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BOD 733/2024Not guilty

An incoming internal auditor kept no tracking slip for a No Objection letter. A postal record settled it.

6 min readJainam Shah

An incoming internal auditor was accused of skipping the required written communication with his predecessor. A postal department record of when the letter was booked was enough to clear him.

Held
Not guiltyThe charge was not made out
Forum
Board of Discipline (First Schedule)
Clauses
Item (8) of Part I of the First Schedule
Decided
File no.
PR/394/2018/DD/41/2019/BOD/733/2024
Source
Original order (PDF)

An industry association changes its internal auditor for a new financial year. The auditor who lost the assignment complains that his successor never wrote to him first, as the rules require.1

What happened#

An industry association appoints an internal auditor for one financial year. For the year that follows, it appoints someone else instead.
The outgoing auditor complains to the Institute that his successor took on the assignment without ever writing to him first, as the rules on replacing another member's engagement require.
Years pass before the matter reaches a final hearing. The complainant tells the Board by email that he cannot attend and has nothing further to add, and asks it to decide on what he has already filed.
The incoming auditor appears in person with counsel. He has no tracking slip for the letter he says he sent, but produces a reply from the post office confirming that a registered article was booked in his name on the very day he received his letter of appointment.
The Board treats that confirmation as sufficient proof that the required communication was made, and closes the case without a finding of misconduct.

Two details carried the case. The postal article had been booked on the same day the respondent received his letter of appointment — the day, on his account, that he sent the outgoing auditor a registered letter seeking a No Objection (para 7). And the respondent had already placed a copy of that acknowledgement before the Institute's own Directorate roughly four and a half years before this hearing, well before the complaint could have prompted him to manufacture one (para 4.2).

What he could not produce was the tracking history itself. He told the Board that such sheets are not downloaded for every letter sent, and that the postal department had told him online tracking records are kept only for a limited period before removal (para 4.1). By the time anyone asked, the underlying record had already been destroyed — the Post Office's own reply said the relevant record had been "weeded out" more than two and a half years before the hearing, leaving only the booking date on file (para 6).

The charge#

  • Item (8) of Part I of the First Schedule — accepting a position as auditor previously held by another member, without first communicating with that member in writing.2

The complaint raised only this one allegation, and the Board's findings address nothing else.

What the respondent said#

He did not deny that no tracking sheet could be produced. His explanation was that such sheets are not routinely downloaded and that the postal department only retains its own online tracking data for a limited time (para 4.1).

He pointed instead to timing already on record: he had submitted the acknowledgement in question to the Directorate roughly four and a half years before this hearing. Had anyone questioned it back then, he said, he would still have been able to obtain the tracking sheet — the gap was not of his making (para 4.2).

What the Board held#

The respondent appeared with counsel and produced a letter from the Postmaster, Karol Bagh Post Office, New Delhi, replying to his own enquiry about the article number on the registered letter he said he had sent. The relevant part read:

the article No. RD18803O173IN was booked on 04.08.2018. As per your request /letter it is intimated that the relevant record has been weeded out up to 31.03.2020 on dated 04.10.2021. (para 6)

Asked directly when the communication had been sent, the respondent's counsel confirmed it was on 4th August 2018 — the same day the respondent received his own letter of appointment (para 7). The Board held:

the Respondent has sent the required communication to the Complainant for seeking No Objection by Registered Post with Acknowledgement Due and the same is also confirmed by the Postal Department (para 8)

The order#

Considering the facts of the matter as well as the sufficiency and validity of the evidence produced before the Board by the Respondent, the Board concludes that the Respondent is 'Not Guilty' of the alleged misconduct for the required communication mandate as per the Chartered Accountants Act 1949 (para 9)

No punishment follows a not-guilty finding. The Board ordered the complaint closed under Rule 15(2).3 The findings are three pages long and record nothing beyond this single question of communication.4

Why it matters#

This section is ours, not the Board's.

A booking date can outlive the record behind it. The post office had already destroyed the detail of what was sent, but its confirmation of the booking date, obtained years later, was enough for the Board. If you cannot keep the tracking history itself, at least keep something that fixes the date.

Send the communication the day you accept the appointment, not after. The date lined up exactly with the respondent's own letter of appointment, and that alignment is what made his account credible.

File your proof with the Institute while it is still easy to get. The respondent had already placed his acknowledgement before the Directorate years before this hearing. Producing it again later cost him nothing; producing it for the first time at a hearing might have cost him the case.

This summarises a public order and links the primary source. It is general information, not legal or professional advice.

Footnotes#

  1. CA. Sukumar Datta (M. No. 055016), Kolkata was the complainant, the Internal Auditor of the Institute of Indian Foundrymen for the 2017-18 financial year. CA. Deepak Gulati (M. No. 086403), Partner, M/s Deepak Gulati & Associates, Chartered Accountants, New Delhi was the respondent, appointed to the same assignment for the year that followed. ↩

  2. 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. ↩

  3. Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 — where the Board finds a member not guilty, it records the finding and orders the complaint closed. There is no punishment hearing. ↩

  4. CA. Rajendra Kumar P (Presiding Officer) and Ms. Dolly Chakrabarty, IAAS (Retd.) (Government Nominee), present in person, heard the matter at 'ICAI Bhawan', New Delhi on 7 May 2024. The findings do not state the date on which they were signed; this page uses 12 June 2024, the date on which the Institute certified them as a true copy, as the decided date. ↩

Written by Jainam Shah. Found guilty under Item (8) of Part I of the First Schedule; the Board ordered a not guilty. General information, not legal or professional advice — read the order itself before relying on it.

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