ICAI Reprimands CA for Conducting Tax Audits While Holding Part-Time COP

The Disciplinary Committee (Bench-II) of the Institute of Chartered Accountants of India examined a complaint against CA Nayasen Krishnappa Mulky (M. No. 037817), Mumbai, based on information received from the Taxation Audits Quality Review Board.’

The matter arose from CBDT data concerning tax audit reports filed during FY 2010–11. It was alleged that the Respondent had conducted and uploaded two tax audit reports under Section 44AB of the Income Tax Act, 1961, while holding only a part-time Certificate of Practice (COP). As per Council decisions, members holding part-time COP are barred from performing attest functions, including statutory audits.

Main Issue: Whether conducting tax audits under Section 44AB while holding a part-time Certificate of Practice constitutes professional misconduct.

Committee’s Order: The Committee held that certification of tax audit reports is a statutory attest function that can only be undertaken by members holding a full-time COP. By conducting and uploading the reports despite being ineligible, the Respondent violated the provisions of the Chartered Accountants Act, 1949 and the relevant Regulations.

The Committee found him guilty of professional misconduct under Item (1) of Part II of the Second Schedule and ordered that he be Reprimanded under Section 21B(3)(a) of the Act.

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