--- title: A sand-mining scam probe found a chartered accountant holding stakes in three mining firms. None of the three ever ran. description: A chartered accountant holding a practice certificate took a profit share in three mining firms without Council permission. The mines never ran; the Register lost the name for a month. case_number: BOD 751/2024 file_number: PR/G/45/2019/DD/272/2019/BOD/751/2024 forum: board-of-discipline institute: icai decided_on: 2025-12-08 punished_on: 2025-12-30 outcome: Removal clauses: Item (4) of Part I of the First Schedule; Item (11) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/01/24.-BOD-751-2024.pdf published: 2026-09-07 author: Jainam Shah keywords: bod 751 2024, item 4 part i first schedule, item 11 part i first schedule, partnership with a non-member, engaging in other business or occupation, certificate of practice regulation 190a, punjab sand mining auction scam, board of discipline removal from register source: /icai/board-of-discipline/bod-751-2024 --- # A sand-mining scam probe found a chartered accountant holding stakes in three mining firms. None of the three ever ran. An income-tax investigation officer was looking into a sand-mining auction scam in Punjab when a chartered accountant's name surfaced in the paperwork, not as an auditor but as a partner.[^parties] The firms in question had nothing to do with accountancy. ## What happened ```timeline Punjab auctions three sand mines under a new progressive-bidding policy. Three winning bidders pay crore-scale first instalments, and investigators later find their declared incomes could never have covered bids of that size. Tracing the money, investigators find that the earnest money for the bids came from the personal account of one partner of a Gurugram chartered accountancy firm. A second partner in that same firm is found holding a stake in three newly formed partnerships, each set up to carry on mining and related business. The accountant holds a full-time certificate of practice throughout, and continues attestation work, while named as a partner in the three mining firms with a profit share in each. None of the firms ever opens a bank account, starts operations, or is granted a mining licence. An income-tax investigation officer complains to ICAI, alleging five separate violations tied to the scam. The screening stage clears three of them and confines the case to the accountant's own partnerships and outside business, leaving out the broader conspiracy allegations entirely. The Board hears the case, rejects a procedural challenge to how the complaint reached it, and finds the two remaining charges made out. It orders the accountant's name removed from the Register for a month. ``` Two details never made it into the timeline. The three firms — set up around the mining business — were formed on a single day, 10th June 2017, and each partnership deed named the accountant a partner with a 3% share of profits (para 15). And the accountant's own defence conceded the point that decided the case: the certificate of practice was never surrendered, and no permission to hold outside business interests was ever sought from the Institute (para 16). ## The two clauses Both sit in Part I of the First Schedule to the Chartered Accountants Act, 1949, which is why the Board of Discipline heard the matter rather than the Disciplinary Committee.[^forum] - **Item (4) of Part I** — a chartered accountant in practice cannot enter into partnership with anyone who is not a chartered accountant in practice, or a member of another professional body the Council recognises for that purpose.[^item4] Mining partners are neither. - **Item (11) of Part I** — a member holding a certificate of practice cannot take up any business or occupation other than chartered accountancy, unless the Council has first given permission.[^item11] Running mines is not accountancy. Three further charges — taking a share of another person's professional fees, accepting a company audit without checking the appointment was valid, and charging a contingency fee — were dropped at the screening stage before anyone had to answer them (para 14). A separate allegation of "other misconduct", over the timing of the partnership deeds, reached the Board's own prima facie opinion but was dropped by the Board itself, on the ground that it had never been part of the original complaint (para 19). ## What the respondent said The defence on the surviving charges was that nothing had actually happened. The mining partnerships were meant to lead somewhere — a licence, a bank account, operations — and the plan was to surrender the certificate of practice once that materialised. None of it did. No mine was worked, no account opened, and the partnership deeds, on this account, did no more than name working partners to handle activities that never began. Signing a deed, the argument ran, is not the same as engaging in a business (para 11). A separate, procedural argument ran alongside it: the complaint that reached the Directorate in 