CA issuing Form 15CB not required check genuineness of documents submitted

Chartered Accountant issuing Form 15CB not required check genuineness or otherwise of documents submitted by his clients – Supreme Court dismissed SLP

In A recent judgment, Hon’ble Supreme Court has dismissed SLP against the judgment of Madras High Court which held that Chartered Accountant issuing Form 15CB is not required to go into the genuineness or otherwise of the documents submitted by his clients

ABCAUS Case Law Citation:
4852 (2025) (11) abcaus.in SC

In the instant case, one individual opened a bank account in the name of some persons in Bank and presented some import documents to the Branch Manager, requesting him to transfer foreign exchange to certain entities abroad.

The Branch Manager having a doubt sent those import documents to the Principal Commissioner of Customs for verification. The Principal Commissioner of Customs found that most of them were forged ones. The matter was thus referred to Enforcement Directorate.

Initial investigation revealed that large amount was sent out of India through seven banks to fictitious entities abroad. During investigation, the Enforcement Directorate found some Form 15CB that were issued by a Chartered Accountant (CA/Auditor). The auditor revealed that one of his clients had approached him for issuance of Form 15CB under Rule 37- BB of the Income Tax Rules, 1962, and submitted documents in support of his request; accordingly, he on the strength of the said documents had issued certificates to the effect that it is not necessary to issue Form 15CB in respect of overseas payment of imports

However, the ED after completing the investigation filed supplementary complaint in which the said CA, was arrayed. The discharge Petition filed by the CA before the Trial Court was dismissed. As a result, the CA approached the Hon’ble High Court by way of filing a Revision Petition.

Before the Hon’ble High Court, the ED contended that there were prima facie materials against the CA for the trial to proceed further. It was submitted that in this case the Chartered Accountant had travelled beyond the professional scope, ethics and value and in the process issued the Form – 15CB in the name of an entity using the PAN number and photo identity two different persons and ultimately facilitated the money mule, to operate the account through seven AD Banks to send foreign exchange without disclosing the identity of the beneficial owner and end-use.

It was submitted that the CA was deeply involved in the scam and it was no way connected within the scope of professional services as a chartered accountant and therefore the criminal revision petition was liable to the dismissed.

The Hon’ble High Court observed that the plea that mere issuance of five numbers of Form 15CB at the request of client would not, by itself, bring him into the net of conspiracy to indulge in money laundering, merits acceptance.

The Hon’ble High Court opined that it was clear that the said CA had received a meagre fee for a certificate without anything more. That apart, he had helped the Enforcement Directorate to identify accused who was the mastermind of the whole operation and therefore, CA would be the best witness for linking various accused.

The Hon’ble High Court further observed that perusal of Form 15CB showed that a Chartered Accountant is required to only examine the nature of the remittance and nothing more. The Chartered Accountant is not required to go into the genuineness or otherwise of the documents submitted by his clients. This could be compared with the legal opinion that are normally given by panel lawyers of banks, after scrutinizing title documents without going into their genuinity. A Panel Advocate, who has no means to go into the genuinity of title deeds and who gives an opinion based on such title deeds, cannot be prosecuted along with the principal offender.

Applying the above analogy, the Hon’ble High Court opined that the prosecution of Chartered Accountant, in the facts and circumstances of the case at hand, could not be sustained.

As a result, the Hon’ble High Court allowed the Criminal Revision and the order passed by the Additional Special Court for CBI was set aside and the CA was discharged from the prosecution.

Not satisfied with the judgment of the High Court, the Enforcement Directorate challenged it before the Hon’ble Supreme Court by way of filing a Special Leave Petition. However, the Apex Court dismissed the SLP with the following observations;

“we find no reason to interfere with the impugned order. The Special Leave Petition is dismissed.”

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