Sections 28 and 29 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 28 decides who is guilty when the person committing an offence under the Act is a company, and section 29 says who may start a prosecution at all. Neither section was changed by the 2022 Amendment Act. The Act was called the Cost and Works Accountants Act, 1959 until 10 May 2022.
When a company commits an offence under the Act, the company and every person in charge of and responsible for its business at the time are deemed guilty, unless that person proves the offence was committed without his knowledge or that he exercised all due diligence. A director, manager, secretary or other officer is also guilty where the offence was committed with his consent or connivance or is attributable to his neglect. No one may be prosecuted except on a complaint made by or under the order of the Council or the Central Government.
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. The 2022 Act did not amend sections 28 or 29, but it raised the penalties in sections 24 to 27 that section 28 applies to. Later amendments and notifications should be checked.
Section 28(1): the company and the persons in charge
If the person committing an offence under the Act is a company, then:
- the company, and
- every person in charge of, and responsible to, the company for the conduct of its business at the time of the commission of the offence
are deemed to be guilty of the offence and liable to be proceeded against and punished accordingly.
The proviso (the defence). A person is not liable to any punishment if he proves either that:
- the offence was committed without his knowledge; or
- he exercised all due diligence to prevent the commission of the offence.
The burden of showing this is on the person: the proviso says "if he proves". It is therefore not enough merely to deny involvement; the person has to establish the defence.
Section 28(2): directors, managers and others
Notwithstanding sub-section (1), where an offence under the Act has been committed by a company and it is proved that the offence was committed:
- with the consent or connivance of any director, manager, secretary or other officer, or
- that its commission is attributable to any neglect on the part of any such person,
that director, manager, secretary or other officer is also deemed guilty and liable to be proceeded against and punished. Sub-section (1) puts the person in charge in a position where he must prove his innocence. Sub-section (2) is different: it needs the prosecution to prove consent, connivance or neglect against the named officer.
The Explanation: what "company" and "director" mean here
For section 28:
| Term | Meaning |
|---|---|
| "Company", for an offence under section 24, section 25 or section 27 | Any body corporate, and includes a firm or other association of individuals |
| "Company", for an offence under section 26 | A body corporate (the firm and association extension does not apply) |
| "Director", in relation to a firm | A partner in the firm |
The effect is that if a firm falsely uses the title, misuses the Institute's name, or has a non-member sign documents, the firm is treated as a company and each partner is treated as its director. For section 26, which bars companies from practising as cost accountants, only a body corporate is a company. Section 26(2), as substituted in 2022, also names the officers who are knowingly a party to the contravention, so it operates alongside section 28. See our article on sections 26 and 27.
Section 29: sanction to prosecute
No person shall be prosecuted under the Act except on a complaint made by or under the order of the Council or of the Central Government.
This is a gatekeeping rule. A private person who discovers someone using the title "cost accountant" without membership cannot start a prosecution under the Act on his own complaint. He can bring it to the Council or the Central Government, which may then complain or order a complaint. The section applies to prosecutions "under this Act", that is, the offences in sections 24 to 27 and those that section 28 extends to companies and their officers. Sections 25(2) and 27(2) themselves speak of punishment "without prejudice to any other proceedings".
How the sections fit together
| Step | Section |
|---|---|
| The conduct: false claim, misuse of name, company practising, unqualified signing | 24, 25, 26, 27 |
| Who, in a company or firm, is guilty | 28 |
| Who may start the case | 29 |
For the penalties in sections 24 and 25 see our article on sections 23 to 25.
Two short examples
Example 1. Sharma and Verma Associates, a firm none of whose partners is a member of the Institute, advertises as "cost accountants". For section 24, the firm counts as a "company" under the Explanation, and each partner counts as its director. Under section 28(1) the firm and every partner in charge of and responsible for its business are deemed guilty. A partner who was abroad for the whole period and can prove the advertisement was placed without his knowledge may rely on the proviso.
Example 2. A competitor notices the advertisement and wants to prosecute. Under section 29 he cannot launch the case himself; he can write to the Council, which may make the complaint or order one to be made.
A firm, director or partner who may face a complaint, or a person who wants to raise one with the Council, can use legal dispute resolution support.
The same rule for chartered accountants
See Sections 27 and 28 of the Chartered Accountants Act, 1949, which pairs sanction to prosecute with branch offices. In this Act the matching topics are in section 29 and section 37, and offences by companies have their own section 28.
Need help with an offence involving a company or firm?
If your company, firm or a partner may be named in a complaint, or you are considering raising one with the Council, our legal dispute resolution team can help you read sections 28 and 29 against the facts.
Key takeaways
- When a company commits an offence, the company and the persons in charge are deemed guilty, unless they prove lack of knowledge or due diligence.
- Directors, managers, secretaries and officers are also guilty on proof of consent, connivance or neglect.
- A firm counts as a "company" for sections 24, 25 and 27, and a partner counts as a "director".
- For section 26, "company" means a body corporate only.
- Prosecution needs a complaint by or under the order of the Council or the Central Government.
Read next
- Sections 26 and 27: companies and unqualified persons signing documents
- Sections 23 to 25: regional councils, false claims and misuse of the name
- Sections 29A to 29D: the Quality Review Board
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.