It may be recalled that in Vijay V Meghani vs. DCIT, the ITAT Mumbai has passed severe strictures and lamented the alleged fall in standards in the CA profession. The Tribunal pointed out several factors which, according to it, show “signs of deteriorating standards” amongst Chartered Accountants. The Tribunal also expressed the fear that the CA profession is “losing its grip over the Income tax matters”. The ITAT advised the ICAI to tackle the issues on a war footing so as to bring back the high standards, confidence, quality, prestige, reputation etc. enjoyed by the C.A. profession.
In response to the said order, the Council of the ICAI has issued a statement that the comments made by the ITAT on the profession and functions of the ICAI are not warranted. It is also stated that the “sweeping observations” made by ITAT about the Institute and the profession of Chartered Accountancy in a matter relating to a particular tax payer, are out of context.
The Council has stated that it has decided to take steps for expunging the aforesaid remarks made by the ITAT against the CA profession.
Text of statement issued by the ICAI:
ICAI initiative on order dated 20th August, 2014 pronounced by a Bench of
Income Tax Appellate Tribunal, Mumbai
Members are aware of the general remarks against ICAI made by Hon ‘ble ITAT Mumbai Bench in respect of its order dated 20th August, 2014 wherein the tax advice given by a member of the Institute had been dealt with.
The above matter was considered by the Council at its meeting held on 15th September, 2014.
The Council unanimously felt that the comments made by the Hon’ble Bench on the profession and functions of the ICAI were neither warranted as no facts relating to the profession were before the Hon’ble ITAT nor was any opportunity given to ICAI in the said matter. The Council felt concerned that based on the opinion given by one of the members, general comments have been made in respect of the standards of the entire profession. The Council is of the view that the sweeping observations made by ITAT in the order about the Institute and the profession of Chartered Accountancy in a matter relating to a particular tax payer, are out of context.
The Council is conscious of its responsibility to regulate the conduct of its members. Whenever the Institute come across with any lapse(s) with regard to the conduct of any member, the same is appropriately dealt with under the disciplinary mechanism of the Chartered Accountants Act, 1949 and the Rules framed.
The Council reiterates its respect for the judicial system in the country including the Income Tax Appellate Tribunals. However, the Council has decided to take up the instant matter with appropriate/respective authorities, for expunging the aforesaid remarks made against the profession.
The outcome of the steps taken by the Council will be apprised to the members from time to time.
I will agree with the ITAT, if the Member had condoned the delay and accepted the appeal of the Appellant. He could pass strictures only when the CA is found guilty. When the CA is guilty, the benefit should be extended to the appellent. Having stopped short, the comments are unwarranted.
I tend to second The Observer; ITAT is a quasi-judicial legal forum-that should be kept in mind; Expunging may be more prevelant in Parliamentn – which is used to various unwanted / unwarranted remarks, out of il-education / illeterate so called law-makers; ICAI need to keep its esteem high without such provoked remarks / issues;
Simple solution to the matter would have been a statement like “noted for future guidance” and a communication to the concerned CA to be careful in future.
I don’t know what is the legal procedure for expunging the remarks under the Income Tax Act. It is not a mistake apparent from the record which can be rectified u/s254. Taking such a stand is again another mistake of ICAI.
Thank u Mr. Parth for ur comments. Further since u have contradicted urselves, I need not to make any comment on the point of competency, however, I may assure u that I have no grudge against C.A(s), but will u trouble to tell as to whether the affidavit filed by the C.A. before the Hon’ble Tribunal was relating to audit work of advice relating to legal provisions.
If CA is a recognised creation of I T Act u/s 44AB, what is the relevance of his Audit Report ? Generally, it remains a bunch of papers FORMALY complying with provisions of 44AB and nothing beyond, as the scrutinising Assessing Officer hardly relies on the contents of Form 3CD while opining to disallow audited expenses etc.; Should ICAI not create respect to its Reports under I T Act, thereby SAVINg valuable time of I T Os. in further scrutiny of such audited accounts ? Jai Shree Ram !
With due respect I wish to submit that the argument of learned Adv. I.S.Verma is wholly misplaced and misconstrued. The Courts have umpteen times held that the authorities right from AO to ITAT are merely fact finding bodies. And as far as the accounts are concerned who could be better than a Chartered Accountant? None of the lower authorities are entitled to interpret law or test the law on the touchstone of the Constitutional provisions therefore the law that is to be argued before these authorities is very basic and could not be dubbed as the exclusive domain of the advocates. When it comes to interpretation of law it is the advocates who alone represent the assessees before the High Court and the Supreme Court and thus should not nurture any grudge against the CAs. Competence is not a group attribute but a personal trait.
ALL LEGAL LUMINIARIES SHOULD HAVE TO GO THROUGH THE SAYS OF ADVT.I.S VERMA SAID. NO ANYKIND OF INTRUTION BE ALLOWED IN ANY JURISDICTION.
Although being a Chartered Accountant, I totally agree with the ITAT Bombay, more particularly the quality of CAs produced for the last 20 Years.
The Order by the Hon. Tribunal, must be seen as an eye opener to the profession at large.
Before getting elevated to the bench, the member was one among the profession and would have seen high standards of the profession, might have had rich experience in giving training to student . with this back drop he might have made some observation after sharing his thoughts with the other Learned Member. The order must be seen as the order of the Bench but not that of only Accountant Member. It was all praise for the Institute’s standards , mode of training and the methodology.
The booming growth of commercial institutes/ coaching institutes, who teaches in class rooms, is becoming serious blow to the profession. They teach in exam orientation mode. No action has been taken by the Institute on conduct of the members, whose students were studying there. Is it not with in the knowledge of Institute. The Commercial centers boast themselves of achieving ranks in the examinations.
The order must be seen in right direction and time to correct. I find nothing wrong in the order. May be its my personal opinion.
Profession of C.A(s) is only to deal with accountancy, audit and other financial matters. As Hon’ble Delhi High Court had dismissed a writ petition (where an Adv. had pleaded that Advocates should be allowed to carry audit u/s 44AB of the I T Act), on the ground that audit work is the sole domain of C. A’s profession and advocates can’t be allowed to carry audit, may I submit that based on the same analogy and to avoid such contraversy in future, dealing with the matters relating to Law(s) and pleading is the sole domain of Advocates and therefore, the Hon,ble ITAT , other Hon’ble Tribunals, the Finance Ministryand the CBDT should amend the Rules and Law and prohibit C.A.(s) to appear before appelate authorities, Tribunals in matters relating to Law (s), -as is the case for appearing before the Hon’ble High Courts and the Hon’ble Supreme Court.
ICAI RESOLUTION IS INDEED OUT OF PLACE. ACCOUNT MEMBER IS AN FCA.
ICAI NEED TO CORRECT ITSELF ELSE OT SOUNDS LIKE SUPPORTING WRONGDOERS IN PROFESSION, I CAME ACROSS A CA NOT KNOWING TAX LAW REPRESENTED A CLIENT WHAT THE I X A I HAS TO SAY !
I AGREE WIT ]H ITAT OBSERVATION. THERE IS NO NEED TO EXPUNGE BY ITAT
The quality of judgments of the Tribunals across the country has been a subject matter of concern for the jurists and the higher Courts. In the context of the present issue let us expect that the Tribunal itself will indulge in introspection.
I beg to differ. Unfortunately for ICAI what the Hon’ble ITAT has said is undeniable truth and fortunately for ICAI someone other than them has helped them to maintain the dignity of the profession