Ashish Agarwal Vs The Institute of Chartered Accountants of India(Delhi High Court)
Date-01/09/2022
Sub-Whether complaint made against a Chartered accountant in respect of an alleged misconduct committed in audit of accounts for the year 2003-04 to 2007-08 is barred by limitation as per Rule Rule 12 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 which prescribes a time limit on entertaining complaint or information.

The matter relates to complaint made by Serious Fraud Investigation office(SFIO) on 15-4-2021 in respect of audit of accounts of an entity conducted for the year 2003-04 to 2007-08 and alleged irregularities committed. The petitioner contended that the complaint was barred by limitation as per the aforesaid rules which prescribed 7 years as the time limit. Moreover, as the per relevant audit standards as well as Income-tax Act,1961 the petitioner was not required to maintain the audit records for the relevant years and was thus was unable to defend itself and hence the complaint was not maintainable. The ICAI contented that the writ petition was premature as the disciplinary committee would take a view in accordance with the rules including regarding the objections raised by the petitioner.

The Court,while rejecting the contention of the petitioner that the Disciplinary committee was obliged to reject all complaints the moment it found that it was related to an issue which was 7 years old but at the same time the court noted that the Disciplinary committee having summarily rejected the preliminary objections of the petitioner was not correct and therefore directed the DC to consider the objections afresh by passing a speaking order in accordance with the law.

This judgement will be helpful to all the practising CAs who are engaged in attest functions.

Ramesh Patodia
07-09-2022