Chartered Accountants – Restrictions of ICAI on number of statutory tax audits
Mandatory Ceiling on the number of tax audits by a Chartered Accountant in a financial year under Section 44AB of the Income Tax Act, 1961.
Clause 6 of the Guidelines dated 8.8.2008 issued by the Institute of Chartered Accountants of India under the Chartered Accountants Act, 1949, provides that a member of the Institute shall not accept more than specified tax audit assignments in a financial year under Section 44AB of the IT Act, 1961. If there is breach, they are liable to disciplinary proceedings for misconduct.
Ceiling has been imposed only in respect of statutory audit reports since it form a class by themselves as they involve more time and effort and are significantly more onerous.
Whether the act of exceeding the numerical restrictions on statutory tax audits can be deemed to be “professional misconduct”
Right of the Chartered Accountant to practice any profession guaranteed under Article 19(1)(g) of the Constitution of India can be restricted by the ceiling on number of tax audits.
Judgment dated 17.5.2024 of the Supreme Court in Transferred Case (Civil) No.29 of 2021 in Shaji Poulose Vs. Institute of Chartered Accountants of India and others with connected matters.
