Disciplinary proceedings against CA for wrong certificate with manipulated figures quashed by Supreme Court. No material was on record to establish charges
ABCAUS Case Law Citation:
ABCAUS 2000 (2017) (07) SC
Brief Facts of the Case:
ICAI took disciplinary action against a chartered accountant for issuing certificates for consumption of raw materials showing the value of imported raw material as CIF value to the units without seeing the records since imported value of the raw materials should have been shown as value of the raw materials and not the CIF value. Also in view of the Disciplinary Committee of ICAI, the units did not maintain any record for past production, still the certificates were issued showing that the figures were manipulated and the certificates issued were not correct.
Thus, the Disciplinary Committee held that the Respondent CA while issuing the certificates to the units had failed to obtain sufficient information to warrant the expression of his opinion and found him guilty of professional misconduct within the meaning of Clauses (7) and (8) of Part I of the Second Schedule to the Chartered Accountants Act, 1949 read with Sections 21 and 22 of the said Act.
The matter was thereafter placed before the Council of the Institute of Chartered Accountants of India (‘Council’). The Council, after considering the submission of the CA agreed with the findings of Disciplinary Committee and decided to recommend to the High Court that the Respondent be reprimanded.
However, the Bombay High Court set aside the findings of fact recorded by the Disciplinary Committee.
Observations made by the Supreme Court:
The Hon’ble Supreme Court observed that the High Court had considered the statements made on behalf of the CA to hold that there was no material on record to establish that the units had paid an amount more than what was mentioned in the CIF value or purchase vouchers and merely because the sellers from whom the units had purchased the goods had imported the same, it did not mean that the units in question had paid the custom duty. Thus, no adverse inference could be drawn against the Respondent on this ground.
It was further observed that regarding non-maintenance of books of accounts by the units the High Court had held that it is also without any substance as the only witness examined before the Disciplinary Committee had stated that the books and the record are available at Bombay. Neither the complainant nor the Disciplinary Committee chosen to call for those books of accounts and, therefore, no adverse inference can be drawn against the Respondent on this ground.
The Appeal was dismissed.