Vijay V Meghani vs. DCIT (ITAT Mumbai)

DATE: (Date of pronouncement)
DATE: September 5, 2014 (Date of publication)

Click here to download the judgement (vijay_meghani_CA_falling_standards.pdf)

ITAT laments severe fall in standards of CA profession. Advices ICAI to take disciplinary proceedings against erring members & tackle issue on war footing

The assessee filed appeals for AY 1994-95 & 1996-97 which were delayed by 2984 days. In support of the application for condonation of delay, the assessee claimed that his CA, M/s Rajesh Rajeev Associates, had advised him that as he had already filed an appeal for AY 1993-94 on the same point, which was pending before the Tribunal, he need not file appeals for AYs 1994-95 & 1996-97 and, instead, he could, after adjudication of the appeal for AY 1993-94 by the Tribunal, move a rectification application before the AO to bring the assessment order in conformity with the decision of the Tribunal. The CA filed an affidavit in which he confirmed having given the said advice. In the condonation application, the assessee pleaded that he ought not to be made to suffer for the “incorrect” advice given by the CA. HELD by the Tribunal dismissing the application and the appeals:

(i) The advice given by the CA firm shows signs of deteriorating standards with some of the Chartered Accountants in profession, which needs to be stopped on war footing by the ICAI. 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 C.A students to have strong grip over the subjects and also to attain expertise in them… In the recent past, the methodology of self study is given a go-by by some 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 spoon-feeding, 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;

(ii) In this back ground, in our view, the above said C.A. firm would have given the letter as well as the affidavit only to accommodate the assessee herein. We would like to mention here that we have come to such a conclusion, since a qualified C.A. firm would not commit such kind of silly mistakes while giving expert professional advice. If the C.A. firm has so accommodated the assessee, without even realising that it is detrimental to its reputation, then the conduct of the C.A. firm needs to be condemned strongly. In that case, we are of the view that the above said conduct of the C.A. firm not only denigrates its name/ reputation, but also badly affects the high standards, confidence, quality, prestige, reputation etc. enjoyed by the C.A. profession;

(iii) The advice claimed to have been given by M/s Rajesh Rajeev Associates, Chartered Accountants, if considered to have been really given, would create doubt about the efficacy of the CPE programmes, since such kind of advices is not expected from a Professional. Further these kind of advices claimed to have been given by a C.A firm clearly give signals that the CPE programmes might have failed to achieve the desired objectives with some of the Chartered Accountants. It is high time that the ICAI should take note of these practicalities and should take corrective steps in order to maintain/restore the high standards and quality expected from a C.A. professional. We have also expressed the view that the above said C.A firm might have given the affidavit only to accommodate the assessee, which conduct is also not expected from a Professional. If it is considered that the C.A firm has colluded with the assessee for giving such kind of affidavit, then it only warrants disciplinary action against them. Even, if it is considered that the said C.A. firm has really given such advices, then also it may require disciplinary action against them for giving such kind of advices, without proper verification of facts and without proper consideration of law. In our view, strict actions and fast disposal of disciplinary proceedings would not only instill discipline among the C.A fraternity, but also help curtail these kind of undesired practices adopted by some of the Chartered Accountants.

Note: The Ld. Accountant Member who wrote the judgement is a F.C.A., D.I.S.A., I.C.W.A., (Inter) & A.C.S.(Inter)
20 comments on “Vijay V Meghani vs. DCIT (ITAT Mumbai)
  1. Ashwani Joshi says:

    Hon’ble ITAT is the final fact-finding authority.

  2. bpcchennai says:

    It’s unfortunate that the ITAT has to condemn the entire CA profession for acts of one Firm. I think it’s very excessive. The judiciary over looks various unethical and false advice given by lawyers where as they choose to lament the entire profession for one single innocent advice. The CA concerned might have been ignorant of law regarding appeal filing procedure but that does not make entire profession in competent.

    It’s unfortunate that an accountant member who is from the same profession has to write such nasty order. Hope , some one takes up the case and they may have review of the observation made.

    Thanks and regards
    B. S. Purshotham

    • R Swaminathan says:

      I think the second part of the comment that the ‘CA might have been ignorant’ is what made the honourable bench make the comments.
      More than defending the CAs and accepting that this is an one off matter, aspersions have been on the entire judiciary by saying that others(lawyers) also do similar things but they are not pulled up.

      • why you want ITAT to defend CA. Sorry, Shows you might be one such wonderful CA! See my dear friend you have to take care of your client per contract of service, after all all laws are based on laws of contract including the constitution of India, under rules of equity and natural justice.

