Vocation of Coaching is not confined to any profession- CA imparting coaching is not rendering professional services of CA

[CA DEV KUMAR KOTHARI]

Coaching or tuitions not professional activity of a particular profession:

Coaching of any subject is not confined to any profession. A person having knowledge of any subject and art of teaching can impart tuition and coaching on the subject in which he has knowledge.

CA,CS and CMA:

Profession of CA , CMA and CS are recognized as professions in respective fields.  These professions are regulated by respective institutes namely the Institute of Chartered Accountants of India (ICAI), The Institute of Company Secretaries of India (ICSI)  and the Institute of Cost Accountants of India (now ICAI earlier ICWAI)

Professional activities of these professions which are  specially reserved for profession and which can only be carried out by a qualified professional being member of institute and  holding certificate of practice from the institute are such activities or vocation which can be called as activities concerning to the profession.

Imparting of tuitions or coaching are not such reserved activities for any of these professions. A person having knowledge in any subject for studies of these course can impart tuition or coaching to students.

For example, a college lecturer of commerce or even a person having thorough knowledge in any subject can impart tuition and coaching.

Therefore, imparting of tuition or running a coaching centre even for students of CA, CS,,CMA is not specifically reserved for professions and these activities are not professional activities.

Prefix CA before name:

A member of ICAI is allowed to use prefix CA before his name. The precondition is membership of ICAI. Holding a certificate of practice is not a conditions. Therefore, a CA who is enrolled as member of ICAI but he is not in practice can also use prefix CA before his name.

There should not be restriction on activities by professionals:

Persons qualified as CA, CS, CMA can carry respective profession when a certificate of practice is held by him. A person can hold only one such certificate, even if he is qualified for all three professions. To this extent restriction can be called reasonable. However, placing many other restrictions are not reasonable and have not changed with time.

Therefore, restriction on any other activity is not a reasonable restriction. A person who have  knowledge and expertise can engage in other vocations  if he has time, interest and resources.

Why to impose a restriction which causes underutilization of his capabilities?

By qualifying any such course and having updating of knowledge and having art of doing any work say imparting tuitions or coaching  or imparting training in various fields , one can render service to society. Therefore there should not be any such restriction.

Advertisement must be allowed:

It is well known that for success of any business or profession marketing is important. Advertisement and publicity are very important for increasing activities and volume.

Professionals like CA, CS, CMA are barred from advertising their activities and achievements (except in some limited manners permitted by respective councils of the institutes). The restrictions are unreasonable and harsh in the present era of fast information and possibilities of doing work from anywhere and for clients situate anywhere.

With changes in time, increasing numbers of professionals, it is high time that marketing including advertisement and publicity must be allowed to professionals. This will improve scope of activities of professionals according to area and geographically as well.

Case before Delhi High Court:

Harpal Singh Dhingra Vs. Vinod Gupta  [2016 (7) TMI 1189 - DELHI HIGH COURT] , Appeal Number : CONT. CAS(C) 657/2016. C M. No. 19762/2016 (Exemption) and Date of Judgement/Order : 26/07/2016

Harpal Singh Dhingra had filed a Writ Petition before Delhi High Court, against Vinod Gupta. In course of that WP Vinod Gupta through his counsel given  an undertaking that he will not carry profession of accountancy till next hearing. However, in meantime Vinod Gupta issued advertisement for his coaching classes for students of CA. Therefore,  Harpal Singh Dhingra made another petition alleging contempt of court  contending that the respondent has wilfully violated the statement given to the Court on 14.03.2016 in W.P.(C) No.2130/2016.

During the hearing of the said petition on 14.03.2016, the respondent herein (petitioner in the said petition) gave the following statement:-

    “At this stage, Mr. Amit Sibal, learned senior counsel for petitioners on instructions, without prejudice to his client’s rights and contentions, states that petitioners shall voluntarily not practice the profession of Chartered Accountant till the next date of hearing.”

The statement made by the counsel for the petitioner was accepted by the Court and the petitioner was held bound by the same.

Court considered  provision as follows:-

“(2) A member of the Institute shal be deemed“to be in practice”, whether  individually or in partnership with chartered accountants in practice, he, in consideration of remuneration received or to be received –

(i) engages himself in the practice of accountancy; or

(ii) offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts, or records or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an accountant;

(iii) renders professional services or assistance in or about matters of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data; or

(iv) renders such other services as, in the opinion of the Council, are or may be rendered by a chartered accountant in practice; and the words “to be ipra ice” with their grammatical variations and cognate expressions shall be construed accordingly”

The court observed as follows:

In terms of Section 2 (2) of the act, when a person engages himself in the practice of accountancy, offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts, or records or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an accountant, renders professional services or assistance in or about matters of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data, he is deemed to be in the practice.

However, the allegation against the respondent is that the respondent is running teaching classes for teaching aspirants, who seek to become Chartered Accountants.

The advertisements annexed as Annexure P-2 to the petition show that the respondent is running coaching classes.

The respondent, by the said advertisements, is merely offering coaching to aspirants of the profession of chartered accountancy.

 In the said advertisements, there is nothing  the respondent was offering to render services of auditing or verification of financial transactions, books, accounts, or records or any services related to accounting procedure or recording presentation or certification of financial facts or data etc.

It was further contended  that the respondent along with his name is mentioning “CA”, which implies that he is offering the services of the accountancy and representing himself as Chartered Accountant.

The ruling of the court can be summarised as follows:

a. This contention is also not acceptable as the respondent is registered as a Chartered Accountant and till he is removed from the rolls, he is entitled to use the prefix and suffix “CA”.

b. The respondent, by the said advertisements, is merely offering coaching to aspirants of the profession of chartered accountancy. There is nothing to offer about services of CA professional.

c. the respondent had given the said statement on 14.03.2016, because the Board of Discipline of Institute of Chartered Accountants of India had held the respondent guilty of “other misconduct”.

d. The punishment was still to be awarded. The punishments that could be awarded were removal, suspension or reprimand.

e. The respondent has been awarded the punishment of reprimand and has neither been suspended nor removed from the rolls of the Institute of Chartered Accountants of India.

f.  Advertisements offering to take coaching classes and to impart of training to aspirants of the profession of chartered accountancy, in the above circumstances, cannot be said to be carrying on the profession of chartered accountancy so as to constitute wilful violation of the undertaking given to this court on 14.03.2016.

Though this judgment is restricted on issue of contempt, however in the judgment scope of professional services of CA have also been discussed. Advertisement of coaching classes has been considered as not for professional activities of a CA. This can be impliedly understood that a member of ICAI can carry coaching and it will not violate scope of professional activities.

Requests to the councils of three institutes:

 It is high time that institutes like ICAI, ICSI and ICMAI must change their approach with change in times and technology. The members of these institutions whether holding certificate of practice or not must be allowed diversification of activities where the knowledge and expertise can be use fully applied and for this purpose advertisement and publicity must also be allowed. The councils of the institutes are requested to rethink on the ground realities and to change policies as per requirement of times.

Why a CA should have to adopt via media to carry some  other activities, which he can gainfully and respectfully carry?

 Why he should not be allowed to carry many activities in his own name which presently he is forced to carry through other mediums like companies?

Discussions to this article

[abhi panic]

Sir,

I fully agree with your views.

You have nicely taken the judgment and put forth the ground reality.

In this age of competition, Marketing your professional services has become a norm.

It is time that the Associations & Councils keep their ears to the ground & understand the significance of present day demands and make way for the new thought process. Necessary guidelines and restrictions need to be incorporated so that no professional goes overboard with his claims.

Hopefully, your article should serve as an eye opener.

Thanks and regards for educating us as always with your thought provoking and informative articles.

abhishek panicker

[vikrant kelkar]

hello sir,

Can I get copy of original order of Board of Discipline of the Institute of Chartered Accountants of India where Mr. Gupta had been held guilty of “other misconduct” falling within the meaning of clause (2) Part-IV of the First Schedule to the Chartered Accountants Act, 1949 ??

I want to understand the contentions and counts on which he is declared as guilty.

Thanks.

Vikrant Kelkar

[Ganeshan Kalyani]

Sir, a focused profession is better than focusing on multiple options. I would say as compared to Indirect Taxation, Direct Taxation is much organised. (I may be wrong by saying this). This could be due to the Professional like CA, ICWAI (now ICAI) guiding the business to comply in accordance with the provision of Direct Tax. Thus this is meaningful profession and Service to the society. Hence should be focussed rather than multi focus. Thanks.