The Supreme Court has transferred to itself a batch of writ petitions pending in the high courts of Calcutta, Kerala and Madras challenging certain guidelines issued by The Institute of Chartered Accountants of India restricting the annual auditing of accounts by chartered accountants to a maximum of 60 in a year and also imposing disciplinary action against them for “professional misconduct” for the violation of certain other guidelines.

The chartered accountants have challenged the regulations in the high courts “on the ground that it violated their fundamental right to carry out their profession guaranteed under Article 19(1)(g) of the Constitution”.

The ICAI had moved the apex court for the transfer of the petitions in different high courts to the top court for an authoritative pronouncement on the issue to avoid any conflicting verdicts.

A bench of Justices Ashok Bhushan, R. Subash Reddy and M.R. Shah agreed with the ICAI saying it involved public interests, not only chartered accountants but also the citizens.

Accordingly the court passed the judgment: “The guidelines which are impugned in the High Court and consequent disciplinary proceedings initiated against various chartered accountants throughout the country is an issue of public importance ... We are satisfied that to settle the law and to clear the uncertainty among tax professionals and citizens, it is appropriate that this Court may transfer the writ petition...” The interim orders passed in the writ petitions which are being transferred shall continue till any other order is passed .

Under chapter VI of the Council General Guidelines, 2008 of Institute of Chartered Accountants of India, the specified number of tax audits by a chartered accountant is set at 60 in a financial year whether in respect of corporate or a non-corporate assessee. If the threshold is exceeded, there are disciplinary provisions and a member can be held guilty of professional misconduct.

CAs said capping the number of tax audits may be seen as infringement of efficiency. If auditors are able to complete the entire audit work as restricted by the 2008 guidelines, they may also be unemployed for the rest of the year.

(With inputs from the Calcutta Bureau)