CA not expected to check genuineness of documents submitted by client while issuing Form 15CB

  • Blog|Income Tax|News|
  • 116 Views
  • |
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 3 December, 2022

Form 15CB

Case Details: Murali Krishna Chakrala Vs. The Deputy Director, Directorate of Enforcement - [2022] 145 taxmann.com 248 (Madras)[23-11-2022]

Judiciary and Counsel Details

    • P.N. Prakash & G. Chandrasekharan, JJ.
    • Nithyaesh NatrajVaibhav R. Venkatesh for the Petitioner.
    • N. Ramesh, Special Public Prosecutor (ED) for the Respondent.

Facts of the Case

Petitioner, a Chartered Accountant, was approached by his client for the issuance of Form 15CB. The client was required to make payments for imports. The petitioner issued Form 15CB on his client’s request after going through all the required information.

Subsequently, an investigation was carried out on the client and found that it was involved in money laundering. The allegations indicated opening fictitious bank accounts, forged bills of entry, parking huge funds in the bank account and transferring funds to various overseas parties. During the investigation, the Enforcement Directorate (ED) discovered the petitioner’s involvement as Form 15CB was filed in his name and overseas payments were made through bank accounts using such forms.

After the investigation, the Enforcement Directorate filed a supplementary complaint on the petitioner, contending his involvement in the generation of proceeds of crime.

Aggrieved by the order of the Enforcement Directorate, a petition was filed before the trial court but with no success. Thereafter, a petition was filed before the Madras High Court.

High Court Held

The Court held that all the nationalised banks transferred the money without Form 15CB except a particular Bank. If the petitioner had been part of the conspiracy, the certificates would not have been uploaded in his name. The petitioner has only received the remuneration for issuance of such Form 15CB and nothing more.

Further, it was held that Chartered Accountant is only required to examine the nature of remittance and nothing beyond that. There is no requirement to dig deep into the genuineness of the documents submitted by his clients.

Since the petitioner issued Form 15CB after scrutinising the documents furnished to him by the client, there was no reason for the petitioner to suspect the genuineness of such import transactions. He discharged his duties following the professional behaviour expected from him.

Therefore, the Court discharged the petitioner from the prosecution and enlisted him as a witness.

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied