Criminal acquittal does not automatically invalidate independent disciplinary findings of professional misconduct.

The petitioner, a practising Chartered Accountant and member of the Institute of Chartered Accountants of India, was accused of furnishing false and fabricated income-tax challans while representing an assessee before the Income Tax Department. The complaint was based, inter alia, on his statement recorded under Section 131 of the Income Tax Act, 1961.

Following disciplinary proceedings, the competent authority recorded a finding of professional misconduct on 10 February 2023 and, after hearing the petitioner on the question of penalty, ordered removal of his name from the Register of Members for 15 days on 15 June 2023.

The petitioner appealed under Section 22G of the Chartered Accountants Act, 1949, contending, among other things, that the disciplinary proceedings violated Article 20(3), relied upon an uncorroborated statement, and should have been stayed pending the criminal proceedings.

The Appellate Authority dismissed the appeal on 3 June 2026, and a consequential notification directed removal of the petitioner’s name for 15 days with effect from 18 August 2026.

The petitioner challenged the appellate order and consequential notification under Article 226 of the Constitution.

1. Whether the disciplinary and appellate authorities’ orders were liable to be quashed for violation of natural justice, non-application of mind, perversity, or failure to pass a speaking order.

2. Whether the pendency and eventual outcome of the criminal proceedings required the disciplinary proceedings to be stayed or the finding of professional misconduct to be set aside.

3. Whether the disciplinary finding could properly be sustained on the material relied upon, including the petitioner’s statement recorded under Section 131 of the Income Tax Act, 1961, in proceedings under Article 226.

4. Whether the penalty of removal from the Register of Members for 15 days was so disproportionate as to warrant judicial interference.

The Court applied Article 226 of the Constitution, under which judicial review in disciplinary matters is ordinarily confined to the legality and fairness of the decision-making process, compliance with natural justice, and the existence of perversity, rather than reappreciation of evidence.

It considered the disciplinary and penalty framework under Sections 21 and 21A of the Chartered Accountants Act, 1949, including the requirement that the competent authority record a determinative finding of misconduct and afford the member an opportunity of hearing before imposing punishment.

The Court relied on D.K. Agrawal v. Council of the Institute of Chartered Accountants of India, 2021 SCC OnLine SC 903, for the distinction between tentative conclusions and the final finding of misconduct, and the requirement of hearing at the penalty stage.

It further relied on Lucknow Kshetriya Gramin Bank v. Rajendra Singh, (2013) 12 SCC 372, holding that the quantum of disciplinary punishment primarily falls within the disciplinary authority’s jurisdiction and may be interfered with only where the penalty is shocking to the conscience of the Court.

The Court also applied the principle that criminal and disciplinary proceedings operate in distinct fields and that the result of one does not automatically govern the other.

The Court found that the petitioner had received the prima facie opinion and relevant material, filed a written statement and rejoinder, made further written submissions, and was heard separately on the question of penalty; therefore, no denial of natural justice or specific prejudice was established.

The mere pendency, and eventual acquittal, in the criminal case did not invalidate the disciplinary proceedings because the latter concerned professional conduct under the Chartered Accountants Act, whereas the criminal case concerned penal liability.

The Court declined to reassess the evidentiary value of the Section 131 statement, observing that Article 226 does not permit the writ court to substitute its assessment for that of the disciplinary authority unless the finding is unsupported, perverse, or procedurally unlawful.

It also held that the appellate order’s failure to address every submission in the manner desired by the petitioner did not, without demonstrated prejudice or failure of decision-making, render it invalid.

Given the seriousness of dishonesty-related misconduct by a Chartered Accountant, the 15-day removal was not shockingly disproportionate and was, if anything, relatively lenient.

The writ petition was accordingly dismissed, the Appellate Authority’s order dated 3 June 2026 and the consequential notification removing the petitioner’s name from the Register of Members for 15 days were upheld, and there was no order as to costs.