Chartered Accountant held guilty of misconduct for arranging bogus bills and charging commission

CA held guilty of misconduct for arranging bogus bills and charging commission. CIT (A) had upheld the addition of commission in the hands of CA

 ABCAUS Case Law Citation:
ABCAUS 2459 (2018) 08 AA

The appellant chartered accountant (CA) was held guilty of by the Institute of Chartered Accountants of India (ICAI) under Clause (10) of Part-I and Clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949 (the Act) and awarded punishment of removal of his name from Register of Members for a period of one month besides a fine of Rs. 50,000/-.

The allegation against the appellant CA were that he had been involved in arranging bogus bills, accommodation entries and circular transactions for trading through bank LC limits for various parties and had charged commission for arranging accounting entries.

Before the AA, the CA submitted that he was not given adjournment and proper time to submit evidence and defend his case. However when asked to file any new evidence and raise any argument before the AA, no new evidence or argument was brought by the Appellant.

The Appellate Authority (AA) noted that all cheque books of the said bogus concerns were lying with the Appellant and the said bogus bills were made on the computer of the Appellant. Also, the Appellant himself in a statement given before the Income Tax Department had admitted that he had arranged bogus bills for commission and the said statement remained uncontroverted. The CIT (A) upheld the addition of said commission in the hands of the Appellant and no evidence that the matter is pending before the Tribunal or decided in favour of the appellant was produced except that it was said that the appeal was pending. However, even of appeal was not filed before the AA.

Regarding the contention that the statement recorded by the Income Tax Department was under coercion. However, when asked for the last Nine years why he had not retracted or disputed the same, no answer was given by the Appellant.

It was also observed that the appellant, on the charges of commission, himself categorically admitted it in the written statement. The Appellant had even accepted his guilt during the proceedings before ICAI.

The AA observed that even before it the appellant CA had admitted that he had taken the commission but it was taken by him as a trustee on behalf of various contractors, which, was totally untenable. Further, the allegation of the Appellant that the Board of Discipline relied on statements of other persons or on documents not before it, was also not true as the Board of Discipline had relied only on the statement of Appellant himself and the aforesaid Order passed by the CIT (A) and the veracity of these documents had not been disputed by the Appellant anywhere and at any stage of the proceedings of this matter.

The AA opined that when the Appellant had himself admitted charging commission at every stage of proceedings, there is no scope to challenge the findings and the Order passed by the Board of Discipline.

The AA held that the Appellant CA was undoubtedly involved in arranging bogus bills through dummy concerns and charged commission for the same and therefore he was rightly held guilty under the aforementioned clauses for committing the Professional and Other Misconduct by the Board of Discipline of the Institute of Chartered Accountants of India.

The AA dismissed the appeal filed and also declined to reduce the punishment awarded

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