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TMI Blog2014 (9) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... e Disciplinary Committee and the resolution of the Council, we find that they have mechanically arrived at the conclusions as to the misconduct It is added here that every inadvertent omission cannot be treated as an act of misconduct. The implication of even the minute punishment imposed against a Chartered Accountant is far-reaching. The complaint is dismissed. - Hon'ble Judges L.N. Reddy and Challa Kodanda Ram, JJ. For the Appellant : C.V. Rajeev Reddy ORDER L.N. Reddy, J. 1. This reference is made under Section 21(5) of the Chartered Accountants Act, as it stood in the year 2000. The facts, in brief, are as under. 2. The sole respondent is a Chartered Accountant and he is a partner in M/s. Bapuji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the respondent. 4. We have carefully gone through the complaint submitted against the respondent, reply thereto, the detailed report of the disciplinary committee and the order passed by the Council recommending punishment. The allegations made against the respondent are as under: 1. The auditors M/s. Bapuji Venkat had neglected their duties in reporting all the matters to be reported in their audit report of the company, M/s. South India Mercantile Pvt. Ltd. for the year 1988-89 in respect of the MAOCARO ORDER, 1988, issued by the Company Law Board in terms of Section 227(4-A) of the Companies Act, 1956. 2. The auditors had wrongly certified the Fixed Assets Schedule in which the gross block of assets had been wrongly repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to the Companies for a part of the year. Therefore I was of the opinion that the order applies to the Company's accounts for the year 1989-90 and not for the year 1988-89. Hence I have not included particulars required under MAOCARO 1988 in my report in the accounts for the year ended 31.03.1989. 2. I admit that the Fixed Assets Schedule attached to the Balance Sheet did not contain some of the Particulars as required by the Companies Act. In this connection I would like to submit that during the period in which I was finalizing the accounts of the Company my mother was hospitalized for about two months due to Heart problem. As such I entirely depended on my assistants in completion of the audit. As the mistake that has occurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs is incorrect. It is clearly indicated in the accounts that the Fee paid to me is towards Statutory Audit. There were no other Fees paid to me during the year for any other Services. 6. That the allegation that the accounts for the year ended 31.03.1989 were signed before the accounts for the years ended 31st March, 1987 and 1988 were approved in the AGM is not correct. The accounts for the years ended 31.03.1987 and 31.03.1988 were approved by the members in the Annual General Body Meetings of the Company held on 8th July, 1987 and 26th July, 1988 respectively. 6. Before we proceed to express our opinion on the allegations made against the respondent, we intend to take into account certain aspects. 7. Even according to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrected. The Chartered Accountant or for that matter, even a statutory authority can vouch for 100% accuracy of accounts, particularly when there exist several variables. 9. Misconduct can be attributed to a Chartered Accountant mostly when he has resorted to certain exercise knowing fully well that the same is contrary to law. An opinion formed by him, which ultimately turns out to be not correct, cannot be treated as an act of misconduct. It is only when mala fide intention exists in him either to mislead his client or to defraud the Government that an act of misconduct can be said to have occurred. 10. For example, in the instant case, the first charge was about the compliance with MAOCARO order, 1988 issued by the Company Law Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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