Institute of Chartered Accountants of India vs. Rajesh Chadha FCA & Anr. AIR 2012 P & H 170 (High Court)
The disciplinary proceedings against the respondent- Rajesh Chadda, Chartered Accountant was initiated on the basis of a complaint u/s. 21 of the Act, received from Commissioner, Central Excise Chandigarh-II Chandigarh against the respondent. Considering the aforesaid complaint, the Council of the Institute of Chartered Accountants of India under the Act referred the case to the Disciplinary Committee for inquiry.
The complaint was that, during the audit of M/s. Ashwin Fabrics (P) Ltd., Amritsar by Central Excise Commissioner from 14.6.1999 to 16.6.1999, the Central Excise Officers came across two sets of balance sheets prepared and signed by the same Chartered Accountant i.e. the respondent herein. One set of balance sheet was prepared for Income Tax Department and another for Central Bank of India. In the two balance sheets, there was a difference of Rs. 3 crore in the entry pertaining to sale of stocks. It was mentioned in the complaint that the respondent was summoned u/s. 14 of the Central Excise Act, 1944. He accepted that both these balance sheets were prepared and signed by him.
It was therefore, requested that appropriate action may be initiated against Rajesh Chadha, of M/s. Rajesh Chadha & Associated Chartered Accountant, for professional misconduct.
In the reply filed to the complaint before the Council, the respondent admitted having made statement before the Central Excise Authorities but asserted that he ought to have taken due caution while tendering statement before the Central Excise Department.
The Disciplinary Committee also noticed that on the basis of the balance sheet, submitted by the Company, duly authenticated by the Chartered Accountant, loan was sanctioned by the Bank and that the respondent had neither to put in appearance nor the witnesses cited have been examined. He has failed to bring in evidence to prove his bona fide conduct in the entire matter. The Council also decided to recommend to the High Court that the name of the Respondent be removed from the Register of Members for a period of three years.
The Hon’ble Court in pursuance of such recommendation of the Council examined the matter and observed that the respondent had not examined any defence witnesses in support of his assertion that his signatures on the balance sheets do not tally. He had admitted before the Central Excise Authorities that both the sets of balance sheets were signed by him. Copy of the said statement was supplied to the respondent on the same date, as is apparent from the endorsement recorded at the end of the statement. It is not even asserted by the respondent that he disputed the recording of the statement at any time by submitting any objection at any time or by submitting any protest petition to the Central Excise Department. In the absence of any oral or documentary evidence, the stand in the written statement that the signatures on the two balance sheets are not genuine, cannot be believed. The nature of the print out and the other figures are exactly the same as in the other balance sheet of which Manufacturing & Trading & Profit and Loss Account for the year ending 31.3.1998, which is available in the paper book.
It was for the respondent to explain as to how for the same period, two different Manufacturing & Trading & Profit and Loss Account statements came into existence duly signed by him, giving discrepant purchase and sale figures. Having failed to give any plausible explanation, the disciplinary proceedings have rightly been concluded as to misconduct on the part of the respondent. The recommendation and order removal of respondent- Shri Rajesh Chadha as the member of the institute for the period of three years was accepted.
