CA. Sudeep, a newly qualified Chartered Accountant holding Certificate of Practice, approached CA. Suraj, the statutory auditor of his father's…

Clause (1) of Part I of the First Schedule to the Chartered Accountants Act, 1949 states that a chartered accountant in practice shall be deemed to be guilty of professional misconduct if he allows any person to practice in his name as a chartered accountant unless such person is also a chartered accountant in practice and is in partnership with or employed by him. The above clause is intended to safeguard the public against unqualified accountant practicing under the cover of qualified accountants. It ensures that the work of the accountant will be carried out by a Chartered Accountant who may be his partner, or his employee and would work under his control and supervision. In the instant case, CA. Suraj allowed CA. Sudeep (who is a newly qualified CA. professional with COP) to sit in his office for 6 months and allowed him to provide tax consultancy independently to his firm's clients, filing of some IT and GST Returns. He also allowed him to appear before various tax authorities on behalf of his firm. CA. Sudeep was only reimbursed with his usual expenses and was not paid any salary or share of profit for the same. However, after the end of agreed period he was given a lump-sums of 4,00,000 for his association out of gratitude. Thus, in the present case CA. Suraj will be held guilty of professional misconduct as per Clause (1) of Part I of the First Schedule to the Chartered Accountants Act, 1949 as he allowed CA. Sudeep to practice in his name as Chartered accountant and CA. Sudeep is neither in partnership nor in employment with CA. Suraj.