Section 21B 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.
Section 21B creates the Disciplinary Committee, the body that deals with Second Schedule misconduct, or misconduct under both Schedules. The section as in force is the 2006 text, sub-sections (1) to (4): the President or Vice-President as presiding officer, four other members, and penalties of reprimand, removal of the name permanently or for a period, or a fine up to rupees five lakhs. The 2022 section 21B, sub-sections (1) to (8), is enacted by Act 12 of 2022 but not yet in force as per the ICAI 2022 edition and S.O. 2184(E) dated 10 May 2022.
This article is as per the Act as printed in the ICAI edition of 2022 (amended up to the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Act, 2022). The footnote to the 2022 section reads "came into force w.e.f." with a blank date, and the edition's cover lists section 21B as yet to be notified. A later commencement notification should be checked, together with later amendments and notifications.
In force: the Council constitutes a Disciplinary Committee with the President or Vice-President presiding, two members elected from the Council and two nominated by the Central Government. For Second Schedule misconduct, or both Schedules, after a hearing it may reprimand, remove the name permanently or for a period, or fine up to rupees five lakhs. Enacted, not yet in force: inquiry within one hundred and eighty days, fine up to ten lakh rupees, firm prohibition up to two years, cancellation of firm registration and a fine up to fifty lakh rupees on a firm.
Where section 21B fits
After the Director (Discipline) forms a prima facie opinion under section 21, matters in the Second Schedule, or in both Schedules, go to the Disciplinary Committee. First Schedule matters go to the Board of Discipline under section 21A. The Second Schedule items are explained in the Schedule articles, starting with the Second Schedule, Part I, items (2) to (6). If a Second Schedule matter has been placed against you or your firm, early advice from a legal dispute resolution adviser matters, because the penalties here include permanent removal from the Register.
Section 21B as in force (2006 text)
Section 21B was inserted by the 2006 Amendment Act, in force from 17 November 2006.
21B(1): composition. The Council shall constitute a Disciplinary Committee consisting of the President or the Vice-President of the Council as the presiding officer, two members elected from amongst the members of the Council and two members nominated by the Central Government from amongst persons of eminence having experience in the field of law, economics, business, finance or accountancy. A proviso says the Council may constitute more Disciplinary Committees as and when it considers necessary.
21B(2): procedure. In considering cases placed before it, the Committee follows such procedure as may be specified, meaning in rules made by the Central Government.
21B(3): penalties. Where the Committee is of the opinion that a member is guilty of a professional or other misconduct mentioned in the Second Schedule, or in both the First Schedule and the Second Schedule, it shall afford the member an opportunity of being heard before making any order against him. It may thereafter take any one or more of these actions:
| Clause | Action |
|---|---|
| (a) | reprimand the member |
| (b) | remove the name of the member from the Register permanently or for such period as it thinks fit |
| (c) | impose such fine as it may think fit, which may extend to rupees five lakhs |
21B(4): allowances. The allowances payable to the members nominated by the Central Government shall be such as may be specified.
Three points. First, the Committee can remove a name permanently, which the Board of Discipline cannot. Second, the member must be heard before any order. Third, the Committee may take "any one or more" of the actions, so a removal can be combined with a fine. The definition of "Disciplinary Committee" in section 2(1) refers to the Committee under section 21B(1).
Section 21B as enacted in 2022 (not yet in force)
The 2022 Amendment Act substitutes a longer section 21B. As per the edition and S.O. 2184(E), it is not yet in force.
