Income Tax Department: 11 CAs guilty in fake political donation case; Major decision of ICAI Disciplinary Board

• Notice under the Act on Chartered Accountants
• Warning and strict action from ICAI
• 11 Disciplinary action against Chartered Accountants

Income Tax Department: ICAI Disciplinary Board has taken a big decision 11 CA found guilty in fake political donation case. The Disciplinary Board of the Institute of Chartered Accountants of India (ICAI) has held 11 chartered accountants in Ahmedabad guilty of professional misconduct in connection with an alleged bogus political donation racket unearthed by the Income Tax Department. In its recent orders, the Board found him guilty of ‘other misconduct’ under the First Schedule of the Chartered Accountants Act, 1949 and contemplated action under Section 21A (3) of the Act.

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However, after hearing their arguments, the board reprimanded them. In its order, the board said that the Income Tax department has not initiated any reassessment process against the concerned political parties nor initiated any action against them. Considering the arguments presented by the Chartered Attorneys (CAs) who sought a sympathetic approach and assured that such conduct would not recur, the Board ordered the reprimand.

After considering the facts of the case, where the Income Tax Department did not conduct any reassessment or initiate any action against the concerned political parties, as well as the resulting misconduct of the Chartered Accountants and their representations to the Board, the Board decided to reprimand them. The board also found that the chartered accountants retracted their 2021 statement through affidavits in 2023, almost two years later.

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The board noted that it stood by its original statements for a long time and sought to retract them only when disciplinary action was likely. The case relates to search and seizure proceedings under the Income Tax Act, 1961, conducted in February 2021 against three political parties and two charitable organizations in Ahmedabad.

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