--- title: An incoming auditor kept no copy of the communication letter. The client's sworn affidavit stood in for it. description: A tax audit changed hands, and years later the incoming auditor had no copy of the letter he said he sent. The client swore he had sent it, the complainant never denied that, and the charge failed. case_number: BOD 860/2026 file_number: PR/160/23/DD/198/2023/BOD/860/2026 forum: board-of-discipline institute: icai decided_on: 2026-07-27 outcome: Not guilty clauses: Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/08/13.-BOD-860-2026.pdf published: 2026-08-29 author: Jainam Shah keywords: bod 860 2026, item 8 part i first schedule, communication with previous auditor, no objection certificate tax audit, section 44ab tax audit, board of discipline not guilty source: /icai/board-of-discipline/bod-860-2026 --- # An incoming auditor kept no copy of the communication letter. The client's sworn affidavit stood in for it. A proprietorship in Bharatpur changed its tax auditor, and the auditor who lost the work complained that nobody had written to him.[^parties] Nearly ten years later, the man who took the audit could not produce the letter he said he had sent. ## What happened ```timeline A small agricultural-implements business in Bharatpur has its accounts audited. One chartered accountant signs off its financial statements for 2014-15. The following year the proprietor engages a different chartered accountant for the tax audit under Section 44AB. Before accepting, the incoming auditor asks the proprietor to obtain a no-objection certificate from the outgoing auditor, and gives him a letter addressed to that auditor to deliver. The outgoing auditor hands over some of the records but refuses to issue a no-objection certificate, on the ground that no rule obliges him to issue one. The audit goes ahead anyway. Years later the outgoing auditor complains to ICAI that he was never communicated with at all. By then the incoming auditor has shifted office several times and can produce neither his copy of the letter nor any proof that it was delivered. The proprietor swears an affidavit setting out what he was asked to do and what the outgoing auditor said. It is served on the complainant, who never answers it. The Board gives the respondent the benefit of the doubt and closes the case. ``` One document decided this. The proprietor's affidavit set out that the respondent had instructed him to deliver the letter to the previous auditor and to obtain the records and the certificate, and that the previous auditor had handed over records but declined the certificate. That affidavit was sent to the complainant — and, as the Board recorded, "has remained unrebutted by the Complainant" (para 5). The respondent had no paper of his own. No copy of the letter, no proof of posting, no acknowledgement — nearly ten years gone, and several office moves in between (para 6). ## 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 an audit that the other member already holds.[^item8] It is a duty to write, and nothing more: it does not require the outgoing auditor to consent, and it is not a rule about audit quality. That distinction runs through this case. **A no-objection certificate is the customary way the duty is discharged, not the duty itself.**[^noc] The outgoing auditor here refused to issue one, saying no statutory requirement obliged him to — and on that narrow point he was right. What he could not then do was treat the absent certificate as proof that nobody had written to him. The Board held the charge not established, and closed the case. ## What the respondent said The same account throughout, in his written statement and again at the hearing: before taking the assignment he asked the proprietor to get the no-objection certificate from the previous auditor, and he addressed a letter to the previous auditor which the proprietor was to carry across (para 5). As for the missing paperwork, the matter was very old, he had moved office more than once, and the records had not survived (para 6). ## What the Board held The Board began from what Item (8) actually asks. A finding of misconduct under it needs a clear conclusion that the incoming auditor accepted the assignment **without first communicating** — and in a disciplinary proceeding that conclusion has to rest on "cogent and reliable evidence" (para 7). Missing paper was not that evidence: > although the Respondent has been unable to produce a copy of the communication or proof of its > delivery after the lapse of nearly ten years, the absence of such documentary evidence, by > itself, cannot conclusively establish that no communication was made (para 6) Three things pointed the other way. The respondent's account had not changed. The proprietor's affidavit supported it and the complainant had let it stand unanswered. And there was no sign of bad faith anywhere in the file — no suggestion that the previous auditor had been deliberately bypassed, and no unpaid fees owing to him at the time the assignment was accepted (para 6). That left doubt, and the Board resolved it the way doubt is resolved: > the Respondent's consistent stand, supported by the Proprietor's affidavit and the surrounding > circumstances, creates sufficient doubt regarding the allegation. In these circumstances, the > benefit of doubt must be given to the Respondent (para 7) ## The order > The Respondent is, therefore, held Not Guilty of professional misconduct under the said > provision. No punishment stage follows a finding of not guilty. The Board ordered the case closed under Rule 15(2) and disposed of it.[^rule] It had taken a single hearing, three weeks before judgment was pronounced.[^coram] ## Why it matters *This section is ours, not the Board's.* **The clause asks you to write, not to collect a certificate.** The outgoing auditor's refusal to issue one does not stop you accepting the assignment, and holding one is not by itself proof that you communicated. Send the letter, and treat the certificate as a courtesy you may never receive. **Do not send it through the client.** The letter here travelled in the proprietor's hands, which is exactly why there was no receipt and nothing to produce a decade later. Send it yourself by a route that generates its own evidence. **Keep acceptance correspondence far longer than feels sensible.** The Board accepted that the records could not be preserved, but plausibility is a favour, not a right, and another Board on another day need not extend it. **An affidavit you leave unanswered will be read against you.** The proprietor's affidavit was served on the complainant and never rebutted, and that silence tipped a case with no documents in it. 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 audited the client for 2014-15. *CA. Pavan Kumar Mittal (M.No. 413648), Jaipur* was the respondent, the incoming auditor. The client was *M/s Satyam Agriculture Implements Works*, a proprietorship at Kumher Gate, Bharatpur, Rajasthan; its proprietor swore the affidavit dated 12 July 2023 that decided the case. [^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 the tax audit under Section 44AB of the Income-tax Act, 1961 for 2015-16. [^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 how the communication duty is usually evidenced in practice, but the clause imposes the obligation on the incoming auditor to communicate — it does not oblige the outgoing auditor to issue anything. The complainant here declined to issue one for exactly that reason, according to the proprietor's affidavit. [^rule]: 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 that finding and orders the complaint closed. There is no punishment hearing. [^coram]: CA. Babu Abraham Kallivayalil (Presiding Officer, in person), Ms. Dolly Chakrabarty, IAAS (Retd.) (Government Nominee, by video conference) and CA. Pankaj Shah (Member, in person). The matter was heard at ICAI Bhawan, Jaipur on 6 July 2026, with the respondent appearing in person, and judgment was pronounced on 27 July 2026.