In a recent ruling, the Delhi High Court confirmed the removal of a practicing Chartered Accountant from the register of Members held that carrying on business through Companies, trusts and Firms by a practicing Chartered Accountant would amount to professional misconduct.
The Council of Institution of Chartered Accountants, the petitioners, recommended the High Court to remove the name of the respondent, a practicing Chartered Accountant from the Register of Members for two years. The Counsel was of the view that he had incorporated three companies and a trust, with he being the founder director/president and had opened accounts in the name of the companies and the trust with the complainant’s branch at Agra. According to the petitioners, the activity of the respondent amounts to violation of various provisions of the Chartered Accountants Act, 1949.
The division bench comprising of Justice Pradeep Nandrajog and Justice Yogesh Khanna noticed that the respondent was signing the balance sheet of various companies in the capacity as a director and was also operating the bank accounts and signing various applications submitted to the bank. Further, on perusal of the various documents, it was seen that the respondent is acting as the promoter and Directors of various companies. Affirming the verdict of professional misconduct and the removal of the respondents name from the Register, the bench said, “in the instant case the admitted position is that the respondent is registered with the Council to practice as a Chartered Accountant. He cannot be a director of a company without the permission of the Council. The appellant is the promoter of various companies of which he is a director as per the evidence on record. Being a Chartered Accountant the respondent cannot actively carry on business through companies, trusts and firms. There is evidence that the respondent is doing so.”