ICAI Suspends CA for Six Months for Holding Full Time Job While Running His Own Firm

The Institute of Chartered Accountants of India (ICAI) has suspended a Chartered Accountant (CA) from its Register of Members for six months and imposed a ₹50,000 fine. The disciplinary action came after the ICAI found him guilty of professional and other misconduct for working a full-time job while also running his own practice.

Complaint Filed by Employer

The case began when the CEO of a private company, where the CA was hired as General Manager (Accounts & Finance) in June 2021, filed a complaint. The employer accused him of hiding key facts about his CA practice, misrepresenting his job history, and continuing audits and certification work while being in full-time employment. The complaint also included documents such as Form 16, salary-related emails, and employment forms.

What are the ICAI rules?

As per ICAI regulations, a CA who is in full-time employment cannot simultaneously:

• run a private practice,
• sign audits,
• issue certificates,
• hold a proprietary firm name, or
• be a partner in a CA firm.

A CA in full-time salaried employment must surrender Certificate of Practice (COP). Holding COP + Full-time job at the same time is considered professional misconduct.

What CA said?

During the proceedings, the CA submitted written replies and made verbal arguments. He said he had declared his practice status in the job application, and claimed he only accepted the job during the COVID-19 period due to financial problems. He further alleged unethical practices inside the company, including misuse of cash sales and illegal commissions.

What the ICAI Found

After checking all records, the Disciplinary Committee framed two main charges against him:

1. Hiding Full-Time Practice While Taking the Job

• The CA declared he was in self-practice only since May 2019.
• ICAI records showed he had been in full-time practice since April 17, 2012.
• The UDIN Directorate confirmed he generated 10 UDINs for audits, certifications, and other professional work during his employment period.
• His appointment letter clearly prohibited taking up any other work, business, or profession while employed.

2. Not Informing ICAI About His Job

• He failed to report his full-time employment to ICAI while holding a Certificate of Practice.
• He did not get prior permission from the ICAI Council, violating Regulation 190A of the Chartered Accountants Regulations, 1988.
• He also did not disclose his ₹6,16,022 salary in his Income Tax Return for AY 2022-23, despite tax being deducted by the employer.

Final Decision by ICAI

The Committee held that the CA had committed professional misconduct under the Chartered Accountants Act, 1949. It noted that his actions violated ethical duties and harmed the reputation of the profession. As punishment, the ICAI ordered that:

• His name be removed from the Register of Members for six months, and
• He must pay a ₹50,000 fine within 60 days.