86540
Lawyers Network
103860
Users
630
Cities Serving
114
Law Schools Network
59824
CHARTERED ACCOUNTANTS ACT, 1949
38 of 1949
An Act to make provision for the regulation of the profession of chartered accountants Whereas it is expedient to make provision for the regulation of the profession of chartered accountants and for that purpose to establish an Institute of Chartered Accountants: It is hereby enacted as follows :-
CHAPTER 01: PRELIMINARY
SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT
(1) This Act may be called the Chartered Accountants Act, 1949
(2) It extends to the whole of India
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf
SECTION 02: INTERPRETATION
(1) In this Act, unless there is anything repugnant in the subject or context,
(a) "associate' means an associate member of the Institute;
(b) "chartered accountant" means a person who is a member of the Institute;
(c) "Council" means the Council of the Institute;
(d) "holder of a restricted certificate" means a person holding a permanent or temporary restricted certificate granted by a State Government under the Restricted Certificates Rules, 1932;
(e) "Institute" means the Institute of Chartered Accountants of India constituted under this Act;
(f) "prescribed" means prescribed by regulations made under this Act;
(g) "Register" means the Register of Members maintained under this. Act;
(h) "registered accountant" means any person who has been enrolled on the Register of
Accountants maintained by the Central Government under the Auditors' Certificates Rules, 1932;
(i) "year" means the period commencing on the 1st day of April of any year and ending on the 31st day of March of the succeeding year
(2) A member of the Institute shall be deemed, "to be in practice", when individually or in partnership with chartered accountants in practice, he, in consideration of remuneration received or to be received,-
(i) engages himself in the practice of accountancy; or
(ii) offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts, or records or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an accountant; or
(iii) renders professional services or assistance in or about matters of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data; or
(iv) renders such other services as, in the opinion of the Council, are or may be rendered by a chartered accountant in practice, and the words "to be in practice" with their grammatical variations and cognate expressions shall be construed accordingly.
CHAPTER 02: THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
SECTION 03: INCORPORATION OF THE INSTITUTE
(1) All persons whose names are entered in the Register at the commencement of this Act and all persons who may hereafter have their names entered in the Register under the provisions of this Act, so long as they continue to have their names borne on the said Register, are hereby constituted a body corporate by the name of the Institute of Chartered Accountants of India, and all such persons shall be known as members of the Institute
(2) The Institute shall have perpetual succession and a common seal and shall have power to acquire, hold and dispose of property, both movable and immovable, and shall by its name sue or be sued
SECTION 04: ENTRY OF NAMES IN THE REGISTER
(1) Any of the following persons shall be entitled to have his name entered in the Register, namely :-
(i) any person who is a registered accountant or a holder of a restricted certificate at the
commencement of this Act;
(ii) any person who has passed such examination and completed such training as may be
prescribed for members of the Institute;
(iii) any person who has passed the examination for the Government Diploma in Accountancy or an examination recognised as equivalent thereto by the rules for the award of the Government Diploma in Accountancy before the commencement of this Act, and who, although not duly qualified to be registered as an accountant under the Auditors' Certificates Rules, 1932, fulfils such conditions as the Central Government may specify in this behalf;
(iv) any person who, at the commencement of this Act, is engaged in the practice of accountancy in any Part B State and who, although not possessing the requisite qualifications to be registered as an accountant under the Auditors' Certificates Rules, 1932, fulfils such conditions as the Central Government may specify in this behalf;
(v) any person who has passed such other examination and completed such other training without India as is recognised by the Central Government or the Council as being equivalent to the examination and training prescribed for members of the Institute : Provided that in the case of any person who is not permanently residing in India, the Central Government or the Council, as the case may be, may impose such further conditions as it may deem fit;
(vi) any person domiciled in India, who at the commencement of this Act is studying for any foreign examination and is at the same time undergoing training, whether within or without India, or, who, having passed such foreign examination, is at the commencement of this Act undergoing training, whether within or without India : Provided that any such examination or training was recognised before the commencement of this Act for the purpose of conferring the right to be registered as an accountant under the Auditor's Certificates Rules, 1932, and provided further that such person passes the examination or completes the training within five years after the commencement of this Act
(2) Every person belonging to the class mentioned in clause (i) of sub-section (1) shall have his name entered in the Register without the payment of any entrance fee
(3) Every person belonging to any of the classes mentioned in clauses (ii), (iii),(iv), (v) and (vi) of sub-section (1) shall have his name entered in the Register on application being made and granted in the prescribed manner and on payment of the prescribed fee, which shall not exceed rupees three hundred in any case.
