Page 369 - CA Final PARAM Digital Book.

is more than one, would constitute professional misconduct. This condition applies to any additional
office situated at a place beyond 50 kms from the municipal limits in which any office is situated.

However, exemption has been given to members in practicing in hill areas subject to certain conditions
such as:

− Such member/ firm be allowed to open temporary offices in a city in the plains for a limited period
not exceeding 3 months in a year.

− The regular office need not be closed during this period and all correspondence can continue to be
made at the regular office.

− The name board of the firm in temporary office should not be displayed at times other than the
period such office is permitted to function.

− The temporary office should not be mentioned in letter head, visiting card, any other documents
as a place of business of the member/ firm.

− Before commencement of every winter, it shall be obligatory on the member/firm to inform the
Institute that he/it is opening the temporary office from a particular date and after the office is closed
at the expiry of the period of permission, an intimation to that effect should also be sent to the office
of the Institute by registered post.

In the given case, Mr. Z has set up his regular office in the hill area of Kodaikanal, he decided to set up
a temporary office in the nearby city Marudai, situated at about 100 kms from the main office. As
planned, he took an office space on rent for the months of April, May & June. During these months,
his regular office was not closed. Further he was in-charge for both the offices. In view of
abovementioned criteria’s, he is eligible to avail the benefits of the above exemptions. Also, it is given
that the temporary office was open in Madurai for only 3 months and not beyond that. The fact that
Mr. Z is in-charge for both the offices, the temporary office being set-up in the plains which is 100 kms
away and the regular office kept open during the 3 months does not constitute any violation of the
provisions of the Chartered Accountant Act. Assuming Mr. Z has informed the Institute regarding
such temporary office in the prescribed manner.

Therefore, in the given case, no penal action needs to be taken on the basis of complaint registered
by Mrs. A, as Mr. Z is not guilty of professional misconduct.

QNO Noclar Old Course – (M23E)
660.800 TITANIUM CNO -- PE.440

SAM Yarns Limited - a listed Company, having its registered office at Meerut is engaged in manufacturing
of various types of yarns to be supplied to the textile mills. The Company has installed pollution control
equipment for processing the pollutants so that before discharge of effluents outside factory, the level of
pollution is kept at a level below the prescribed standard. The Company managed to get pollution clearance
certificate by unfair means, while still there continues to be breach of pollution control laws in matters of
discharge of polluting effluents. Amount of ₹ 10.25 Lacs had been incurred for arranging clearance
certificate and the amount incurred unlawfully had been booked as pollution recycling expenditure. The
matter had not reached to those in governance, and the Director-Finance who is a Chartered Accountant
came to know of these matters on review of major expenditure incurred during the period. Comment the
action/responses expected of Director - Finance (CA Rahul) referring to any applicable requirements of
Responses for NOCLAR under Code of Ethics.
Answer In the given situation, SAM Yarns Limited, a listed company, has installed pollution control equipment for
processing the pollutants to keep the level of pollution below the prescribed standard. The company managed
to get pollution certificate by unfair means whereas breach of pollution control laws still continues. For
arranging clearance certificate amount of 10.25 lakhs had been incurred unlawfully. CA. Rahul, Director
Finance, came to know about these matters on review of the same during the period.

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