| Sub-section | Rule as enacted |
|---|---|
| (1) | The Council shall, by notification, constitute one or more Disciplinary Committees, each of: (a) a person, not a member of the Institute, with experience in law and knowledge of disciplinary matters and the profession, nominated by the Central Government as Presiding Officer from a panel prepared by the Council; (b) two persons of eminence in law, economics, business, finance or accountancy, not members of the Institute, nominated by the Central Government from a panel; (c) two members nominated by the Council from a panel of members of the Institute. The Presiding Officer and the members under (b) may be the same for different Committees |
| (2) | The Committee follows such procedure, including faceless proceedings and virtual hearings, as may be specified |
| (3) | On receipt of the preliminary examination report, the Committee requires the member or the firm to submit a written statement within twenty-one days, extendable by another twenty-one days in exceptional circumstances for reasons recorded in writing |
| (4) | The Committee concludes its inquiry within one hundred and eighty days of receiving the preliminary examination report |
| (5) | If the Committee finds a member guilty of Second Schedule misconduct, or of both Schedules, it may pass an order within thirty days of the finding, after a hearing: (a) reprimand and record it in the Register of members; (b) remove the name from the Register of members permanently or for such period as it may think fit; (c) fine up to ten lakh rupees |
| (6) | If a member who is a partner or owner of a firm has been repeatedly found guilty of Second Schedule misconduct, or of both Schedules, during the last five years, the Committee may also: (a) prohibit the firm from activities relating to the profession of a chartered accountant in practice for up to two years; (b) suspend or cancel the registration of the firm and remove its name from the Register of firms permanently or for such period as it may think fit; or (c) fine the firm up to fifty lakh rupees |
| (7) | If a member or firm fails to pay a fine within the specified time, the Council shall remove 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 such allowances as may be prescribed |
Side-by-side
| Point | In force (2006) | Enacted 2022, not yet in force |
|---|---|---|
| Presiding officer | the President or Vice-President | a non-member with legal experience nominated by the Central Government from a Council panel |
| Members | two elected from the Council, two nominated by the Central Government | two non-members nominated by the Central Government, two members nominated by the Council from a panel |
| Number of Committees | a Committee; more if the Council considers necessary | one or more, by notification |
| Procedure | as specified | as specified, including faceless proceedings and virtual hearings |
| Time limit | none stated | inquiry in one hundred and eighty days; order in thirty days of the finding |
| Name removal | permanently or for such period as it thinks fit | permanently or for such period as it may think fit |
| Fine | up to rupees five lakhs | up to ten lakh rupees |
| Action against firms | none | prohibition up to two years, suspension or cancellation of registration, or a fine up to fifty lakh rupees |
| Non-payment of fine | none stated | removal from the Register of members or firms |
The firm provisions depend on Chapter IVA, the registration of firms, which is also not yet in force; see the article on sections 20A to 20D.
What happens after an order
A member aggrieved by an order of the Disciplinary Committee imposing a penalty may appeal to the Appellate Authority under section 22G; see the article on section 22G. A member whose name is removed by an order is also affected by the rules on the Register in sections 19 and 20, and by the eligibility bar for Council elections in section 9.
A worked example
A complaint alleges that a member certified a forecast without disclosing material facts, a Second Schedule matter. Under the section in force, the Committee, with the President or Vice-President presiding, hears the member. If it finds him guilty it may reprimand him, remove his name from the Register permanently or for a period, or fine him up to rupees five lakhs, or combine them. Under the 2022 text, once in force, the Committee would require a written statement within twenty-one days, aim to finish the inquiry within one hundred and eighty days, raise the fine ceiling to ten lakh rupees and could also act against the member's firm.
Need help in a Disciplinary Committee matter?
Matters before the Disciplinary Committee can end in removal from the Register. Our legal dispute resolution team can read your case against section 21B as in force, the Second Schedule item involved and the current notifications, and plan the response and any appeal.
Key takeaways
- In force: the Disciplinary Committee, led by the President or Vice-President with two elected and two Government-nominated members, deals with Second Schedule misconduct or both Schedules.
- It may reprimand, remove the name permanently or for a period, or fine up to rupees five lakhs, after a hearing.
- The Committee can remove a name permanently; the Board of Discipline cannot.
- Enacted but not yet in force: a one hundred and eighty day inquiry, fine up to ten lakh rupees, and firm action up to fifty lakh rupees with prohibition up to two years or cancellation of registration.
- Appeal lies to the Appellate Authority under section 22G.
- A later commencement notification should be checked before relying on the 2022 text.
Read next
- Section 21A of the Chartered Accountants Act, 1949: the Board of Discipline
- Sections 21C, 21D and 22 of the Chartered Accountants Act, 1949: civil court powers, transitional cases and misconduct defined
- Section 22G of the Chartered Accountants Act, 1949: appeal to the Appellate Authority
- Section 21B of the Cost Accountants Act, 1959: the Disciplinary Committee
Disclaimer: Based on the Chartered Accountants Act, 1949 as printed in the ICAI edition of 2022 (amended up to Act 12 of 2022), read with S.O. 2184(E) dated 10 May 2022, which brought only part of the 2022 amendments into force, as consulted on 3 October 2026. Regulations, rules, Council guidelines, later amendments and commencement notifications should be checked. This article is general information, not legal advice; check the official text before acting.