(4) The Central Government shall take such steps as may be necessary for the purpose of having the names of all persons belonging to the class mentioned in clause (i) of sub-section (1) entered in the Register
SECTION 05: FELLOWS AND ASSOCIATES
(1) The members of the Institute shall be divided into two classes designated respectively as associates and fellows
(2) Any person shall, on his name, being entered in the Register, be deemed to have become an associate member of the Institute and be entitled to use the letters A.C.A. after his name to indicate that he is an associate member of the Institute of Chartered Accountants
(3) A member, being an associate who has been in continuous practice in India for at least five years, whether before or after the commencement of this Act,or whether partly before and partly after the commencement of this Act, and a member who has been an associate for a continuous period of not less than five years and who possesses such qualifications as the Council may prescribe with a view to ensuring that he has experience equivalent to the experience normally acquired as a result of' continuous practice for a period of five years as a chartered accountant shall, on payment of the prescribed entrance fee, which shall not exceed rupees two hundred in any case, and on application made and granted in the prescribed manner, be entered in the Register as a fellow of the Institute and shall be entitled to use the letters F.C.A. after his name to indicate that he is a fellow of the Institute of Chartered Accountants
SECTION 06: CERTIFICATE OF PRACTICE
(1) No member of the Institute shall be entitled to practise whether in India or elsewhere unless he has obtained from the Council a certificate of practice
(2) Every such member shall pay such annual fee for his certificate as may be prescribed, and such fee shall be payable on or before the 1st day of April in each year
SECTION 07: MEMBERS TO BE KNOWN AS CHARTERED ACCOUNTANTS
Every member of the Institute in practice shall, and any other member may, use the designation of a chartered accountant and no member using such designation shall use any other description, whether in addition thereto or in substitution therefor: Provided that nothing contained in this section shall be deemed to prohibit any such person from adding any other description or letters to his name, if entitled thereto, to indicate membership of such other Institute of Accountancy, whether in India or elsewhere, as may be recognised in this behalf by the Council, or any other qualification that he may possess, or to prohibit a firm, all the partners of which are members of the Institute and in practice, from being known by its firm name as Chartered Accountants
SECTION 08: DISABILITIES
Notwithstanding anything contained in section 4-, a person shall not be entitled to have his name entered in or borne on the Register if he-
(i)has not attained the age of twenty-one years at the time of his application for the entry of his name in the Register; or
(ii) is of unsound mind and stands so adjudged by an competent court; or
(iii) is an undischarged insolvent; or
(iv) being a discharged insolvent, has not obtained from the Court a certificate stating that his insolvency was caused by misfortune without any misconduct on his part; or
(v) has been convicted by a competent Court whether within or without India, of an offence involving moral turpitude and punishable with transportation or imprisonment or of an offence, not of a technical nature, committed by him in his professional capacity unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, removed the disability; or
(vi) has been removed from membership of the Institute on being found on inquiry to have been guilty of professional or other misconduct : Provided that a person who has been removed from membership for a specified period, shall not be entitled to have his name entered in the Register until the expiry of such period
CHAPTER 03: COUNCIL OF THE INSTITUTE
SECTION 09: CONSTITUTION OF THE COUNCIL OF THE INSTITUTE
(1) There shall be a Council of the Institute for the management of the affairs of the Institute and for discharging the functions assigned to it under this Act.
(2) The Council shall be composed of the following persons, namely:-
(a) not more than twenty -four persons elected by members of the Institute from amongst the fellows of the Institute chosen in such manner and from such regional constituencies as may be specified in this behalf by the Central Government by notification in the Official Gazette; and
(b) six persons nominated by the Central Government.
SECTION 10: MODE OF ELECTION TO THE COUNCIL
(1) Elections under clause (a) of sub-section (2) of section 9-shall be conducted in the prescribed manner.
(2) Where any dispute arises regarding any such election, the matter shall be referred by the Council to a Tribunal appointed by the Central Government in this behalf and the decision of such Tribunal shall be final: Provided that no such reference shall be made except on an application made to the Council by an aggrieved party within thirty days from the date of the declaration of the result of the election.
