Clause 11 – Part I – First Schedule Flashcards
CA. A, a practicing CA, took over as the executive chairman of S IT Ltd on 01.04.2016.
However, realizing about obtaining prior approval from the Council of the ICAI for engaging into other business, he applied to the Council for permission within 10 days.
Specific Permission to be Obtained:
Provision:
–> As per Clause (11) of Part I of First Schedule to the CA Act, 1949, a CA in practice will be deemed to be guilty of professional misconduct if he -
engages in any business or occupation other than the profession of CA unless permitted by the Council so to engage.
–> However, the Council has granted general permission to the members to engage in certain specific occupation.
–> In respect of all other occupations specific permission of the Institute is necessary.
Analysis & Conclusion:
–> In the instant case, CA. A took over as the executive chairman on 01.04.2016 and applied for permission later.
–> Based on the given facts, he was engaged in other occupation, after 01.04.2016 and before the application for approval, without the permission of the Council.
–> Therefore, CA. A is guilty of professional misconduct in terms of Clause (11) of Part I of First Schedule to the CA Act, 1949.
S, a CA in practice is owner of three agriculture lands. He lost his father due to Covid Pandemic. After death of his father, he started carrying out agricultural activities. His neighbor R who is a farmer, filed a complaint against him to ICAI that being a member he is carrying out agricultural activities, therefore, he is liable for misconduct.
Engaging into Agricultural Activity:
Provision:
–> As per Clause (11 ) of Part I of First Schedule to the CA Act, 1949, a CA in practice will be deemed to be guilty of professional misconduct if he -
engages in any business or occupation other than the profession of CA unless permitted by the Council so to engage.
–> However, the Council has granted general permission to the members to engage in certain specific occupation.
–> In respect of all other occupations specific permission of the Institute is necessary.
Analysis & Conclusion:
–> In this case, CA. S is owner of 3 agriculture lands, and he is carrying out agricultural activities which is covered under the general permission.
–> Therefore, CA S is not guilty of professional misconduct under Clause (11) of Part I of First Schedule of CA Act, 1949 and complain of neighbor to the Institute is not correct.
CA. S is practicing since 2008 in the field of company auditing. Due to his good practical knowledge, he was offered editorship of a ‘Company Audit’ Journal which he accepted. However, he did not take any permission from the council regarding such editorship.
Engagement in other occupations:
Provision:
–> As per Clause (11 ) of Part I of First Schedule to the CA Act, 1949, a CA in practice will be deemed to be guilty of professional misconduct if he -
engages in any business or occupation other than the profession of CA unless permitted by the Council so to engage.
–> It does not prohibit a CA from being a director of a company, except MD or a WTD.
–> But if any of the partners is interested in such company as an auditor then he cannot be director of the said company.
–> General permission is granted under Regulation 190A for being appointed as editor of professional journal.
Analysis & Conclusion:
–> In the present case CA S has accepted the appointment as editor of a “Company Audit”, which is a professional journal.
–> Clause 11 permits editorship of professional journals, hence no misconduct arises on part of Mr. S
