--- title: A Bharatpur auditor took over a colleague's tax client without writing first. A friendship stood in for the letter. description: A Bharatpur chartered accountant took over a client's tax audit from a colleague, and admitted never writing to him about it. The Board found him guilty and imposed a twenty-five-thousand-rupee fine. case_number: BOD 753/2024 file_number: PR/162/2023/DD/200/2023/BOD/753/2024 forum: board-of-discipline institute: icai decided_on: 2025-02-10 punished_on: 2025-07-29 outcome: Fine clauses: Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2025/08/10.-BOD-753-2024.pdf published: 2026-09-07 author: Jainam Shah keywords: bod 753 2024, item 8 part i first schedule, communication with previous auditor, no objection certificate tax audit, section 44ab tax audit, board of discipline fine source: /icai/board-of-discipline/bod-753-2024 --- # A Bharatpur auditor took over a colleague's tax client without writing first. A friendship stood in for the letter. Two Bharatpur chartered accountants knew each other well enough that, when a tax client moved from one to the other, neither thought a letter was necessary. The Board of Discipline disagreed.[^parties] ## What happened ```timeline A chartered accountant in Bharatpur completes a tax audit of a tyre trading business for one financial year. The following year, another Bharatpur chartered accountant takes on the tax audit of the same business, after the first auditor declines to continue the assignment. He does not write to the outgoing auditor first, and does not ask him for a no-objection certificate. The two men know each other personally, and the incoming auditor sees the client's approach after the outgoing auditor's refusal, together with that acquaintance, as reason enough to skip any formal communication. Years later the outgoing auditor complains to the Institute that he was never written to at all. When the matter comes up for hearing, he does not appear, and the case proceeds without him — on the incoming auditor's own account, given in person. That account amounts to an admission: no letter was ever sent. The Board treats the admission alone as enough to find him guilty, and later fines him for it. ``` There was no missing document to argue over here, only an admission. Put to the Board, the respondent did not deny that he had skipped the letter — he explained why he thought it unnecessary, and the explanation is what the Board rejected. ## The clause **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.[^item8] The audit in question was the tax audit under Section 44AB of the Income-tax Act, 1961, for the financial year 2016-17. The duty is to write, nothing more — it does not turn on whether the client had already left the outgoing auditor, or on how well the two accountants knew each other. The Board found the respondent guilty of exactly this: not writing. ## What the respondent said He did not dispute the facts. He admitted, before the Board, that he had not communicated in writing with the complainant about obtaining a no-objection certificate before taking on the audit.[^noc] His explanation was twofold: the client had already come to him after the complainant had declined to continue the work, and the two chartered accountants had a longstanding personal relationship that, in his view, made formal communication unnecessary (para 5). He also told the Board that he understood the requirement now and would follow it going forward (para 7). ## What the Board held The Board went straight to what the Code of Ethics requires, regardless of the relationship between the two members: > The Board considered the provisions of the Code of Ethics of ICAI, which clearly mandate > written communication with the previous auditor before accepting an audit assignment. This > procedure is essential to maintain professional decorum and ensure ethical compliance (para 6) The hearing went ahead without the complainant, who did not appear despite notice, but that made no difference to the outcome. The respondent's own account did the work: > the Respondent has admitted to the violation. Such admission, coupled with the absence of any > contradiction, establishes the Respondent's non-compliance with the ethical standards set > forth by the Institute (para 7) The Board concluded: > the Respondent is the Guilty of Professional Misconduct falling within the meaning of Item > (8) of Part-I of the First Schedule to the Chartered Accountants Act, 1949 (para 9) ## The order > the Board decided to impose a Fine of Rs.25,000/- (Rs. Twenty-Five Thousand only) upon him. A fine sits above a reprimand — the lightest punishment the Board can impose — on the scale set out in Section 21A(3).[^scale] The respondent appeared by video conference at the punishment hearing and confirmed he had received the findings; the fine followed at the same hearing, roughly six months after the findings were signed.[^coram] ## Why it matters *This section is ours, not the Board's.* **A personal relationship is not a communication.** The respondent's defence was, in effect, that he knew the outgoing auditor well enough to skip the letter. Item (8) does not carry an exception for acquaintance — write regardless of how well you know the member you are replacing. **A client declining to keep an auditor does not excuse the next one from writing.** The duty runs to the outgoing auditor, not to whether the client wanted a change. Send the letter even when the client tells you the previous auditor has already stepped back. **An admission is enough to convict, with or without the complainant in the room.** This hearing went ahead ex parte against the complainant, yet the respondent's own account was sufficient to find him guilty. Do not assume an absent complainant improves your odds — your own submission is evidence too. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *CA. Sunil Kumar (M. No. 075294)*, Bharatpur, was the complainant, the outgoing auditor who had carried out the tax audit of *M/s Arora Tyres* for financial year 2015-16. *CA. Rajendra Agrawal (M. No. 088531)*, of *Garg Rajendra and Company*, also Bharatpur, was the respondent, who took over the entity's tax audit the following year. [^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. [^noc]: A no-objection certificate is the outgoing auditor's written confirmation that they have no objection to the incoming auditor taking the assignment. It is the customary way the communication duty is evidenced in practice, though the clause itself requires only that the incoming auditor write — not that the outgoing auditor respond. [^scale]: Section 21A(3) gives the Board a graduated set of punishments: a reprimand, a fine, or removal of the name from the Register for a limited period. Check the current sub-section before relying on any figure — the amounts have been amended. [^coram]: The findings, dated 10 February 2025 after a hearing at ICAI Bhawan, Jodhpur, and the punishment order, passed on 29 July 2025, were both signed by CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty, IAAS (Retd.) (Government Nominee) and CA. Priti Savla (Member).