ICAI vide its order dated 25.04.2024 held EY guilty. The order is reproduced below DISCIPLINARY COMMITTEE [BENCH-V (2024-2025)] [Constituted under Section 21B of the Chartered Accountants Act, 1949] ORDER UNDER SECTION 21B(3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007 ORDER UNDER SECTION 21B(3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007 In the matters of: M/s. S. R. Batliboi & Associates LLP (formerly known as S. R. Batliboi & Associates, FRN:101049W) (FRN:101049W/E300004) Kolkata in Re: …Respondent 1 M/s. S.R.B.C & Co., LLP (formerly known as S. R. Batliboi & Co., FRN: 324982E) (FRN: 324982E/E300003) in Re: …Respondent 2 M/s. S. R. Batliboi & Co., LLP (FRN: 301003E/E300005), Kolkata (Formerly known as S. R. Batliboi & Co., FRN: 301003E) in Re: Respondent 3 CA. Raj Kumar Agrawal (M. No. 082028) U 6 Green Park Extension, 2nd Floor, New Delhi 110 016 MEMBERS PRESENT: CA. Ranjeet Kumar Agarwal, Presiding Officer (Present in person) Smt. Anita Kapur, Government Nominee (Present through Video Conferencing Mode) Dr. K. Rajeswara Rao, Government Nominee (Present through Video Conferencing Mode) CA. Piyush S. Chhajed, Member (Present in person) CA. Gyan Chandra Misra, Member (Present in Person) Date of Final Hearing: 2nd April 2024 Date of Order : 25th April 2024 1. That vide findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 dated 22nd January 2024, the Disciplinary Committee was, inter-alia, of the opinion that CA. Raj Kumar Agrawal (M. No. 082028) (hereinafter referred to as the “Respondent”), who was identified as ‘member answerable’ by Respondent No. 1 to Respondent No. 3) was GUILTY of Professional Misconduct as under: Respondent No. 1 and Respondent No. 3 Professional Misconduct falling within the meaning of Items (2), (5) and (7) of Part-I of First Schedule and Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. Respondent No. 2 Professional Misconduct falling within the meaning of Items (5) and (7) of Part-I of First Schedule and Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. 2. That pursuant to the said findings, an action under Section 21B(3) of the Chartered Accountants Act, 1949 was contemplated against the Respondent and a communication was addressed to him thereby granting an opportunity of being heard in person/through video conferencing and to make representation before the Committee on 2nd April 2024. 3. The Committee noted that on the date of hearing held on 2nd April 2024, the Respondent was present through Video Conferencing Mode and made his verbal submissions on the findings of the Disciplinary Committee. The Committee also noted that the Respondent relied on his written representation(s). The Committee noted that the Respondent in his oral and written submissions apart from reiterating his preliminary objections which were earlier raised at the hearing stage had, inter-alia, submitted as under: a. The Respondent approached the Hon’ble High Court of Delhi vide Writ Petition [WP(C) 11665/ 2023] and stated that in similar matter bearing WP(C) 10998/ 2023, the Hon’ble Court has granted interim protection. Since, the Writ Petition is currently pending adjudication before Hon’ble High Court, the Respondent requested to defer the proceedings till such time the Writ Petition is pending. b. Findings are, inter alia, erroneous and suffer from the violation of principles of natural justice as having been issued in the absence of (i) access to relevant and relied upon documents. (ii) opportunity to cross examine witnesses, and (iii) opportunity to inspect the ICAl’s records pertaining to present matters. c. In the absence of any specific information or complaint within the ambit of the Chartered Accountants Act, 1949 and the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 (pertaining to the subject matter of the present matters), it is unclear as to how the Sukumar Judgment and/or the MNAF Report could form the basis of the present matters. d. The findings of the Committee of Experts (“COE”) Report is in favor of the Respondent and MNAFs in general ought to have been dealt with by the Disciplinary Committee in its Findings. e. The composition of the Disciplinary Committee for the purposes of issuance of order under Section 21(B)(3) of the Chartered Accountants Act, 1949 ought to remain the same as at the time of issuance of the findings. f. The Section 21C of the Chartered Accountants Act, 1949 does not empower the Disciplinary Committee to ask for additional documents from the Respondent at a belated stage in the matter and the Disciplinary Committee is required to follow the procedure as is specified under the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 as per Section 21B (2) of the Chartered Accountants Act, 1949. g. The present matters have been carried out in an arbitrary manner and in violation of the procedure prescribed under the Chartered Accountants Act, 1949 and the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 as well as principles of natural justice. h. Regarding the Item (7) of Part I of the First Schedule, the Disciplinary Committee has incorrectly interpreted the usage of email IDs to be covered with the items which are prohibited under CESURA recommendations or the Chartered Accountants Act, 1949,despite the fact the domain name has not been mentioned as prohibited item therein. Furthermore, disclosing affiliations with international entities on professional stationery is permissible and does not constitute advertising prohibited under the Chartered Accountants Act, 1949. Furthermore, the Respondent firm(s) had updated their email addresses and office locations well before the Prima Facie Opinion was issued, showcasing a proactive commitment to cooperate and
