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TMI Blog2019 (11) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 'KNA') not guilty of professional misconduct within the meaning of Clause (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949. Accordingly, the Board has closed the case instituted at the instance of the petitioner. 2. The petitioner (earlier known as 'Vinod Sanjeev Bindal & Co.') is a firm of Chartered Accountants and claims that it was appointed as an auditor to audit the accounts of respondent no.4 (Tracon International Limited -TIL) for the financial year commencing 01.04.2006. The petitioner asserts that it continues to be the statutory auditor of TIL, as it has neither resigned nor has it been removed. The petitioner claims that it did not complete the audit for the financial year ending 31.03.2007, since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een the petitioner and TIL is also evident from a letter dated 11.02.2009, whereby the petitioner had made allegations that certain properties of TIL had been sold at a value much lower than the prevailing market rate. 7. Having stated the above, it is necessary to note that the controversy in the present petition is limited and relates to whether KNA is guilty of any professional misconduct. 8. It appears that the accounts of TIL were not audited by the petitioner firm after the year 2005-06. The final accounts for the year ending 31.03.2007, 31.03.2008 and 31.03.2009 were purportedly signed by respondent no.6 (Sh. Manu Sharma). There is some controversy in this regard as it is alleged that the said accounts had been signed on a back d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resignation, failing which the petitioner would file a complaint with ICAI. It appears that KNA did not cower to the threat held out by the petitioner and therefore, the petitioner filed a complaint with the ICAI. 12. In its complaint dated 30.09.2013, the petitioner made several allegations against the Board of Directors of TIL. Insofar as KNA is concerned, it was alleged that KNA had taken up the assignment without communicating with the petitioner. It was also stated that Sh. Alok Shukla, partner of respondent no.3, had signed the annual accounts for the financial years ending 31.03.2010 to 31.03.2012 in his capacity as a statutory auditor without obtaining the "no objection certificate" (NOC) from the petitioner which the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. The Board also noted the submission made on behalf of KNA that the bank statement of the TIL established that professional fees had been paid to M/s Manu Sharma and Co. The Board also observed that M/s Manu Sharma and Co. had not lodged any complaint with either the Registrar of Companies, Income tax authorities or the police alleging that they had not audited the accounts of TIL for the financial years 2006-07 to 2008-09. 16. In view the above, the Board held that KNA was not guilty of any professional misconduct as alleged, as the petitioner was not the previous auditor with which KNA was required to communicate before accepting the assignment to audit the accounts of TIL. 17. At the outset, it is relevant to note that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epts a position as auditor previously held by another chartered accountant or certified auditor who has been issued certificate under the Restricted Certificate Rules, 1932 without first communicating with him in writing;" 18. In the present case, the accounts filed with the Registrar of Companies for the years 2006-07 to 2008-09, that is, for the three years prior to the period for which KNA was appointed, had been audited by M/s Manu Sharma and Co. and therefore, there was no necessity for KNA to correspond with the petitioner, since the petitioner was not the previous auditor of TIL. 19. As observed above, the petitioner was not appointed as an auditor for the financial year 2007-08. The assertion made by the petitioner that it conti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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