Decisions of various judicial forums are always discussed and debated. Many decisions, particularly those of the High Court and the Apex Court have far-reaching impact on the business, industry, the profession and the public in general. Judgements of the Tribunals also attract attention, but to a lesser degree, as they are fact-based and do not finally decide the issue. However, recently, a decision of the Mumbai Bench of the Income Tax Appellate Tribunal was widely publicised in the media, and was the topic of discussion among our colleagues, for it contained rather critical observations about the profession. There were responses to what appeared in the media by some leaders of our profession.
On reading of the decision, I felt that while the comments may not have been necessary to decide the appeal, they were not entirely unwarranted. While it is true that in regard to some of the observations contained in the said decision that there could be two views, their tone reflected concern and anguish rather than only criticism. It must also be appreciated that the order was authored by a member of our profession.
The appeal before the Tribunal was filed beyond the prescribed period by 2,984 days. The delay was on account of erroneous advice given by a Chartered Accountant, which was admitted by him on the affidavit. The Tribunal which expressed admiration for core expertise and knowledge of Chartered Accountants, felt that the commission of such an error by a Chartered Accountant was unlikely. It felt that the affidavit had been issued to accommodate the client. It therefore rejected the affidavit. However, as the Tribunal has stated that if the Chartered Accountant had actually tendered such grossly erroneous advice or the Chartered Accountant “accommodated” the assessee in both events there was cause for worry. I would share that concern.
Even more disturbing was the fact that the reporting in the media gave an impression that the Tribunal had virtually castigated the entire profession, while the contents of the order were significantly different. What was distressing was the perception in the public mind that the profession deserved the brickbats it purportedly received.
Rather than take up an aggressive or defensive posture, the profession should take a note of this decision and seriously introspect. In an earlier editorial, I had mentioned that as professionals we need to understand our role and the parameters within which we carry out our professional duties. Given the nature of our profession a close association with the client is inevitable. However, that relationship or association should not result in our shying away from our duties and responsibilities. As much as we may have sympathy for the travails that a businessman has to suffer on account of unjust laws, complicated regulations etc., we cannot let that colour the opinion that we have to express as auditors and the advice that we have to give as tax consultants.
Apart from the expertise and technical prowess for which the public relies on our profession, what distinguishes us, or at least what ought to, from others is the ethical standards which we are expected to follow. It is in this area that we have seen consistent deterioration over the last couple of decades. We see among professionals, a desire for quick success, quick money and for that purpose the willingness to make the necessary compromises. While this is the attitude of some in the profession, the businessman also wants to hoodwink the law and achieve his objective wherever he can. This results in the “accommodation” to which the Tribunal has made a reference. Whenever this aspect is raised in discussions, the refrain of many of my friends is that the deterioration in the the profession is a “reflection of deteriorating ethical and moral standards in society.” While this is true, it cannot be a defence for falling standards of conduct. If, as a profession, we wish to claim some different and distinct status, we cannot say that because society tolerated unethical conduct by others, such conduct by a Chartered Accountant is pardonable. It is because of our professional skills and standing that the society expects something different from us. If we are to retain the rapidly diminishing respect for our profession in the society, we must discharge our onerous obligation. The Tribunal in another paragraph points out that if the member had indeed committed such a gross error, the efficacy of the Continuing Professional Education programs (CPE) which are held by the ICAI, may have reduced. Attendance of these programmes is mandatory, for practising professionals. While a general statement about the falling standards of these programmes is certainly not appropriate, their content, the manner in which they are conducted, is certainly worth a revisit. With continuous development of laws, rules and regulations and changes in the business environment, updation is required in a vast number of areas. The primary role of the ICAI is that of a regulator of the profession, and the setter of accounting and auditing standards. The responsibility of ensuring the updation of knowledge of a large number of members in numerous areas, while maintaining a high standard of quality is an onerous responsibility. For the benefit of the profession at large, it can share this responsibility with other professional bodies.
As far as individual professionals are concerned, one has in the recent past experienced an attitude of seeking exemption from the mandatory attendance of CPE programmes or make an attempt only to comply with the regulations in letter and not in spirit. This is inexcusable. If we claim to be an elite profession then we must accept the principle that our knowledge and professional skills have to remain updated and our skills have to be honed to perfection.
Finally, it is true that the conduct of the Chartered Accountant which led to the observations by the honourable Tribunal may not be representative of the profession in general, it is certainly not a solitary instance. Let us take this opportunity to introspect. I only hope that this will not be like an introspection by any political party after a debacle, but one which will result in some positive action.
