--- title: An incoming tax auditor's own acceptance letter undid the defence of leaving communication to the client. description: An incoming tax auditor asked a client to carry a no-objection letter to the outgoing auditor instead of writing directly. His own acceptance letter admitted the duty, and the Board fined him ₹25,000. case_number: BOD 728/2024 file_number: PR/389/2022/DD/347/2022/BOD/728/2024 forum: board-of-discipline institute: icai decided_on: 2025-09-26 punished_on: 2025-12-12 outcome: Fine clauses: Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/01/17.BOD-728-2024.pdf published: 2026-09-07 author: Jainam Shah keywords: bod 728 2024, item 8 part i first schedule, tax audit section 44ab, no objection certificate acceptance letter, board of discipline fine, communication with previous auditor source: /icai/board-of-discipline/bod-728-2024 --- # An incoming tax auditor's own acceptance letter undid the defence of leaving communication to the client. Two chartered accountants audited the same small business a year apart, and the rule meant to connect an outgoing auditor to an incoming one never got used.[^parties] The auditor who took over never wrote to the one he replaced, and left the message to travel through the client instead. ## What happened ```timeline A firm carries out the tax audit of a proprietor's business for one financial year. The following year, the proprietor moves the assignment to a different chartered accountant. The incoming auditor drafts a letter addressed to the outgoing firm asking for a no-objection certificate, but instead of sending it himself, hands it to the client to deliver. His own written acceptance of the assignment states that the audit will begin only once a written no-objection comes back from the outgoing firm. The audit goes ahead anyway, and is completed for that year, without any written no-objection ever reaching the incoming auditor. He later says a pandemic and a family bereavement kept him from following up directly. Years pass before the outgoing firm complains to ICAI that it was never communicated with at all. A dispute also surfaces over how the outgoing firm came to see the client's balance sheet for a year it had not audited, and over whether the no-objection paperwork produced afterwards was genuine or written up after the complaint was filed. The Board examines the incoming auditor's own acceptance letter, finds it treats the written no-objection as a precondition he never waited for, and holds the charge proved. Months later, at a separate hearing, it fixes his punishment. ``` The incoming auditor's own letter did the damage. His written acceptance of the assignment, dated 17th March 2020, made the start of the audit work contingent on receiving a written no-objection certificate from the outgoing firm (para 15). He went ahead and completed the audit without ever receiving one. That single sentence in his own document was enough for the Board to treat as settled that he knew exactly what Item (8) required of him. ## The charge **Item (8) of Part I of the First Schedule** requires a chartered accountant to communicate with the retiring auditor, in writing, before accepting a position that auditor previously held.[^item8] The Board reproduced the clause in full: > "A chartered accountant in practice shall be deemed to be guilty of professional misconduct, if > he — (8) accepts a position as auditor previously held by another chartered accountant or a > certified auditor who has been issued certificate under the Restricted Certificate Rules, 1932 > without first communicating with him in writing" (para 13) It was undisputed that the complainant firm had audited the client the previous year, that the respondent took over the following year, and that the respondent never directly wrote to the complainant before doing so (para 14). ## What the respondent said He did not dispute the underlying facts, only the suggestion that his communication had not been genuine. The no-objection request, he said, had gone out on his own letterhead, signed personally, with the client agreeing to carry it across. He argued the clause made no allowance for circumstances like his: the COVID-19 pandemic had brought serious illness and the death of a relative into his household, he was the family's sole earner and unwell himself, and relying on the client to deliver the letter was, at worst, an error of judgment rather than misconduct. He pointed out that the complainant's fees had been paid in full and that he had nothing to gain from bypassing proper communication, and he questioned how the complainant had come to see a balance sheet for a year it had never audited. ## What the Board held The Board treated the acceptance letter as decisive: > This self-imposed condition