Enjoy SmartLeges Premium!

Subscribe to SmartLeges Premium and enjoy the following advantages:

  • Consult as many laws as you need with no additional charge
  • Consult almost any law in several countries with the new advanced search engine. All legislation within reach!
  • Enjoy all SmartLeges functions without restrictions
See the plans

An essential and free application for professionals and students in the legal sector

Read more
 

Sign up for free!

Would you like to consult this and other laws complete?

Sign up for free to consult all the laws of SmartLeges in your mobile phone or tablet, as well as underline text, add notes...

Sign up for free!

Share this law Other laws of India
Email Facebook Twitter Google Linkedin Tumblr

CHARTERED ACCOUNTANTS ACT

Ministry of Law and Justice

Act nº 38 of 1949


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V. Misconduct
  • Chapter VI
  • Chapter VII
  • Chapter VIIA. Quality Review Board
  • Chapter VIII
  • Schedules
  • Act nº 38 of 1949

Preamble

THE CHARTERED ACCOUNTANTS ACT, 1949

[Act, No. 38 of 1949]

[1st May, 1949]

PREAMBLE

An Act to make provision for the regulation of the1[profession of chartered accountants].

WHEREAS it is expedient to make provision for the regulation of the1[profession of chartered accountants] and for that purpose to establish an Institute of Chartered Accountants; It is hereby enacted as follows:--

1. Substituted for "profession of accountants" by the Chartered Accountants (Amendment) Act, 1959 (15 of 1959), Section 2 (1-7-1959).


Chapter I

Section 1. Short title, extent and commencement

(1) This Act may be called the Chartered Accountants Act, 1949.

1[(2) It extends to the whole of India2[* * * *].]

(3) It shall come into force on such date3as the Central Government may, by notification in the Official Gazette, appoint in this behalf.

1. Substituted for sub-section (2) by A. L.O., 1950.

2. Words "except the State of Jammu and Kashmir" omitted by Central Laws (Extension to Jammu and Kashmir) Act, (25 of 1968), S. 2 and Sch, (15-8-1968).

3. The Act came into force on 1-7-1949--


Section 2. Interpretation

(1) In this Act, unless there is anything repugnant in the subject or context,--

(a) "associate" means an associate member of the Institute;

5[(aa) "Authority" means the Appellate Authority constituted under section 22A;

(aaa) "Board" means the Quality Review Board constituted under section 28A;]

(b) "chartered accountant" means a person who is a member of the Institute1[* * *];

(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 by2[State] Government under the Restricted Certificates Rules, 1932;

(e) "Institute" means the Institute of Chartered Accountants of India constituted under this Act;

5[(ea) "notification" means a notification published in the Official Gazette;]

(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 Auditor's Certificates Rules, 1932;

5[(ha) "specified" means specified by rules made by the Central Government under this Act;

(hb) "Tribunal" means a Tribunal established under sub-section (1) of section 10B;]

(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 accountants3[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 accountant3[in practice];

and the words "to be in practice" with their grammatical variations and cognate expressions shall be construed accordingly.

Explanation.--An associate or a fellow of the Institute who is a salaried employee of a chartered accountant4[in practice] or3[a firm of such chartered accountants]4[in practice] shall, notwithstanding such employment, be deemed to be in practice for the limited purpose of the 6[training of articled assistants].

1. Words "and who is in practice" omitted by Chartered Accountants (Amendment) Act (15 of 1959), Section 3 (w.e.f. 1-7-1959).

2. Substituted for the word "Provincial", by A. L. O. 1950.

3. Substituted for the words "a firm of chartered accountants", by Chartered Accountants (Amendment) Act (15 of 1959), Section 3 (w.e.f. 1-7-1959).

4. Inserted, by Chartered Accountants (Amendment) Act (15 of 1959), Section 3 (w.e.f. 1-7-1959).

5. Inserted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006.

6. Substituted for the words "training of articled clerks" by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006.


Chapter II

Section 3. 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 immoveable, and shall by its name sue or be sued.

Section 4. 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 for 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 the1[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;

2[(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 Auditors' 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[(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 such fees, as may be determined, by notification, by the Council, which shall not exceed rupees three thousand:

Provided that the Council may, with the prior approval of the Central Government, determine the fee exceeding rupees three thousand, which shall not in any case exceed rupees six thousand.]

(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.

1. Substituted for the words "acceding States" by A. L. O. 1950.

2. Substituted by the Chartered Accountants (Amendment) Act, 1955 (40 of 1955), Section 2 (21-10-1955).

3. Substituted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006. Prior to substitution, it read as under:-

"(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."


