By P. N. Shah, H. N. Motiwalla,Chartered Accountants
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In the case of ICAI v. CA Ajay Kumar Gupta, the CIT Delhi filed a complaint before ICAI that the member had issued an audit report in Form No. 10CCAC certifying that the assessee had made exports and that it was eligible for deduction u/s.80HHC of Rs.18.32 lac. During the assessment proceedings, the claim for deduction u/s.80HHC was found to be false and the assessee admitted this fact. The assessee’s accounts showed that the sale proceeds for exports were not received during the year within the prescribed period.
ICAI conducted the enquiry and found the member guilty of professional misconduct under clause (7) of Part I of Second Schedule of the C.A. Act. It recommended to the Delhi High Court that the name of the member be removed from the Register of Members for a period of 3 years.
The defence of the member before the High Court was that he was in practice for 21 years without a single incident of professional misconduct or negligence. He also argued that he could not put up his defence before ICAI properly because he had suffered paralytic attack and the assessee had taken away the file. He submitted that a lenient view may be taken in his case.
The High Court has held as under:
(i) The accountants’ profession occupies a place of pride amongst various professions of the world and makes observance of professional duties and propriety more imperative. When conduct of a member of the profession is contrary to honesty, or opposed to good morals, or is unethical, it is misconduct-warranting consequences indicated in the Statute. A breach of confidence is a stigma not only on the individual concerned, but is also likely to have effect on credibility of the profession as a whole.
(ii) The CA’s explanation that the assessee had taken away the file and that he suffered a paralytic stroke does not inspire any confidence because the relevant documents and information were supplied to him. The assessee accepted the fact that section 80HHC claim was not maintainable during the assessment proceedings. Once it is established that no payment was received against the export, the certificate issued by the CA was false. It is a bogey raised by the CA that he has verified all the documents and only then issued the certificate. On the quantum of punishment, on the one hand, the CA pleads his sickness, has an otherwise unblemished practice of 21 years and incident is old. On the other hand, the misconduct is of serious nature because submitting a false/ bogus certificate to the client to enable him to make false claim of deduction under the Incometax Act, is of serious offence. That the CA made an attempt to dupe the tax authorities and help the assessee to avoid the tax to that extent such a conduct has to be taken seriously.
He accordingly cannot be let off merely by giving him reprimand. Some penalty needs to be imposed so that it acts as deterrent and such professional misconduct is not committed. Weighing the circumstances, the ends of justice would be subserved by removing his name from the Register of Members for a period of six months. (itatonline — 9-3-2012).
