Pr. Director Of Income Tax (Investigation), Sadar, Nagpur v. The Institute Of Chartered Accountants Of India, New Delhi, And Another

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR Writ Petition No.7428 of 2017 Pr. Director of Income Tax (Investigation), Sadar, Nagpur Versus The Institute of Chartered Accountants of India, New Delhi, and another. Office Notes, Memoranda of Coram,appearances, Court's orders or directionsCourt's or Judge's ordersand Registrar's order Shri Anand Parchure with Shri Ram Heda, Advocates for Petitioner.Shri Sunil Manohar, Senior Advocate, assisted byShri H.V. Thakur, Advocate for Respondent No.1.Shri M.G. Bhangde, Senior Advocate, assisted byShri S.V. Bhutada, Advocate for Respondent No.2. Coram : R.K. Deshpande & S.M. Modak, JJ.Dated : 12th March, 2019 1.The respondent No.2- Anand Shyamsundar Daga,a Chartered Accountant, is punished by the Institute of CharteredAccountants of India with an order of reprimand and fine ofRs.1,00,000/- payable by him within a period of sixty days from thedate of receipt of the order. It is in relation to his conduct in theproceedings before the Income Tax Department. Hence, theDepartment of Income Tax is before this Court seekingenhancement of punishment of debarment of the respondent No.2from the profession of Chartered Accountant. 2.Shri Parchure, the learned counsel appearing for thepetitioner- Department, submits that the procedure prescribed forimposing punishment has not been followed. The act ofmisconduct complained against the respondent No.2 falls under theSecond Schedule, whereas it is classified as one falling under theFirst Schedule of the Chartered Accountants Act, 1949, which is 1203wp7428.17.odt erroneous. According to him, there should have been a punishmentof permanently debarring the respondent No.2 from practising theprofession. 3.If we accept the contention of Shri Parchure that theprocedure prescribed for imposing an order of punishment and finehas not been followed, we will have to set aside the said order andremand the matter back to the respondent No.1 for freshconsideration in accordance with law. The question as to whetherthe act of misconduct complained of falls under the First Scheduleor the Second Schedule of the Chartered Accountants Act, 1949 is adisputed question. Again, the question as to whether thepunishment imposed upon the respondent No.2 is proportionate tothe act of misconduct alleged against him, is required to be judgedby the Board of Discipline. We, however, fail to understand thelocus of the petitioner- the Department of Income Tax to challengethe action of the respondent No.1. Merely because the respondentNo.2 is punished on the basis of the complaint of thepetitioner- Department, in our view, would not make theDepartment as a person aggrieved to challenge it and seekenhancement in the punishment by way of debarring therespondent No.2 from practising the profession of CharteredAccountant. 4.The subject of misconduct on the part of the professional iscovered by Chapter V of the Chartered Accountants Act, 1949.Section 21A(3) thereof being relevant, is reproduced below : “21A. Board of Discipline. … … ... (3) Where the Board of Discipline is of the opinion that amember is guilty of a professional or other misconductmentioned in the First Schedule, it shall afford to themember an opportunity of being heard before making anyorder against him and may thereafter take any one or moreof the following actions, namely:- (a)reprimand the member; (b)remove the name of the member from theRegister up to a period of three months; (c)impose such fine as it may thinks fit which mayextent to rupees one lakh. 4.The subject of misconduct on the part of the professional iscovered by Chapter V of the Chartered Accountants Act, 1949.Section 21A(3) thereof being relevant, is reproduced below : “21A. Board of Discipline. … … ... (3) Where the Board of Discipline is of the opinion that amember is guilty of a professional or other misconductmentioned in the First Schedule, it shall afford to themember an opportunity of being heard before making anyorder against him and may thereafter take any one or moreof the following actions, namely:- (a)reprimand the member; (b)remove the name of the member from theRegister up to a period of three months; (c)impose such fine as it may thinks fit which mayextent to rupees one lakh. 5.Perusal of the order impugned, more particularlyParagraphs 11 and 12, clearly shows that considering the facts ofthe case, the consequent misconduct on the part of the respondentNo.2 and upon consideration of the written and oral submissions,the Board of Discipline has taken a view that the ends of justiceshall be met if reasonable punishment is awarded to the respondentNo.2. Accordingly, the punishment of reprimand and imposition offine of Rs.1,00,000/- is considered to be reasonable by the Board ofDiscipline in exercise of its power under Section 21A(3) of theChartered Accountants Act, reproduced above. We are not sittingin appeal over the decision of the Board of Discipline and,therefore, on merits also, we do not find that a case is made out forclaiming debarment of the respondent No.2 from practising the profession of Chartered Accountant. 6.Be that as it may, it is conceded before us that in theprosecution initiated by the petitioner- Department against therespondent No.2, if the conviction is recorded, the respondent No.2would certainly be debarred from practising the profession ofChartered Accountant. It is, therefore, open for the petitioner-Department, as a Prosecutor, to bring home the guilt of therespondent No.2 in accordance with law. Any observation by thisCourt in the present order shall not come in the way if suchconviction is recorded. 7.The writ petition is dismissed. (S.M. Modak, J.) (R.K. Deshpande, J.)