(3) The expenses of the Tribunal shall be borne by the Council.
SECTION 11: NOMINATION IN DEFAULT OF ELECTION OR NOMINATION
If any body of persons referred to in section 9-fails to elect any of the members of the Council which it is empowered under that section to elect, the Central Government may nominate a person duly qualified to fill the vacancy, and any person so nominated shall be deemed to be a member of the Council as if he had been duly elected.
SECTION 12: PRESIDENT AND VICE --PRESIDENT
(1) The Council at its first meeting shall elect two of its members to be respectively the President and the Vice-President thereof, and so often as the office of the President or the Vice-President becomes vacant the Council shall choose another person to be the President or the Vice-President, as the case may be: Provided that on the first constitution of the Council a member of the Council nominated in this behalf by the Central Government shall discharge the functions of the President, until such time as a President is elected under the provisions of this sub-section.
(2) The President shall be the Chief Executive Authority of the Council.
(3) The President or the Vice-President shall hold office for a period of one year from the date on which he is chosen but so as not to extend beyond his term of office as a member of the Council, and, subject to his being a member of the Council at the relevant time, he shall be eligible for re-election.
(4) On the expiration of the duration of the Council, the President of the Council at the time of such expiration shall continue to hold office and discharge such administrative and other duties as may be prescribed until such time as a new President shall have been elected and shall have taken over charge of his duties.
SECTION 13: RESIGNATION OF MEMBERSHIP AND CASUAL VACANCIES
(1) Any member of the Council may at any time resign his membership by writing under his hand addressed to the President, and the seat of such member shall become vacant when such resignation is notified in the Official Gazette.
(2) A member of the. Council shall be deemed to have vacated his seat if he is declared by the Council to have been absent without sufficient excuse from three consecutive meetings of the Council, or if his name is, for any cause, removed from the Register under the provisions of section 20-.
(3) A casual vacancy in the Council shall be filled by fresh election from the constituency concerned or by nomination by the Central Government, as the case may be, and the person elected or nominated to fill the vacancy shall hold office until the dissolution of the Council:
Provided that no election shall be held to fill a casual vacancy occurring within six months prior to the date of the expiration of the duration of the Council, but such a vacancy may be filled by nomination by the Central Government after consultation with the President of the Council.
(4) No act done by the Council shall be called in question on the ground merely of the existence of any vacancy in, or defect in the constitution of, the Council.
SECTION 14: DURATION AND DISSOLUTION OF COUNCIL
(1) The duration of any Council constituted under this Act shall be three years from the date of its first meeting, on the expiry of which it shall stand dissolved and a new Council constituted in accordance with the provisions of this Act.
(2) Notwithstanding the expiration of the duration of a Council (hereinafter referred to as the former Council), the former Council shall continue to exercise its functions until a new Council is constituted in accordance with the provisions of this Act, and on such constitution, the former Council shall stand dissolved.
SECTION 15: FUNCTIONS OF THE COUNCIL
(1) The duty of carrying out the provisions of this Act shall be vested in the Council.
(2) In particular, and without prejudice to the generality of the foregoing power, the duties of the Council shall include -
(a) the examination of candidates for enrolment and the prescribing of fees therefor;
(b) the regulation of the engagement and training of article and audit clerks;
(c) the prescribing of qualifications for entry in the Register;
(d) the recognition of foreign qualifications and training for purposes of enrolment;
(e) the granting or refusal of certificates of practice under this Act;
(f) the maintenance and publication of a Register of persons qualified to practise chartered accountants;
(g) the levy and collection of fees from members, examinees and other persons;
(h) the removal of names from the Register and the restoration to the Register of names which have been removed;
(i) the regulation, and maintenance of the status and standard of professional qualifications of members of the Institute;
(j) the carrying out, by financial assistance to persons other than members of the Council or in any other manner, of research in accountancy;
(k) the maintenance of a library and publication of books and periodicals relating to accountancy; and
(l) the exercise of disciplinary powers conferred by this Act.
