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TaxTMI 
TaxTMI 
TaxTMI 
2000 (9) TMI 1094
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....uted and is as follows: 2. B.L. Khanna (hereinafter referred to as the respondent) as a Chartered Accountant had certified an application by Aero Traders Private Limited in accordance with the requirements of Import and Export Policy, certifying the F.O.B. value of exports at Rs. 4,44,77,996/- which was wrong. Chief Controller of Imports and Exports gave information to the Institute that figures certified by the respondent in the report were not correct. respondent certified the FOB value of exports at Rs. 4,44,77,996/-, whereas the correct figure was Rs. 4,14,69,925/-. On getting information from the Chief Controller of Imports and Exports, matter was referred to Discipli- nary Committee. Said Committee concluded that respondent was gui....
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....member of the Institute has been guilty of any professional or other misconduct, the Council shall refer the case to the Disciplinary Committee, and the Disciplinary Committee shall thereupon hold such inquiry and in such manner as may be prescribed, and shall report the result of its inquiry to the Council. (2) If on receipt of such report the Council finds that the member of the Institute is not guilty of any professional or other misconduct, it shall record its finding accordingly and direct that the proceedings shall be filed or the complaint shall be dismissed, as the case may be. (3) If on receipt of such report the Council finds that the member of the Institute is guilty of any professional or other misconduct, it s....
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....shall afford such member, the Council and the Central Government an opportunity of being heard, and may there- after make any of the following orders, namely:- (a) direct that the proceeding be filed, or dismiss the complaint, as the case may be ; (b) reprimand the member ; (c) remove him from membership of the Institute either permanent ly or for such period as the High Court thinks fit, (d) refer the case to the Council for further inquiry and report. 22. Professional misconduct defined:- For the purpose of this Act, the expression "professional misconduct" shall be deemed to include any act or omission specified in any of the Schedules, but nothing in this section shall be construed to limit o....
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....tly and reasonably. Word 'negligence' is associated in the provision with the word 'misconduct' and involves some element of moral culpability. Mere imprudence or want of judgment or grave error in judgment is not enough. Misconduct implies failure to act honestly and reasonably either according to the ordinary and natural standard or according to the standard of a particular profession. But error or misinterpretation of law and specially one view or another over a debatable construction cannot be ground for the allegation and finding of professional misconduct against a Chartered Accountant. Negli- gence is the omission to do something which a reasonable man, guided upon those considerations, which ordinarily regulate the c....
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....uditor would use, what is reasonable skill, care, and caution must depend on the particular circumstances of each case. An auditor is not bound to be a detective, or, as was said, to approach his work with suspicion or with a foregone conclusion that there is something wrong. He is a watch-dog, but not a bloodhound. If there is anything calculated to excite suspicion he should probe it to the bottom; but in the absence of anything of that kind he is only bound to be reasonably cautious and careful." 8. It was observed by the Apex Court in the context of an Advocates' professional misconduct that an act which is done otherwise than with utmost good faith is unprofessional. [See Pandurang Dattatreya Khandekar Vs . The Bar Council of Ma....