        No law is given by God as divine dispensation.

        if you fail your assessee client there definitely breach of contract with a lakshmana rekha that you shall do every thing under laws of morality and ethics!

        where do u find in the CA here. sorry, may be he is ignorant of laws of practice. Fact is CA definitely is no big advocate of law, you cannot say he is a great advocate in laws of jurisprudence.

        May be he may have an LL.B or some such degree that does not make him an expert in law. Even regular practicing lawyers fail the test of law.

        Wisdom is if you do not properly know laws then better ask your assesee to consult regular well versed lawyers, Why does he assume he is the last word in laws, that can be seen when he filed an affidavit that he had advised so!

  3. I agree. see i was told in one case CA even does not know implications of limitation prescriptions in sec 143 too. indeed sad, may be some collusion is obvious somewhere even with departmental officers too just because these CAs income depends on department giving a lot of tax audit work might be the reason.

    Any way situation os awesome!

  4. if some did wrong that cannot be your precedent is the like the lighting a candle in darkness!

  5. Ramesh says:

    Does itat has the power to make such adverse comments uppn the reputed profession and organization? Even if the case so condemnable, in my opinion , the right path should have been followed ie- the ASSESSEE must go to sue a disciplinary action against the member.

  6. parantap chandurkar says:

    While one agrees with the comments and strictures passed by the learned authority against the firm in particular and the CA profession in general still, in the interest of justice, the assessee should have been given the benefit of doubt by condoning the delay in filing the appeal and should have been heard on merits.

    Parantap Chandurkar

  7. Srivastava says:

    Irony of this decision is that, evenafter taking such harsh comments by CA and fraternity the assessee did not get any benefit. On one hand ITAT observes that CA is at fault then its very clear case that the assessee should be given benefit. There is contradiction in the verdict of ITAT.

    Nevertheless, ITAT’s observation was excessive and unwarranted.

  8. A reader says:

    Lets not forget that restraint is a virtue- for those on the bench and equally for those in the noble professions of law and accountancy.

  9. u cannot ever restrain the bench when it is called upon to judge on consequences caused of by revenue sor

  10. reader is kindly misplaced kindness is dangerous under all circumstances!.

  11. Ganesh Datta says:

    Its a gross negligence on the part of CA who has advised , the client should also file case in consumer court for deficiency of service. In fact ITAT comment on CAs quality should be taken in right sprit , as with recent rise in fiasco namely NSEL , Satyam,global trust bank cases to name , and not as mere hand wash as comment not pointed to their profession since it was general comment.Such kind of comment does not go down well on the eyes of common public and working professional we expect some expert advise on the taxation as we pay for it , if they cannot give then whats the use of paying for them. In fact the IT- saral is so simple ,self made and easy i dont need to pay 300 of colleague paid 600 rs to fill wrong assessment year from 16 via a CA, then for ratification he has to pay again 200 rs. is this a new tactic to generate revenue in tight competition market.And we have no disciplinary action on auditor , internal auditor for the above cases so far.Many of my friends have skipped the mandatory practical training by getting stamp from their uncles or relatives to save a year.But 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, analytic ability etc. and they enable the C.A students to have strong grip over the subjects and also to attain expertise in them. who cares to verify it….Get up and roll over the sleeves to improve the quality … if at all the comment is not made on fraternity but take this on your self

  12. jagdish says:

    Projecting as the ITAT is all that perfect.
    What has the ITAT done on the strictures passed by higher Courts on the poor quality of orders passed by Memebers of ITAT.
    Let them stop the blame game and work together to ensure Justise.

    • whether ITAT is perfect or not, ICAI need to be perfect if not it loses its credibility one should clearly understand; lf not tings would soon become out of control, people would not accept CAs for ever!

  13. Ahmed Badat says:

    Judge crossed his limits by unnecessary dragging the entire ca community for one person fault. It is unfair and institute should take steps to get the remarks expunge as it was made out of context.

  14. as long one is good in profession why worry about others in your profession?

  15. natarajan t.g. says:

    By the same logic what about the IRS officers who for meeting their departmental targets indulge in unneccessary additions and disallowance of expenditure on even well settled items, their own tribunal, appellate and in some case by Supreme Court judgements. The problem with judiciary as well as those who sit on as judges, go beyond what is required to be decided / judged. In the instant case the matter was whether the delay merited condonation or not! Beyond that the Learned Accountant Member had no business to comment on the professional standards as the appellate tribunal had no jurisdiction on the said matter. It was for the client to complain against the deficiency in service by the CA to ICAI.
    This has been the bane of our courts and tribunals, where they find fault with everything and everyone except their own house! So much of litigation in courts and tribunal can be weeded at the lowest level if the well settled case laws and judgements are accepted and respected!

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