Noc required from ca, but he refuses to

Dear Members

I am looking for a answer to very specific question.

Client: ABC - Sole proprietor

Legal Advisor - XYZ

Auditor - PQR

Now the situation is that ABC approached XYZ for Tax Audit purpose, so he took up the assignment and got the ABC's Book of account audited by PQR. ABC Gets report through XYZ and paid fees to him. As the business of ABC has increased significantly, he is not satisfied with his auditor and want to appoint M/S RKS. RKS when approached told ABC to get No Objection Certificate (NOC) from Previous Auditor. XYZ refused to give NOC and threated client that he will sue and make sure his business premises gets raided by Income tax department.

What are the appropriate action that can be taken by ABC to change is auditor?

Is there any procedure by which RKS can be appointed as Tax Auditor 

Replies (4)

ABC can change its Auditor provided New Auditor(RKS) is agree to accept the assignment.....and if  by carefully considering the fact that Non-issue of NOC by previous Auditor is not reasonable....so new Auditor's communication is sufficient enough to take up the assignment... 

agreed with above answer... also i want to add that ABC should not have any dues payable to XYZ or PQR.

What if the new auditor is reluctant to send communication letter to Previous auditor and ask ABC to get NOC and then only he will take up the assignment. Is RKS right on his part

Originally posted by : Pankaj Chugh
What if the new auditor is reluctant to send communication letter to Previous auditor and ask ABC to get NOC and then only he will take up the assignment. Is RKS right on his part

In that case new Auditor will be guilty of professional misconduct under CA Act,1949....because as per the CA Act, he himself required to communicate the previous auditor before accepting the new assignment...

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