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CHARTERED ACCOUNTANTS (AMENDMENT) ACT 2006

Ministry of Law and Justice

Act nº 9 of 2006


  • Schedules
  • Act nº 9 of 2006

Preamble

THE CHARTERED ACCOUNTANTS (AMENDMENT) ACT, 2006

[Act No. 9 of 2006]

[22nd March, 2006]

An Act further to amend the Chartered Accountants Act, 1949.

BE it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows:-

Section 1. Short title and commencement

(1) This Act may be called the Chartered Accountants (Amendment) Act, 2006.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:

Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.

Section 2. Amendment of section 2

In the Chartered Accountants Act, 1949 (38 of 1949) (hereinafter referred to as the principal Act), in section 2,-

(I) in sub-section (1), -

(i) after clause (a), the following clauses shall be inserted, namely:-

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

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

(ii) after clause (e), the following clause shall be inserted, namely:-

'(ea) "notification" means a notification published in the Official Gazette;';

(iii) after clause (h), the following clauses shall be inserted, namely:-

'(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;

(II) in sub-section (2), in the Explanation, for the words "training of articled clerks", the words "training of articled assistants" shall be substituted.

Section 3. Amendment of section 4

In section 4 of the principal Act, for sub-section (3), the following sub-section shall be substituted, namely: -

"(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.".

Section 4. Amendment of section 5

In section 5 of the principal Act, for sub-section (3), the following sub-section shall be substituted, namely:-

"(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.".

Section 5. Amendment of section 6

In section 6 of the principal Act,-

(i) for sub-section (2), the following sub-section shall be substituted, namely:-

"(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.";

(ii) after sub-section (2), the following sub-section shall be inserted, namely:-

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

Section 6. Amendment of section 9

In section 9 of the principal Act,-

(i) for sub-section (2), the following sub-section shall be substituted, namely:-

"(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.";

(ii) after sub-section (2), the following sub-sections shall be inserted, namely:-

"(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.".

Section 7. Substitution of new section for section 10

For section 10 of the principal Act, the following section shall be substituted, namely:-

"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.".

Section 8. Insertion of new sections 10A and 10B

After section 10 of the principal Act, the following sections shall be inserted, namely:-

"10A. Settlement of dispute regar- ding 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.

10B. Establishment of Tribunal.-(1) On receipt of any application under section 10A, the Central Government shall, by notification, establish a Tribunal consisting of a Presiding Officer and two other Members to decide such dispute and the decision of such Tribunal shall be final.

(2) A person shall not be qualified for appointment,-

(a) as a Presiding Officer of the Tribunal unless he has been a member of the Indian Legal Service and has held a post in Grade I of the service for at least three years;

(b) as a Member unless he has been a member of the Council for at least one full term and who is not a sitting member of the Council or who has not been a candidate in the election under dispute; or

(c) as a Member unless he holds the post of a Joint Secretary to the Government of India or any other post under the Central Government carrying a scale of pay which is not less than that of a Joint Secretary to the Government of India.

(3) The terms and conditions of service of the Presiding Officer and Members of the Tribunal, their place of meetings and allowances shall be such as may be specified.

(4) The expenses of the Tribunal shall be borne by the Council.".

Section 9. Amendment of section 12

In section 12 of the principal Act,-

(i) in sub-section (3), after the words "he shall be eligible for reelection", the words, brackets and figure "under sub-section (1)" shall be inserted;

(ii) in sub-section (4), -

(a) for the word "President" occurring at both the places, the words "President and the Vice-President" shall be substituted;

(b) for the words "charge of his duties", the words "charge of their duties" shall be substituted.

Section 10. Amendment of section 13

In section 13 of the principal Act,-

(i) in sub-section (2), after the words "meetings of the Council", the words "or he has been found guilty of any professional or other misconduct and awarded penalty of fine," shall be inserted;

(ii) in the proviso to sub-section (3), for the words "six months", the words "one year" shall be substituted.

Section 11. Substitution of new section for section 15

For section 15 of the principal Act, the following section shall be substituted, namely:-

"15. Functions of Council.-(1) The Institute shall function under the overall control, guidance and supervision of the Council and 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 powers, the duties of the Council shall include -

(a) to approve academic courses and their contents;

(b) the examination of candidates for enrolment and the prescribing of fees therefor;

(c) the regulation of the engagement and training of articled and audit assistants;

(d) the prescribing of qualifications for entry in the Register;

(e) the recognition of foreign qualifications and training for the purposes of enrolment;

(f) the granting or refusal of certificates of practice under this Act;

(g) the maintenance and publication of a Register of persons qualified to practice as chartered accountants;

(h) the levy and collection of fees from members, examinees and other persons;

(i) subject to the orders of the appropriate authorities under the Act, the removal of names from the Register and the restoration to the Register of names which have been removed;

(j) the regulation and maintenance of the status and standard of professional qualifications of members of the Institute;

(k) the carrying out, by granting financial assistance to persons other than members of the Council or in any other manner, of research in accountancy;

(l) the maintenance of a library and publication of books and periodicals relating to accountancy;

(m) to enable functioning of the Director (Discipline), the Board of Discipline, the Disciplinary Committee and the Appellate Authority constituted under the provisions of this Act;

(n) to enable functioning of the Quality Review Board;

(o) consideration of the recommendations of the Quality Review Board made under clause (a) of section 28B and the details of action taken thereon in its annual report; and

(p) to ensure the functioning of the Institute in accordance with the provisions of this Act and in performance of other statutory duties as may be entrusted to the Institute from time to time.".

Section 12. Insertion of new section 15A

After section 15 of the principal Act, the following section shall be inserted, namely:-

"15A. Imparting education by Universities and other bodies.-

(1) Subject to the provisions of this Act, any University established by law or any body affiliated to the Institute, may impart education on the subjects covered by the academic courses of the Institute.

(2) The Universities or bodies referred to in sub-section (1) shall, while awarding degree, diploma or certificate or bestowing any designation, ensure that the award or designation do not resemble or is not identical to one awarded by the Institute.

(3) Nothing contained in this section shall enable a University or a body to adopt a name or nomenclature which is in any way similar to that of the Institute.".

Section 13. Substitution of new section for section 16

For section 16 of the principal Act, the following section shall be substituted, namely:-

"16. Officers and employees, salary, allowances, etc.-

(1) For the efficient performance of its duties, the Council shall-

(a) appoint a Secretary to perform such duties as may be prescribed;

(b) appoint a Director (Discipline) to perform such functions as are assigned to him under this Act and the rules and regulations framed thereunder.

(2) The Council may also-

(a) appoint such other officers and employees as it considers necessary;

(b) require and take from the Secretary or from any other officer or employee such security for the due performance of his duties, as the Council considers necessary;

(c) prescribe the salaries, fees, allowances of the officers and employees and their terms and conditions of service;

(d) 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.

(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 14. Amendment of section 17

In section 17 of the principal Act,-

(a) in sub-section (1), for clause (iii), the following clause shall be substituted, namely:-

"(iii) a Finance Committee.";

(b) for sub-sections (2) and (3), the following sub-sections shall be substituted, namely :-

"(2) The Council may also form such other committees from amongst its members as it consider 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 one-third of the members of the committee as it thinks fit, and any member so co-opted shall be entitled to exercise all the rights of a member of the committee.

(3) Each of the Standing Committees shall consist of the President and the Vice-President ex officio, and minimum of three and maximum of five members to be elected by the Council from amongst its members.".