Cases arising out of Violation of Section 24 of the Chartered Accountants Act, 1949 pending before various courts (Note 2)24
Cases arising out of Violation of Section 24A of the Chartered Accountants Act, 1949 pending before various courts (Note 3)2
Appeals (filed by members of the Institute under Section 22G of the Chartered Accountants Act, 1949) before the Appellate Authority under Section 22A of Chartered Accountants Act, 1949 as amended by the Chartered Accountants (Amendment) Act, 2006.29
Total Number of Cases as on 30.06.2020513

Note 1 – According to Section 21(5), where the misconduct in respect of which the Council has found any member of the Institute guilty is misconduct other than any such misconduct as is referred to in Section 21(4), it shall forward the case to the High Court with its recommendations thereon.

Note 2 – According to Section 24,any person who:

i. not being a member of the Institute-

a. represents that he is a member of the Institute; or

b. uses the designation Chartered Accountant; or

ii. being a member of the Institute, but not having a certificate of practice, represents that he is in practice or practices as a chartered accountant,

shall be punishable on first conviction with fine which may extend to Rs 1000, and on any subsequent conviction with imprisonment which may extend to 6 months or with fine which may extend to Rs 5000, or with both.

Note 3 – According to Section 24A, any person who:

  • use a name or a common seal which is identical with the name or the common seal of the Institute or so nearly resembles it as to deceive or as is likely to deceive the public;
  • award any degree, diploma or certificate or bestow any designation which indicates or purports to indicate the position or attainment of any qualification or competence similar to that of a member of the Institute; or
  • seek to regulate in any manner whatsoever the profession of chartered accountants.

shall, without prejudice to any other proceedings which may be taken against him, be punishable with fine which may extend on first conviction to Rs 1000, and on any subsequent conviction with imprisonment which may extend to 6 months, or with fine which may extend to Rs 5000, or with both.

1.05 Crore UDINs have been generated by CAs till 31st March, 2020

It was noticed that financial documents and certificates were being attested by people who were posing as CA members and are misleading the authorities and stakeholders.To curb the practice, ICAIhad asked all the members to register for UDIN. Chartered accountants can get their UDIN number through the institute’s portal.The Institute of Chartered Accountants of India has also made it mandatory for chartered accountants to register all certificates issued by them with the UDIN portal, which can be verified by users and stakeholders.

Presently UDIN is mandatory for all Certification done by Practising Chartered Accountants, all GST & Tax Audit Reports and other Audit, Assurance and Attestation functions.

Here are the details of UDINs generated till 31st March, 2020

Category-wise UDINs

Certificates49.85 lakhs
GST & Tax Audit37.12 lakhs
Other Audit & Assurance11.56 lakhs

Number of Practising Members – Registered & Generated UDINs

In Full-time Practice1,38,441
Registered on UDIN1,12,786
Generated UDIN1,05,802

UDINs Generated by Members vis-à-vis Articles under them

Members training ArticlesNumber of membersNumber of UDINs
No Articles49,97729,02,954
1 to 230,02229,45,910
3 to 411,91915,54,126
5 to 78,89813,98,989
8 to 104,83310,28,096
> 10 Articled Assistants15324,273

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