Section 21A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Board of Discipline hears the less serious class of misconduct, the matters listed in the First Schedule. Section 21A in force today is the 2006 text. A new section 21A was enacted by the 2022 Amendment Act but is not in force. The Act was called the Cost and Works Accountants Act, 1959 until 10 May 2022.
In force: the Council constitutes a Board of Discipline of three (a legally experienced Presiding Officer, two members, with the Director (Discipline) as Secretary). It follows summary disposal procedure and, after a hearing, may reprimand, remove the name for up to three months, or fine up to rupees one lakh for First Schedule misconduct. Enacted in 2022 but not in force: Central Government nominees, an inquiry within ninety days, removal up to six months, fine up to two lakh, and action against firms up to twenty-five lakh.
How this article reads the Act
This article follows the Act as printed by the Institute (as amended in 2011), read with the 2022 Amendment Act to the extent brought into force by S.O. 2184(E) dated 10 May 2022. Section 57 of the 2022 Act, which substitutes section 21A, is not among the provisions brought into force. A later commencement notification should be checked; none was found in the sources consulted.
Section 21A in force: the 2006 text
Section 21A(1): composition. The Council shall constitute a Board of Discipline consisting of:
- (a) a person with experience in law and having knowledge of disciplinary matters and the profession, as Presiding Officer;
- (b) two members, one a member of the Council elected by the Council, and the other the person designated under clause (c) of sub-section (1) of section 16, which is the officer designated to carry out the administrative functions of the Institute as its chief executive; and
- (c) the Director (Discipline) as Secretary of the Board.
Clause (b) deserves a second look. It does not name the Secretary or any specific post; it points to the officer "designated under" section 16(1)(c) in the 2006 text. That ties the Board to the in-force section 16(1), which is also under the commencement trap; see our article on sections 16 to 18.
Section 21A(2): procedure. The Board follows summary disposal procedure in dealing with all cases before it.
Section 21A(3): penalties. Where the Board is of the opinion that a member is guilty of professional or other misconduct mentioned in the First Schedule, it must give the member an opportunity of being heard before making any order against him, and may then take any one or more of these actions:
| Clause | Action |
|---|---|
| (a) | Reprimand the member |
| (b) | Remove the name of the member from the Register of members up to three months |
| (c) | Impose such fine as it thinks fit, extending to rupees one lakh |
Section 21A(4): no prima facie case. The Director (Discipline) submits to the Board all information and complaints in which he is of the opinion that there is no prima facie case. The Board may, if it agrees, close the matter; in case of disagreement, it may advise the Director to investigate further.
Section 21A as enacted in 2022 (not in force)
| Sub-section | What the 2022 text says |
|---|---|
| (1) | One or more Boards, each of: (a) a Presiding Officer who is not a member of the Institute, with experience in law, nominated by the Central Government from a Council panel; (b) one member of eminence in law, economics, business, finance or accountancy, not a member of the Institute, nominated by the Central Government from a Council panel; (c) one member nominated by the Council from a panel of members; (d) an officer not below Deputy Secretary as Secretary. The same Presiding Officer and member (b) may serve different Boards |
| (2) | Procedure as specified, including faceless proceedings and virtual hearings |
| (3) | On receipt of the preliminary examination report, the member or firm submits a written statement within twenty-one days, extendable by another twenty-one days in exceptional circumstances, for reasons recorded in writing |
| (4) | The Board concludes its inquiry within ninety days of receiving the report |
| (5) | If it finds First Schedule misconduct, it may pass an order within thirty days of the finding, after a hearing: (a) reprimand, recorded in the Register of members; (b) remove the name up to six months; (c) fine up to two lakh rupees |
| (6) | If a member who is a partner or owner of a firm has been repeatedly found guilty of First Schedule misconduct during the last five years, the Board may also (a) prohibit the firm from practice for up to one year, or (b) fine the firm up to twenty-five lakh rupees |
| (7) | If a fine is not paid within the specified time, the Council removes the name from the Register of members or Register of firms for such period as it thinks fit |
| (8) | The Presiding Officer and members are paid prescribed allowances |
The main differences
| Point | In force (2006) | Enacted 2022, not in force |
|---|---|---|
| Presiding Officer | A person with legal experience | A non-member with legal experience, nominated by the Central Government |
| Removal | Up to three months | Up to six months |
| Fine | Up to rupees one lakh | Up to two lakh rupees |
| Time limits | None stated | Ninety days for the inquiry; thirty days for the order |
| Firms | Not covered | Prohibition up to one year, or fine up to twenty-five lakh rupees |
| Procedure | Summary disposal | As specified, including faceless proceedings and virtual hearings |
Until a notification brings the 2022 text into force, the 2006 text applies. Appeals lie to the Appellate Authority; see our article on sections 22A to 22E.
A short example
Manish Gupta, a cost accountant in practice, shares his professional fees with an unqualified person, which is the kind of conduct that Part I of the First Schedule deals with. The Director (Discipline) places the matter before the Board of Discipline. The Board hears Manish and, after the hearing, may reprimand him, remove his name for up to three months, or fine him up to rupees one lakh, or combine these. It cannot remove him permanently; that power lies with the Disciplinary Committee for Second Schedule matters. Manish may appeal to the Authority within ninety days of the order being communicated.
A member who has to answer before the Board, or a person who needs to understand how the penalties apply, can use legal dispute resolution support.
The same rule for chartered accountants
See Section 21A of the Chartered Accountants Act, 1949. One difference is worth a line: in this Act the in-force section 21A(1)(b) names as the second member the person designated under section 16(1)(c).
Need help before the Board of Discipline?
If you have received a notice or want to understand the penalties a Board may impose, our legal dispute resolution team can help you prepare a reply and read it against the First Schedule.
Key takeaways
- In force: a three-person Board follows summary disposal procedure for First Schedule misconduct.
- Penalties after a hearing: reprimand, removal up to three months, fine up to rupees one lakh, in any combination.
- The Director (Discipline) is the Board's Secretary and sends it the no-prima-facie cases.
- The 2022 section 21A, with Central Government nominees and firm penalties, is not in force.
- Appeals go to the Appellate Authority.
Read next
- Section 21: the Disciplinary Directorate
- Section 21B: the Disciplinary Committee
- Sections 22A to 22E: Appellate Authority and appeals
Disclaimer: Based on the Cost and Works Accountants Act, 1959 (now the Cost Accountants Act, 1959) as printed by the Institute of Cost Accountants of India (as amended in 2011), read with the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Act, 2022 to the extent brought into force by S.O. 2184(E) dated 10 May 2022, as consulted on 3 October 2026. Regulations, rules, later amendments and commencement notifications should be checked. This article is general information, not legal advice; check the official text before acting.