THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA vs. SHRI G GIRISH

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 21ST DAY OF JANUARY 2016

PRESENT

THE HON’BLE MR.JUSTICE N K PATIL

AND

THE HON’BLE MRS.JUSTICE S SUJATHA

CP No.91/2013 BETWEEN

The Institute of Chartered Accountants of India ICAI Bhawan P.B.No.7100, I.P.Marg New Delhi-110 002.

...Petitioner

(By Sri. S.Sriranga, Advocate for M/s.Just Law Associates and K.S.Bheemaiah-CGC)

AND

Shri G. Girish Chartered Accountant 64, 8TH B Main, III Block Jayanagar Bangalore-560011

….Respondent

( Vide order dated 23.09.2015 – Service of Notice held Sufficient)

This Petition is filed under Section 21(5) of the Chartered Accountants Act 1949, praying to pass necessary order in accordance with Section 21(6) of the said Act.

This Petition having been heard and reserved for Orders on 14th January 2016, coming on for pronouncement of Judgment this day, S.Sujatha J., made the following:

ORDER

This civil petition is filed by the petitioner under Section 21(5) of the Chartered Accountants Act, 1949 (hereinafter referred to as the ‘Act’ for short) in the matter of recommendation of the Institute of Chartered Accountants of India (‘Institute’ for short) in respect of the respondent.

On a perusal of the news report published in “Free Press – Journal” dated 26.8.1995 and a letter dated 05.01.1996 received from the Office of the Addl. Director of Income Tax, Bangalore, Institute found that the respondent is guilty of creating false TDS certificates using fake rubber stamp of existing and non-existing concerns including State Government and Central Government Departments, banks etc. Further the respondent filed returns in the names of fictitious assesses by attaching TDS certificates and then claimed refund of the same personally by bribing the postman to ensure that the refund orders did not return back undelivered. The said cheques

3 were encashed by operating accounts in various banks under fictitious names. 60 rubber stamps were seized consisting of Income Tax Department, PWD and State Bank of Mysore etc. The Respondent also created a fake company in Bombay having its corporate office at Bangalore to print and issue share certificates in an illegal way and created more names to make money by allotting these shares in the name of fictitious persons. The respondent was arrested on charges of claiming fictitious refund to the tune of Rs.20.25 lakhs from the Income Tax Department by creating 96 fictitious assesses to claim refund during the assessment year 1993-94. It is also alleged that the respondent also created a fake driving licence to obtain credit card. Hence a complaint was filed by the Institute based on the news report and letter received from the Office of the Additional Director of Income Tax, Bangalore alleging misconduct on the part of the respondent. A copy of the complaint was sent to the respondent to his written response on 23.8.2006. Despite service of the said complaint, no

4 written statement was filed by the respondent. The Council on 5.10.2008 was pleased to issue a prima facie opinion that the respondent is guilty of “other misconduct” and referred the matter to the Disciplinary Committee to inquire into the same. The Disciplinary Committee issued notices to the respondent to substantiate his explanation regarding the charges framed against the respondent. The correspondence letters addressed to the respondent returned undelivered with postal remark “left”. Moreover the respondent had not paid membership fees to the Institute of Chartered Accountants as required under the provisions of the Act and hence, his name was removed from the list of members due to nonpayment of fees in the year 1997. In view of the above, the Disciplinary Committee decided to proceed with the matter exparte based on the available documents on record.

5 professional misconduct falling within the meaning of Clause 11 of Part 1 of the 1st schedule and “other misconduct” under Section 22 read with Section 21 of the Chartered Accountants Act, 1949. A copy of the Disciplinary Committee Report was sent to the respondent along with petitioner’s letter requesting the respondent to send his written representation, if any, and the said report would be considered by the Council in one of its forth coming meetings and an option was also provided that if the respondent so desires, he might appear before the Council either in person and/or through a member of the Institute duly authorized by him to make his oral submissions. Further, several opportunities were provided to the respondent to appear before the Council and to make his submissions, if any. Despite several opportunities granted, the respondent has not responded. Neither he nor his authorized representative appeared before the Council for making any submissions. On consideration of the report of the Disciplinary Committee, the Council at its meeting held on

6 18.6.2012 decided to accept the said report and accordingly, held that: (a) the respondent was guilty of professional misconduct falling within the meaning of Clause 11 of Part-1 of the 1st Schedule read with sections 21 and 22 of the Act, 1949; (b) the respondent was also guilty of “other misconduct” under Section 22 read with Section 21 of the Act.

7 submitted his written submissions nor appeared personally or through any qualified person to submit his explanation. The Disciplinary Committee has carefully examined the evidences available on record which indicates involvement of the respondent in claming fictitious refund and the respondent failed to refute the charges framed against him by any manner. The charges framed against the respondent are very serious in nature, despite several remainders issued by the Disciplinary Committee, the respondent has shown disregard to all the notices and remainders. It is also noticed that the respondent had admitted in the statement given under section 132(4) of the Income Tax Act, 1961 that he has created false TDS certificates using fake rubber stamp of various existing and non-existing concerns and filed return by attaching the aforesaid TDS certificates. It is also admitted by the respondent that for the purpose of encashing the refund, he opened more than 100 savings bank account in fictitious/benami names in banks and post offices.

8 In order to get the refund order, the respondent bribed the postman and received the registered letter sent by the Income Tax Department. Yet another misconduct committed by the respondent is creating a fake company and prepared bogus seals and share certificates of the company. In the absence of any efforts made by the respondent to rebut the charges leveled against him and in view of the admission made by the respondent under Section 132 of the Income Tax Act, 1961, the Committee proceeded to hold that the respondent was involved in fraudulent acts becoming unfit to be a member of the Chartered Accountants of India and accordingly, held that the respondent is guilty of “other misconduct” as provided under Section 22 read with Section 21 of the Act.

9 to the respondent to appear and submit his explanation if any, to rebut the report of the Disciplinary Committee.

Though several opportunities were provided to the respondent, no explanation is offered by him nor he has made any effort to appear before the Council.

10 10. The profession of Chartered Accountants is noble, deserves high respect and trust. In the profession for that matter, the member has the onerous responsibility to maintain the dignity and decorum of the institution. The society reposes confidence on professionals. Any attempt of failure to maintain the same, would have a cascading effect with wide ramification on the entire system and institution. In the present case, the charges levelled against the respondent are very serious. Despite such serious allegations made against him, the respondent has not chosen to respond to the notices issued on several dates by the Council. This deliberate disregard on the part of the respondent, adds to the misconduct of the respondent which has to be viewed seriously. However, in view of the respondent being removed from the role of the register maintained by the Institute from 1997 for not paying the requisite fee of membership and two decades having been passed from the date of complaint received by the institute against the

11 respondent, we are of the considered opinion that the recommendation made by the counsel requires to be accepted. The misconduct of the respondent proves that he is unfit to be a member of the Institute and deserves an order of penalty commensurate to the misconduct proved. Given the circumstances, we accept the recommendations made by the Council to remove the name of the respondent from the register of members for a period of 5 years, as the respondent is proved to be guilty of “other Misconduct’ under Section 22 read with Section 21 of the Act. Accordingly, we direct the Council to implement the order within a period of two months from the date of the receipt of certified copy of this order. In the result, Civil Petition stands allowed.

Ordered accordingly.

Sd/-

JUDGE

Sd/-

JUDGE brn