ITAT comment against CA profession was out of sheer desperation & frustration-Bombay HC strongly criticises ITAT

ITAT comment against CA Profession was out of sheer desperation & frustration. Bombay High Court strongly criticises ITAT for its observation made against the CA profession.

ITAT comment against CA profession

ABCAUS Case Law Citation:
ABCAUS 2091 (2017) (10) HC

Approximately three years back in 2014, ITAT Mumbai had made a remark on the CA profession. The remarks of the Tribunal had generated lot of heat amongst the chartered accountants/other professionals. Later, in 2015, on the intervention of the Institute of Chartered Accountants of India (ICAI) , the Tribunal though dismissed the miscellaneous application, had modified the para 9.6 of its order.

For a quick reference, the both original and modified paras were read as under:

Observation as per original order Observation as per modified order

However, if it is considered for a moment that the above said C.A firm has really given such advice to the assessee herein and accordingly it has furnished the letter and affidavit, then, in our view, it may be showing signs of deteriorating standards with some of the Chartered Accountants in profession, which needs to be stopped on war footing by the ICAI. We have already noticed that the assessee is having connection with many tax professionals and in all probabilities, the assessee might have had consultation with any one or more of them on the impugned problem. It is inconceivable that all the Chartered Accountants, whom the assessee might have had consultation or availed services, would have concurred with the view expressed by the above said C.A firm. If it is presumed for a moment that all the C.A.s have concurred with the said view, then it only shows that the C.A profession is losing its grip over the Income tax matters, which is another cause of concern for ICAI. The self study model coupled with ‘on-site articled clerk training’ embedded in the Chartered Accountancy course aims to achieve high quality education and training through undergoing practical training, inculcating the habit of thinking, self introspection, application of mind, analytical ability etc. and they enable the CA students to have strong grip over the subjects and also to attain expertise in them. The commendable feature of the C.A course is that, as stated earlier, the C.A students are trained by the practicing Chartered Accountants during their articled clerk training program. Thus, the methodology adopted by the ICAI enabled the C.A. students to become a thorough professional with versatile knowledge and innovative mind. We notice that, in the recent past, the methodology of self study is given a go-by by some of the C.A students and they have started depending more and more on the Commercial Coaching Centers, who undertake coaching of various subjects in the class room model. We notice that the ICAI does not appear to have taken steps to contain mushrooming growth of such coaching institutes, which indulge in manufacturing of Chartered Accountants through class room model, which may ultimately have undesirable effect on the quality of Chartered Accountants, since the habit of thinking, introspection, application of mind is replaced by spoonfeeding, which kind of teaching discourages independent thinking. There should not be any controversy on the fact that the Chartered Accountants, till date, have occupied pioneer position vis-à-vis their counterparts in other parts of the World. They also contribute a lot to the building, sustenance and growth of our National economy. Any compromise on the quality of Chartered Accountants would not only affect our Country very badly, but is also expected to endanger the pioneer position enjoyed by the Indian C.A fraternity vis-à-vis their counter parts in other parts of the world. In our view, the ICAI should seriously take note of these alarming practices slowly emerging in our Country and should take appropriate corrective steps, lest the confidence reposed in C.A.s by the public should get diluted.

However, if it is considered for a moment that the above said C.A. firm has really given such advice to the assessee herein and accordingly it has furnished the letter and affidavit, then it is a cause of concern to one and all. We have already noticed that the self study model coupled with „on-site articled clerk training‟ embedded in the Chartered Accountancy course aims to achieve high quality education and training . The articled clerk training conceptualized in the C.A education inculcate the habit of thinking, self introspection, application of mind, analytical ability etc and they enable the C.A students to have strong grip over the subjects and help achieving expertise in the domain fields. The commendable feature of the C.A Course is that, as stated earlier, the C.A students are given training by practicing Chartered Accountants during their articled clerk training program. Thus the methodology adopted by the ICAI enables the C.A. students to become thorough professionals with versatile knowledge and innovative mind. The practical training given by the practicing Chartered Accountants during the articled clerk period, in our view, is the fulcrum centre of the study module of the C.A course and the students pursuing the C.A course should and must utilize the opportunities provided to them or encountered by them during the articled clerk training period to the maximum possible extent. In the recent past, a number of Coaching institutes have been established to give coaching to the students pursuing C.A course. While the self study model and articled clerk training may be supplemented with the coaching given by such institutes, any compromise on the practical training intended during articled clerk period or mere obtaining a C.A degree without practical training would not make the students full fledged chartered accountants and the same would go against the self study model conceptualized by ICAI and there should not be any doubt that it may have undesired results, which may affect the Country as a whole.”

Not agreeing with the remarks of the ITAT, I had written that on many occasions, even the decisions of Tribunals had been reversed by the High Courts for the mis-interpretation and/or wrong application of law. But it could never put a question mark on the competence of the Tribunals. On the same analogy, even if one CA had done something which ITAT considered as not up to mark, it could not have made a general remark on the entire CA profession.

As pointed out, the Hon’ble Bombay High Court in its recent judgment, has strongly criticised the Tribunal on its observation made against the CA profession. Allowing the appeal of the assessee against the order of the Tribunal , the Hon’ble High Court had abcaus.in observed that the ITAT out of sheer desperation and frustration targeted the Chartered Accountant of the assessee. The Hon’ble High Court termed it very unfortunate that  the ITAT devoted paragraphs after paragraphs on how a CA ought to conduct himself and while advising assessee in  tax  matters and blamed  not only individual Chartered Accountants but also the ICAI. The Hon’ble High Court regretted that it was unfortunate the ITAT which was the fact finding authority  adopted such course.

The Hon’ble High Court further observed that ITAT not only termed the advice given by the CA as  wrong/ absurd but the assessee was also faulted for blindly  accepting  such the advice and was termed as an imprudent man with a behaviour  beyond   the   comprehension   of human  conduct and probabilities.

According to the Hon’ble High Court, the order of the Tribunal did not  meet  the  requirement of law. The Tribunal entirely misdirected itself in taking into consideration such factors which had  no bearing with  the  issue  at  hand.

The Hon’ble High Court condoned the delay of approx 3000 days in filing the appeals  but  on  the  condition  of payment of costs quantified totally at Rs.50,000/­. The appeals were remanded to Tribunal  for adjudication and disposal on merits. 

ITAT comment against CA profession was out of desperation and frustration

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