SECTION 16: STAFF, REMUNERATION AND ALLOWANCES
(1) For the efficient performance of its duties, the Council may-
(a) appoint a Secretary who may also, if so decided by the Council, act as Treasurer;
(b) appoint such other officers and servants as it deems necessary;
(c) require and take from the Secretary or from any other officer or servant of the Council such security for the due performance of his duties, as the Council considers necessary;
(d) fix the salaries, fees, allowances and other conditions of service of the officers and servants of the Council;
( e) with the previous sanction of the Central Government, fix the allowances of the President, Vice-President and other members of the Council and members of its committees.
(2) Notwithstanding anything contained in sub-section (1), on the first constitution of the Council the Secretary shall be a person appointed by the Central Government in consultation with the Council, and he shall hold office during the pleasure of the Central Government, but so as not to exceed a period of three years from the date of his appointment.
(3) The Secretary of the Council shall be entitled to participate in the meetings of the Council but shall not be entitled to vote thereat.
SECTION 17: COMMITTEES OF THE COUNCIL
(1) The Council shall constitute from amongst its members the following Standing Committees, namely :-
(i) an Executive Committee,
(ii) an Examination Committee, and
(iii) a Disciplinary Committee.
(2) The Council may also form such other committees from amongst its members as it deems necessary for the purpose of carrying out the provisions of this Act, and any committee so formed may, with the sanction of the Council, co-opt such other members of the Institute not exceeding two-thirds of the members of the committee as the committee thinks fit, and any member so coopted shall be entitled to exercise all the rights of a member of the committee.
(3) Each of the Standing Committees shall consists of the President and the Vice-President, exofficio, and three other members of the Council elected by the Council: Provided that in the case of the Disciplinary Committee, out of the members to be elected, two shall be elected by the Council, and the third nominated by the Central Government from amongst the persons nominated to the Council by the Central Government.
(4) The President and the Vice-President of the Council shall be the Chairman and Vice-Chairman respectively of each of the Standing Committees.
(5) Every member of the Standing Committee other than the Chairman and the Vice-Chairman shall hold office for one year from the date of his election, but subject to being a member of the Council, he shall be eligible for re-election.
(6) The Standing Committee shall exercise such functions and be subject to such conditions in the exercise thereof as may be prescribed.
SECTION 18: FINANCES OF THE COUNCIL
(1) There shall be established a fund under the management and control of the Council into which shall be paid all moneys received by the Council and out of which shall be met all expenses and liabilities properly incurred by the Council.
(2) The Council may invest any money for the time being standing to the credit of the fund in any Government security or in any other security approved by the Central Government.
(3) The Council shall keep proper accounts of the fund distinguishing capital from revenue.
(4) The annual accounts of the Council shall be subject to audit by a chartered accountant in practice to be appointed annually by the Council : Provided that no member of the Council or a person who is in partnership with such member shall be eligible for appointment as an auditor under this sub-section.
(5) As soon as may be practicable at the end of each year, but not later than the 30th day of September, of the year next following, the Council shall cause to be published in the Gazette of India a copy of the audited accounts and the Report of the Council for that year, and copies of the said accounts and Report shall be forwarded to the Central Government and to all the members of the Institute.
(6) The Council may borrow from a scheduled bank, as defined in the Reserve Bank of India Act, 1934 (2 of 1934)-or from the Central Government -
(a) any money required for meeting its liabilities on capital account on the security of the fund or on the security of any other assets for the time being belonging to it, or
(b) for the purpose of meeting current liabilities pending the receipt of income by way of temporary loan or overdr aft.
CHAPTER 04: REGISTER OF MEMBERS
SECTION 19: REGISTER
(1) The Council shall maintain in the prescribed manner a Register of the Members of the
Institute.
(2) The Register shall include the following particulars about every member of the Institute, namely, -
(a) his full name, date of birth, domicile, residential and professional addresses;
(b) the date on which his name is entered in the Register;
(c) his qualifications;
(d) whether he holds a certificate of practice; and
(e) any other particulars which may be prescribed.
(3) The Council shall cause to be published in such manner as may be prescribed, a list of members of the Institute as on the 1st day of April of each year, and shall, if requested to do so by any such member, send to him a copy of such list.
(4) Every member of the Institute shall, on his name being entered in the Register, pay such annual membership fee differing in amount according as he is an associate or a fellow of the Institute, as may be prescribed.
SECTION 20: REMOVAL FROM THE REGISTER
(1) The Council may remove from the Register the name of any member of the Institute-
(a) who is dead; or
(b) from whom a request has been received to that effect; or
86540
103860
630
114
59824