by the Respondent reflects a clear acknowledgment of the statutory > duty under Item (8). Yet, notwithstanding such acknowledgment, the Respondent proceeded not only > to commence but even completed the audit assignment, without ever receiving the requisite > communication from the Complainant. This act, in the view of the Board, constitutes a deliberate > departure from the professional standards mandated by the governing statute (para 15) It took the pandemic hardship seriously rather than dismissing it, but found no reason it should excuse the omission: sending a written communication took nothing more than an email, and nothing in the respondent's circumstances explained why that one message could not have gone out directly (para 16). Handing the letter to the client to deliver did not discharge a duty the clause places on the incoming auditor personally, and the Board found the complainant had substantiated its case with corroborative documentary evidence (para 18). ## The order > in the considered opinion of the Board, the Respondent is 'Guilty' of Professional Misconduct > falling within the meaning of Item (8) of Part-I of the First Schedule to the Chartered > Accountants Act, 1949 Punishment followed at a separate hearing more than two months later, held by video conference.[^coram] Given the opportunity to be heard, the respondent confirmed he had received the findings, asked the Board for a sympathetic view and undertook not to repeat the conduct. Weighing the misconduct against that admission, the Board recorded: > upon consideration of the facts of the case, the consequent misconduct of [the Respondent] and > keeping in view his admission before it, the Board decided to impose a Fine of Rs.25,000/- > (Rs. Twenty-Five Thousand only) upon him[^bracket] A fine sits above a reprimand on the Board's scale of punishment, though below removal from the Register.[^fine] ## Why it matters *This section is ours, not the Board's.* **Your own acceptance letter can convict you.** The respondent's letter made the audit conditional on a written no-objection he never insisted on before finishing the work — an admission in his own hand of exactly the duty he was accused of skipping. Do not put a condition in writing that you do not intend to enforce. **Hardship excuses delay, not omission.** The Board accepted the pandemic circumstances as genuine but noted that writing one email takes minutes even in a crisis. If the clause requires you to write, find a way to write, however briefly. **Handing the letter to the client is not communicating with the auditor.** Item (8) puts the duty on the incoming auditor personally. Send it yourself, on your own record, rather than through anyone else. **Regret at the punishment stage affects the amount, not the finding.** The respondent's admission and assurance came only after guilt was already decided, and it shaped the fine, not the verdict. Cooperate before the finding, not after it. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *CA. Atul Ramniklal Mathuria (M.No. 039604), Partner, M/s Bhaskar Atul & Associates, Mumbai* was the complainant, the outgoing tax auditor. *CA. Jimy Pirosha Wankadia (M.No. 044236), Proprietor, M/s Wankadia & Co., Mumbai* was the respondent, the incoming tax auditor. The client was a sole proprietorship, Mehta & Associates, whose tax audit moved from the complainant's firm to the respondent's between the financial years 2018-19 and 2019-20. [^item8]: Item (8) of Part I of the First Schedule requires a chartered accountant to communicate with the retiring auditor, in writing, before accepting a position as auditor previously held by another member. The audit in question was a tax audit for the financial year 2019-20. [^coram]: The findings, signed 26 September 2025, were passed by CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty, IAAS (Retd.) (Government Nominee) and CA. Priti Savla (Member), following a final hearing on 29 July 2025 at ICAI Tower, Mumbai — after earlier hearings on 26 June 2024 and 18 January 2025 were adjourned at each side's request in turn. The same three members passed the punishment order by video conference on 12 December 2025, after notifying the respondent of the proceeding on 2 December 2025. [^bracket]: The order names the respondent in full at this point: "the consequent misconduct of CA. Jimy Pirosha Wankadia (M. No. 044236)". Nothing else on this page has been altered from the order's own words. [^fine]: Section 21A(3) gives the Board a graduated set of punishments for a member found guilty under the First Schedule — reprimand, removal of the name from the Register for a period, or a fine, alone or in combination. Check the current sub-section before relying on any figure — the amounts have been amended over time.