2019 had never carried the authorisation an officer of Joint Secretary rank is required to give, the Directorate accepted a second, defective version of it anyway, and the whole proceeding was built on that irregular foundation (para 8-10). ## What the Board held On the procedural point, the Board found the record did not support the challenge. The complaint that was actually acted upon — dated 22nd August 2019 — carried authorisation from the Principal Director of Income Tax (Investigation), given on 19th August 2019, exactly as Rule 3(2) requires. The earlier, unauthorised complaint was void from the outset; the later one was the one properly before the Directorate (para 18). On the substance, the Board treated non-performance as no defence at all: > The fact that the firm did not actually start business or operate bank accounts does not > remove the violation of Item (11) of Part-I of the First Schedule as the act of joining a > business partnership itself constitutes a breach of professional conduct (para 17) The same reasoning carried Item (4): the accountant had, in fact, entered into partnership with people who were not chartered accountants, and the clause asks nothing further than that. Regulation 190A requires the Council's permission in advance, and none had been sought — not when the deeds were signed, and not afterwards (para 16-17). ## The order > the Board hereby resolves to remove the name of [the Respondent] from the Register of > Members for a period of one (1) month.[^order-bracket] Removal from the Register is the middle rung of the Board's punishment scale — heavier than a reprimand or a fine, but for a fixed period, not permanent.[^removal] At the hearing on punishment, the accountant asked the Board to take a sympathetic view and promised not to repeat the conduct.[^timeline] The same three-member Board signed both the findings and the punishment order.[^coram] ## Why it matters *This section is ours, not the Board's.* **A certificate of practice follows you into every partnership deed you sign, not only your accountancy work.** These mining firms never opened a bank account, and that made no difference — the violation was complete the day the deeds were signed. Get the Council's permission before you sign anything that puts you in a non-accountancy business, not after. **"It never actually started" is not a defence once you have joined it.** Item (11) asks whether you took up the business, not whether the business took off. Treat every partnership deed as live from the date of signature. **A defective complaint can be cured by a later, properly authorised one.** The original complaint here was void for want of authorisation, but the Directorate's second attempt supplied it, and the case proceeded on that basis regardless of how long the first version had sat unresolved. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *Ms. Hena Kumar Sukhna, IRS*, Assistant Director of Income Tax (Investigation), Mohali/Chandigarh, was the complainant. *CA. Surinder Kumar (M. No. 070405)*, a partner of *M/s. Kansai Singla & Associates (FRN 003897N)*, Gurugram, was the respondent. [^item4]: Item (4) of Part I of the First Schedule bars a chartered accountant in practice from entering into partnership with anyone who is not a chartered accountant in practice, or a member of another professional body the Council has recognised for that purpose. [^item11]: Item (11) of Part I of the First Schedule bars a member holding a certificate of practice from engaging in any business or occupation other than the profession of chartered accountancy, unless the Council has given permission in advance. Regulation 190A of the Chartered Accountants Regulations, 1988 sets out how that permission is sought. [^forum]: First Schedule matters go to the Board of Discipline; Second Schedule matters, and matters falling under both, go to the Disciplinary Committee. The two carry very different punishment ceilings. [^removal]: Section 21A(3) gives the Board a graduated set of punishments: a reprimand, a fine, or removal of the member's name from the Register for a period it fixes. Removal for a limited period sits above a fine on that scale; only a much longer or permanent removal goes further. [^timeline]: The Director (Discipline)'s prima facie opinion was recorded on 4th July 2024, accepted by the Board at its 324th meeting on 25th September 2024. A hearing listed for 19th August 2025 was adjourned at the respondent's request; the matter was heard and concluded on 27th October 2025. The findings were signed 8th December 2025, and punishment was passed, after a hearing the respondent attended by video conference, on 30th December 2025. [^order-bracket]: The order's operative line names the respondent in full; the quotation above substitutes "[the Respondent]" for that name. Nothing else in the quoted text was altered. [^coram]: CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty (Government Nominee) and CA. Priti Savla (Member) signed both the findings and the punishment order.