Page 373 - CA Final PARAM Digital Book.

Part 2- FIRST SCHEDULE

QNO First Schedule, Part I,Cl,1-Working on behalf of CA or CA firm Old Course – (M19E, M22M, N22E, M23M)
660.100 TITANIUM CNO – PE.1040
CA Sant, a newly qualified professional with certificate of practice, approached CA Pant, the auditor of his
father’s company M/s Max Ltd., to allow him to have some practical and professional knowledge and
experience in his firm before he can set up his own professional practice. CA Pant allowed him to sit in his
office for 6 month and allotted a small chamber with other office infrastructure facility. In the course of
his association with CA Pants office, he used to provide tax consultancy independently to the client of
the firm and also filed few IT and GST return and represented himself before various tax authorities on
behalf of the firm although no documents were signed by him. During his association in CA Pants office
he did not get any salary or share of profit or commission but only re-imbursement of usual
expenses like conveyance, telephone etc. was made to him. After the end of the agreed period, he was
given a lump sum amount of 3,00,000 by CA Pant for his association out of gratitude. Examine the case
in the light of code of professional misconduct.
Answer Part I -- Relevant Standards & Laws
▪ Clause (1) of Part I of the First Schedule to the Chartered Accountants Act, 1949

Part II -- Requirements of Relevant Standards & Laws
➢ It states that a chartered accountant in practice shall be deemed to be guilty of professional
misconduct if he allows any person to practice in his name as a chartered accountant unless such
person is also a chartered accountant in practice and is in partnership with or employed by him.

➢ The above clause is intended to safeguard the public against unqualified accountant practicing under
the cover of qualified accountants. It ensures that the work of the accountant will be carried out by
a Chartered Accountant who may be his partner, or his employee and would work under his control
and supervision.

Part III – Case Discussion
➢ In the instant case, CA Pant allowed CA Sant (who is a newly qualified CA professional with COP) to
sit in his office for 6 months, and allowed him to provide tax consultancy independently to his firm’s
clients, filing of some IT and GST Returns.
➢ He also allowed him to appear before various tax authorities on behalf of his firm. CA Sant was only
reimbursed with his usual expenses and was not paid any salary or share of profit for the same.
➢ However, after the end of agreed period he was given a lump-sums of rupees 3,00,000 for his
association out of gratitude.

Part IV– Conclusion
➢ Thus, in the present case CA. Pant will be held guilty of professional misconduct as per Clause (1) of
Part I of First Schedule to the Chartered Accountants Act, 1949 as he allowed CA Sant to practice in
his name as Chartered accountant and CA Sant is neither in partnership nor in employment with CA.
Pant.
Author’s Note
Here it is clearly written that he “did not” get any share in salary or commission. So, no question of Clause
(2) of Part I of First Schedule to the Chartered Accountants Act, 1949

QNO First Schedule, Part I,Cl,1- Brother-in-law practicing on behalf CA New Course – (SM23)
660.200 TITANIUM CNO -- PE.1020
Mr. C, Chartered Accountant, in practice allowed his brother-in-law Mr. P who is not a Chartered
Accountant, to practice in the name of CA. C. He also allowed Mr. T who is employee in his firm to practice
in the name. Whether Mr. C is correct in allowing his brother-in-law Mr. P and Mr. T employee of his firm
to practice in his name
Answer Allowing to Practice in a Chartered Accountant’s name: As per Clause (1) of Part I to the First Schedule to
Chartered Accountants’ Act, 1949, a Chartered Accountant in practice is deemed to be guilty of professional
misconduct if he allows any person to practice in his name as a chartered accountant unless such person is
also a chartered accountant in practice and is in partnership with or employed by him.
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