CA who failed to report Interest on Fixed Deposit and Kisan Vikas Patra properly is Guilty of Misconduct

The Disciplinary Committee of ICAI in the matter of Shri Vishwas Y. Navalkar vs. CA. Rohit Tryambak Moghe has stated that CA who failed to report Interest on Fixed Deposit and Kisan Vikas Patra properly is Guilty of Misconduct.

That vide findings under Rule 18 (17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 dated 11th February 2023, the Disciplinary Committee was inter-alia of the opinion that CA. Rohit Tryambak Moghe, (M.No.045115), (hereinafter referred to as the Respondent”) was GUILTY of professional misconduct falling within the meaning of Items (6) and (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.

The Committee noted that the matter relates to audit of Shri Samartha Vyayam Mandir, Dadar, Mumbai (hereinafter referred to as the “Trust”) conducted by the Respondent for financial years 2012-13 and 2013-14. The Committee noted that, as per the above findings, the Respondent was found guilty on the following charges:

• That amount of Rs.93.20 lakhs spent on the repairs of the building was directly capitalized to building, thereby contravening the method of disclosure as prescribed under Schedule IX of Bombay Public Trust Act.
• The Respondent failed to report that interest on fixed deposits and interest on Kisan Vikas Patra of earmarked funds have been shown as revenue receipts.
• The Respondent failed to report that Trust has not followed accounting standards issued by ICAI.
• The Respondent failed to comply filing of audited financial statements and the Auditors’ report within 15 days of signing as required under section 34(2) of the Bombay Public Trust Act,1950.
• The Respondent failed to report regarding non-compliance of section 22 of Bombay Public Trust Act relating to filing of changed report specifying changes in movable and immovable properties.
• The Respondent failed to report non-disclosure and non-submission of Annual return required as per Foreign Regulation Rules in respect of foreign receipts along with separate disclosure in income and expenditure account.
• The Respondent failed to report properly that whether register of movable and immoveable properties is maintained or not.
• The Respondent failed to report properly in his audit report that tender has not been invited for repairs or construction involving expenditure exceeding Rs.5000.
• That in clause (i) of the audit report, the Respondent failed to report all cases of improper expenditure and also failed to report whether any expenditure was caused in consequence of breach of trust or misapplication or any other misconduct on the part of the trustees or any other persons while in management of trust.
• That the General Body of trust had appointed Respondent as the auditor for audit fee of Rs.25000 whereas the Respondent disclosed the same as Rs.35000 in financial statements.

The Committee noted that the Respondent was present through Video Conferencing Mode. The Respondent relied on his written submissions dated 10th March 2023. The Committee noted that the Respondent, in his submissions before it, mentioned that the auditee is charitable trust and that there is no commercial or business activity undertaken by the auditee. There is no deviation in accounting method except for Kisan Vikas Patra, wherein interest is accounted on an accrual basis as per receipt of interest from the bank. He further mentioned that no monetary loss was caused to anyone and the charges against him are entirely technical in nature and there was no mala-fide intention. He, accordingly, requested the Committee to take a lenient view in his matter considering his age (59 years).

The Committee while considering his oral and written submissions on record, noted that charges against the Respondent emanated due to dispute between the members of the Society. The Committee further noted that the lapses are technical in nature and more relates to compliances. The Committee noted that the nature of the lapses was oversight and unintentional. Further, there is no evidence to establish that the Respondent had any mala fide intention.

Accordingly, the Committee, looking into the gravity of the charge vis-a-vis submissions of the Respondent decided to give a reasonable punishment to the Respondent in the instant matter.

Therefore, keeping in view the facts and circumstances of the case, the material on record, and the submissions of the Respondent before it, the Committee ordered that the Respondent CA. Rohit Tryambak Moghe (M.No.045115), be reprimanded along with a fine of Rs.20,000 ­(Rupees Twenty Thousand Only).

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