ICAI Penalises CA for Accepting Tax Audit Without Obtaining NOC from Previous Auditor:

ICAI Penalises CA for Accepting Tax Audit Without Obtaining NOC from Previous Auditor The Institute of Chartered Accountants of India (ICAI) Board of Discipline has announced its decision concerning a complaint filed by CA Atul Ramnlklal Mathuria against a Chartered Accountant (CA) named Jimy Pirosha Wankadia. The dispute was related to the acceptance of a tax audit assignment without following the mandatory procedure prescribed under the Chartered Accountants Act, 1949. The hearing of the case was conducted through video conferencing, and the final decision was released on December 12, 2025. The complaint demonstrates that the complainant's company acted as a tax auditor of a client named Nishad Mehta, owner of Mehta & Associates, for the Financial Year 2018-19. For the subsequent financial year, i.e., FY 2019-20, CA Jimy Wankadia conducted the tax auditing of the said client without first communicating with the previous auditor, which was the complainant's company. This action is obligatory as per Item (8) of Part I of the First Schedule to the Act.

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This provision requires a chartered accountant (CA) to obtain written communication or a No Objection Certificate (NOC) from the previous auditor before accepting such an assignment. However, CA Jimy Wankadia did not comply with the same. When asked the reason, CA Jimy Wankadia did not deny the basic facts; however, he stated that his family was going through serious health issues during the COVID-19 pandemic, including the death of his sister-in-law. He relied on his client to deliver the NOC. Further stated that he did not have any intention to misconduct in his profession. He requested ICAI to give him a last chance and assured them the same mistake would not be repeated in the future. When the ICAI Board of Discipline carefully examined the facts and documents related to the case, it noted the respondent CA had clearly accepted the requirement of a written NOC but still proceeded with the audit without receiving it. The board asserted that it is not fair to rely on the client for such communications; this does not fulfil the provisions of statutory compliance.

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Based on the aforesaid findings, the ICAI Board of Discipline held the respondent CA guilty of professional misconduct and imposed a monetary penalty of Rs. 25,000 for non-compliance with provisions of Item (8) of Part I of the First Schedule to the Act.