Cancerous Corruption
Vikram was fond of moving around in the graveyard in the
horrifying night to catch Vetal after daylong practice as chartered accountant.
For Vikram friendship with Vetal was real education. Vetal being the spirit of
an intelligent human being frustrated in its lifetime was still on the earth
posthumously to find answers to innumerable questions lingering in his mind
during his stint as human being. He developed friendship with Vikram. After
playing hide and seek game Vikram used to catch Vetal in the wee hours of
morning. Then he would put Vetal on his shoulder and tread through woods of the
graveyard. Vetal would laugh weirdly in the silence of the graveyard and
thunder :
“So Vikrambhai you succeeded to catch me once again, keep
walking don’t look back, if you speak a word I will vanish. Well I would tell
you a story involving your professional colleague which happened in a metro. To
keep the flow of the story I would name my characters one by one as the story
moves on. Your professional colleague, let’s say Gopal, was a fresh chartered
accountant. He started his practice as soon as he passed his final exam. He had
no ‘Godfather’ in the profession and was on his own. He was very enthusiastic
and honest. He was well-versed with the code of conduct of the ICAI. He was
approached by an old man called Purshottam aged about 60 years.
Purshottam retired as chief engineer from a manufacturing
company. Purshottam had four daughters. Only one daughter got married during his
service tenure. Other three were still pursuing their studies. Obviously
Purshottam was financially not that strong to spend on his daughters’ higher
education and their marriages after retirement down the line. During the fag end
of his service he came into contact with Duryodhan, a high-profile government
officer in charge of ‘safety audits’ prescribed under the Factories Act.
Duryodhan was aware that Purshottam was ‘a chartered engineer’ by qualification.
Vikrambhai you know in our country under Factories Act you are required to
observe number of safety measures. For this purpose the factory owner has to get
the report from a ‘chartered engineer’ as to the implementation of safety
measures by the factory satisfactorily.
You may be aware of Bhopal Gas tragedy of Union Carbide. For
the factory owner it is a big threat to its very existence, a small
non-compliance would lead to suspension of manufacturing activity,
investigations and litigation besides huge business loss, so on and so forth.
So this Duryodhan, a hard core corrupt government officer,
made an offer to Purshottam in connivance with the factory owners, to undertake
‘safety audits’. Purshottom was aware that audit fee for a single ‘safety audit’
runs in lacs. However the offer was not without price. Purhottam would pay out
60% of audit fees to Duryodhan that too in cash. Against the 40% share of
Purshottam there was hardly any expenditure, just windfall profit for Purshottam.
So Purshottam having thought over his future financial requirement, accepted the
lucrative offer made by Duryodhan.
Against this backdrop, Purshottam being an honest and law
abiding person, approached Gopal. Purshottam narrated him the modus operandi of
sharing of audit fees with Duryodhan and asked him whether he would be required
to pay any income tax. The moment Purshottam told him that his professional
receipts were likely to cross Rs. ten lacs, Gopal explained him about
maintenance of books of accounts, record and getting them audited by a chartered
accountant u/s.44AB apart from tax liability.
For a week or so Purshottam was musing over the ‘wake up’
call given by Gopal. He checked his audit fees received as per his bank account;
the amount was staggering well above Rs.10 lacs, near about 27 lacs.
So he met Gopal again. He told him his actual professional
receipts would be around Rs.27 lacs whereas his actual expenses would be just
one lac. It was a challenge to Gopal’s conscience and the ethical values he
cherished. Gopal was in dilemma over whether to advise or not to advise
Purshottam about ‘manufacturing’ fake record of expenses like staff salary in
the absence of staff, office rent in the absence of rented office, driver’s
salary in the absence of driver, travelling expenses, etc. to arrive at some
reasonable taxable income. If he did not advise, probably Purshottam would
approach other chartered accountant. He would lose his first ever ‘Tax Audit’ of
his career. On the other hand if he advises Purshottam to ‘manufacture’ fake
record of expenses which would be audited by him, it was a blatant violation of
law and code of conduct of the ICAI of which he was a proud member. Gopal’s
professional career was at stake. Eventually, evil-mind prevailed over his
conscience. He advised Purshottam to create fake record of expenses for the
purpose of ‘tax audit’. Gopal convinced Purshottam that there was no option but
to create fake record of expenses of a huge amount. Purshottam was repenting on
his decision to accept the offer of Duryodhan just for greed of money. Gopal
also confessed to Purshottam that whatever he was asking him to do was not
ethically correct.
Purshottam arranged record for all those expenses as
suggested by Gopal. Gopal conducted tax audit and submitted tax audit report
with the return of income of Purshottam. Nothing went wrong from income tax
point of view, I mean Purshottam’s case was not selected for scrutiny, since
nothing was illegal prima-facie.
Now Vikrambhai my questions to you : who is being protected
by the act of Gopal and Purshottam ? How do you define the conduct of Gopal and
Purshottam ? And how do you differentiate between Gopal, Purshottam and
Duryodhan character-wise ?
“Vetalbhai, first, Gopal and Purshottam were protecting Duryodhan, the corrupt government officer. Secondly, on the part of Gopal and Purshottam, it was breach of conscience but within the framework of law. That is what happens the world over. Thirdly, I would differentiate Gopal, Purshottam and Duryodhan as “the bad, the worse and the ugly” respectively. Gopal and Purshottam were in need of money whereas Duryodhan was in greed of money”
“Vikrambhai you broke the silence, I am vanishing”. Again Vetal’s laugh was echoing in the grave-yard.