Section 5. 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.

2[(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 such fees, as may be determined, by notification, by the Council, which shall not exceed rupees five thousand 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:

Provided that the Council may with the prior approval of the Central Government, determine the fee exceeding rupees five thousand, which shall not in any case exceed rupees ten thousand.]

1. Substituted by the Chartered Accountants (Amendment) Act (15 of 1959), S. 4 (1-7-1959).

2. Substituted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006. Prior to substitution, it read as under:-

"1(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 6. Certificate of practice

(1) No member of the Institute shall be entitled to practise1[whether in India or elsewhere] unless he has obtained from the Council a certificate of practice :

3[(2) Every such member shall pay such annual fee for his certificate as may be determined, by notification, by the Council, which shall not exceed rupees three thousand, and such fee shall be payable on or before the 1st day of April in each year:

Provided that the Council may with the prior approval of the Central Government, determine the fee exceeding rupees three thousand, which shall not in any case exceed rupees six thousand.]

4[(3) The certificate of practice obtained under sub-section (1) may be cancelled by the Council under such circumstances as may be prescribed.]

1. Inserted by the Chartered Accountants (Amendment) Act, 1959 (15 of 1959), S.

2. Substituted for sub-section (2), by the Chartered Accountants (Amendment) Act, 1959 (15 of 1959), S.

3. Substituted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006. Prior to substitution, it read as under:-

"2(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."

4. Inserted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006.


Section 7. Members to be known as Chartered Accountants

1[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.

1. Substituted by the Chartered Accountants (Amendment) Act, 1959 (13 of 1959), S. 6 (1-7-1959).


Section 8. 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

1[(ii) is of unsound mind and stands so adjudged by a 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

2[(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.]

1. Substituted by the Chartered Accountants (Amendment) Act, (15 of 1959), Section 7 (1-7-1959).

2. Substituted, by the Chartered Accountants (Amendment) Act, (15 of 1959), Section 7 (1-7-1959).


Chapter III

Section 9. 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.

3[(2) The Council shall be composed of the following persons, namely:-

(a) not more than thirty-two persons elected by the members of the Institute from amongst the fellows of the Institute chosen in such manner and from such regional constituencies as may be specified:

Provided that a fellow of the Institute, who has been found guilty of any professional or other misconduct and whose name is removed from the Register or has been awarded penalty of fine, shall not be eligible to contest the election,-

(i) in case of misconduct falling under the First Schedule of this Act, for a period of three years;

(ii) in case of misconduct falling under the Second Schedule of this Act, for a period of six years,

from the completion of the period of removal of name from the Register or payment of fine, as the case may be;

(b) not more than eight persons to be nominated in the specified manner, by the Central Government.]

4[(3) No person holding a post under the Central Government or a State Government shall be eligible for election to the Council under clause (a) of sub-section (2).

(4) No person who has been auditor of the Institute shall be eligible for election to the Council under clause (a) of sub-section (2), for a period of three years after he ceases to be an auditor.]

1. Substituted for the words "persons elected by members of the Institute" by the Chartered Accountants (Amendment) Act (15 of 1959). S. 8 (1-7-1959).

2. Substituted for the words "five persons". by members of the Institute" by the Chartered Accountants (Amendment) Act (15 of 1959). S. 8 (1-7-1959).

3. Substituted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006. Prior to substitution, it read as under:-

"(2) The Council shall be composed of the following persons, namely :--

(a)1[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)2[six persons] nominated by the Central Government."

4. Inserted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006.


Section 10. Re-election or re-nomination to Council

2[10. Re-election or re-nomination to Council.--

A member of the Council, elected or nominated under sub-section (2) of section 9, shall be eligible for re-election or, as the case may be, renomination:

Provided that no member shall hold the office for more than three consecutive terms:

Provided further that a member of the Council, who is or has been elected as President under sub-section (1) of section 12, shall not be eligible for election or nomination as a member of the Council.]

1. Substituted by the Chartered Accountants (Amendment) Act 1959 (15 of 1959), Section 9 (1-7-1959).

2. Substituted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006. Prior to substitution, it read as under:-

"110. 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 10A. Settlement of Dispute Regarding Election

1[10A. Settlement of Dispute Regarding Election.--

In case of any dispute regarding any election under clause (a) of sub-section (2) of section 9, the aggrieved person may make an application within thirty days from the date of declaration of the result of election to the Secretary of the Institute, who shall forward the same to the Central Government.

1. Inserted by the Chartered Accountants (Amendment) Act, 2006, dated 22nd March, 2006.