TaxTMI 
TaxTMI 
2023 (10) TMI 1294
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....al payment challan. Respondent used to tell the Company that the originals were required to be retained by him for assessment. Respondent used to claim reimbursement from the Company in cash for tax payments purportedly done by him on behalf of the Company. Respondent fabricated bogus payment challans by putting forged stamp of Dena Bank, Vile Parle (W) Branch and gave photocopy of the same as proof of payment to the Company. It is also alleged that Respondent fabricated certificates of Sales Tax Authorities showing completion of assessment and sent photocopies of the same as proof thereof. Respondent is further alleged to have collected account payee cheques for making payment of sales tax dues which he misappropriated by depositing in his own bank account. The alleged incident has taken place during the period 1992-1994. 3. Upon receipt of the complaint, the Institute called upon Respondent to send his response and by a written statement dated 16th December 2004, Respondent defended himself firstly by denying each and every allegation against him and referring to the complaint as sweeping, reckless and containing unsubstantiated allegations. He claimed to have an unblemished rec....
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.... The Institute of Chartered Accountants of India is a statutory body created by an Act of Parliament that is the Chartered Accountants Act, 1949. In accordance with Section 9 of the Act, the management of the affairs of the Institute are vested in the Central Council. The Council performs its function through three different standing committees constituted under Section 17 of the Act and various other committees. One of the standing committees of the Institute is the Disciplinary Committee. The function of the Institute is to regulate the provisions of the Act and it is also empowered to take action against its members for any misconduct as contemplated in the Act and relevant regulations framed thereunder. Section 21 of the Act prescribes the procedure to be followed with regard to an inquiry relating to the misconduct of the members of the Institute. Section 22-A provides for filing of an appeal by a member against imposition of penalty. The Act was amended on 8th August 2006 by Act 9 of 2006. However, since the alleged other misconduct relates to the period prior to the amendment, we are concerned with the unamended Sections 21 and 22, which are as under: "21. Procedure in inq....
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....r, the Council and the Central Government an opportunity of being heard, and may thereafter make any of the following orders, namely : (a) direct that the proceedings be filed, or dismiss the complaint, as the case may be; (b) reprimand the member; (c) remove him from membership of the Institute either permanently or for such period as the High Court thinks fit;....." 8. Regulation 13 of the Chartered Accountants Regulations, 1964 ("Regulation") provides for the procedure of an inquiry before the Committee. Regulations 14 and 15 which are relevant for the purpose of this case are as under: "14. Report of the Disciplinary Committee. (1) The Disciplinary committee shall submit its report to the Council. (2) The Council shall consider the report of the Disciplinary Committee and if, in its opinion, a further enquiry is necessary, shall cause such further enquiry to be made whereupon a further report shall be submitted by the Disciplinary Committee. (3) The Council shall, on the consideration of the report and the further report, if any, record its findings. (4) If the finding is that there is no case for passing one of the orders specified in clauses (a) or (b....
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....ittee noted that though complainant was unable to establish that Respondent withdrew money from the bank and altered the names and figures on the cheque and complainant gave money to Respondent to deposit the same against the sales tax liability, yet Respondent gave an undertaking that in case the Company failed to discharge its sales tax liabilities, he shall personally shoulder the same. The Committee went on to observe that no professional such as Respondent will give an undertaking while at the same time denying his involvement in the act of forging the challans. The Committee further accepted complainant's affidavit which confirmed that Respondent has made several payments on behalf of the Company to the Sales Tax Department. On the basis of this evidence and the fact that Respondent failed to give an explanation regarding the circumstances and reasons compelling him to give an undertaking as aforesaid, the Committee held him guilty of 'other misconduct'. 10. Respondent has filed his affidavit in reply and placed on record subsequent events. He states that the trial against him in the criminal complaint by judgment and order dated 5th May 2018 passed by the ACMM, he stands ac....
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....ng of guilt by the Committee and the Council and the consequent penal recommendation of such grave ramification, it is surprising that the Institute took such a long time to complete the procedure of indictment. The attitude of the Institute appears to be completely casual and negligent. The long drawn disciplinary proceedings themselves suggest the lack of seriousness on the part of the Institute to take the procedure against Respondent to its logical conclusion. Respondent is presently 77 years of age and save and except a period of five years for which he himself had surrendered his certificate of practice, he has been professionally active and no other complaint is found to have been made against him. The Institute has offered no explanation whatsoever for the inordinate delay in initiating and concluding the disciplinary action against Respondent. 14. The Supreme Court in its decision in the matter of State of Madhya Pradesh v Bani Singh (1990) Supp. SCC 738. has quashed the charge memo and the departmental enquiry against an officer of the SAF, Gwalior on the ground of inordinate delay of 12 years to initiate departmental proceedings with reference to an incident that took p....
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....ered by the Institute for the inordinate delay of as many as 19 years. Respondent has inasmuch suffered the agony of the sword of Damocles hanging over his head for so many years. In any case, we do not find that the Committee has found any substantial justification in the form of unrebutted evidence against Respondent as much as to hold him guilty to the extent that his name should be removed for a period of one year and Respondent be compelled to face an ignominy of the tag of 'other misconduct' at this stage in his professional career and at an age of 77 years. Moreover, the criminal court after having applied the rigor of 'proof beyond reasonable doubt' principle has also acquitted him. Though the degree of proof required in disciplinary action is much less than a criminal prosecution, it can still be safely inferred that there is a cloud of doubts over the finding of guilt of Respondent. 17. Lastly, we see that even the Council has merely reproduced the report of the Committee without giving its own independent findings. There is neither any analysis by the Council nor any justification recorded to explain the quantum of punishment recommended to this Court. 18. In the decis....