Delayed Retraction Backfires: ICAI Finds CA Guilty in Bogus Donation Tax Evasion Scheme
The ICAI Board of Discipline held CA AKKG guilty of “Other Misconduct” for his involvement in a bogus political donation scam facilitating tax evasion.
As detailed in the background , the case originated from an Income Tax Department search on multiple political parties and charitable institutions, where several professionals (including the Respondent) were found to be acting as intermediaries, soliciting clients to route funds as fake donations to claim deductions. The funds were then returned in cash after deducting commission.
A crucial factor was the Respondent’s statement on oath dated 03.06.2021 , where he explicitly admitted to referring clients for such transactions and earning commission (around 0.5%). The Board noted that this admission was clear, voluntary, and corroborated by other evidence.
The Respondent’s defence that the statement was incorrectly recorded or obtained under assurance was rejected, as he failed to retract it within a reasonable time, thereby weakening his credibility. The Board emphasized that statements recorded under Sections 131(1A)/132(4) carry strong evidentiary value unless promptly challenged.
Even though no reassessment was carried out by the Income Tax Department, the Board held that this does not dilute the misconduct, especially when independent evidence and admissions exist. The Respondent also failed to produce any cogent evidence to rebut the allegations.
Accordingly, the Board concluded that the charge of facilitating tax evasion through bogus donations stood proved, and held him guilty under the Chartered Accountants Act. However, considering overall circumstances and his representation, the Board imposed a lenient penalty of reprimand.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[PR/G/499/2022/DD/491/2022/BOD/760/2024]
ORDER UNDER SECTION 21A (3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 15 (1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007
IN THE MATTER OF:
Ms. Padmini Solanki ……. Complainant
Versus
CA. Ajit Kumar Kantilal Gajera ……. Respondent
[PR/G/499/2022/DD/491/2022/BOD/760/2024]
MEMBERS PRESENT (THROUGH VIDEO CONFERENCE):
CA. Rajendra Kumar P, Presiding Officer
Ms. Dolly Chakrabarty (IAAS, retd.), Government Nominee
CA. Priti Savla, Member
Date of hearing and passing of Order: 30th December 2025
1. The Board of Discipline vide its findings dated 08th December 2025 was of the view that CA. Ajit Kumar Kantilal Gajera (M. No 173280) is GUILTY of Other Misconduct falling within the meaning of Item (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949.
2. An action under Section 21A (3) of the Chartered Accountants Act, 1949 was contemplated against CA. Ajit Kumar Kantilal Gajera (M. No 173280) and communication dated 19th December 2025 was addressed to him thereby granting him an opportunity of being heard on 30th December 2025 which was exercised by him by being present through video conferencing. He confirmed receipt of the findings of the Board and requested the Board to take a sympathetic view on the case and promised not to repeat it.
3. Thus, upon consideration of the facts of the case where neither any re-assessment was done by the Income Tax Department, nor any action was initiated against the Political Parties involved in the instant matter, along with the consequent misconduct of CA. Ajit Kumar Kantilal Gajera (M. No 173280) and keeping in view his representation before it, the Board decided to REPRIMAND Ajit Kumar Kantilal Gajera (M. No 173280).
BOARD OF DISCIPLINE
(Constituted under Section 21A of the Chartered Accountants Act 1949)
FINDINGS OF THE BOARD OF DISCIPLINE UNDER RULE 14 (9) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007
FILE No : PR/G/499/2022/DD/491/2022/BOD/760/2024
CORAM: (PRESENT IN PERSON)
CA. Rajendra Kumar P, Presiding Officer
Ms. Dolly Chakrabarty, Government Nominee
CA. Priti Savla, Member
IN THE MATTER OF:
Ms. Padmini Solanki
Succeeded by Mr Darshan Priyadarshi ……….. Complainant
Versus
CA. Ajit Kumar Kantilal Gajera ……. Respondent
Date of Final Hearing: 26th September 2025
Place of Final Hearing: ICAI Bhawan, Ahmedabad
Date of Pronouncement of Judgment: 04th November 2025
PARTIES PRESENT (IN PERSON):
Representative of Complainant’s Department: Shri Prem Prakash Prasad and Shri Girraj Meena, Inspectors
Respondent: CA. Ajit Kumar Kantilal Gajera
Counsel for Respondent: CA. Deepak Shah
FINDINGS:
BACKGROUND OF THE CASE:
1. It is the case of the Complainant that a search and seizure operation under the Income tax Act, 1961 (hereinafter referred to as the “Act”) was conducted by the Complainant Department in the case of 03 Political Parties and 02 Charitable institutions based out of Ahmedabad, namely, Manvadhikar National Party, (MNP), Kisan Adhikar Party (KAP), All India Social Education Charitable Trust (AISECT) controlled by Shri Tribhawan Ramkalp Ojha and Kisan Party of India (KPI), and Aadhar Foundation (AF) controlled by Shri Saumil Bhadaria, that were involved in widespread and multiple tax evasion practices.
2. Further, the Complainant stated that during the search of their department carried out on 02″° February 2021, 28 Chartered Accountants including Respondent, were found to have solicited clients for bogus donations scam who have categorically, unambiguously and repeatedly admitted their role in the aforementioned bogus donation scam in their statements recorded on oath u/s 132(4) and 131(1A) of the Act.
3. Furthermore, the Respondent colluded with the key persons from the Political party in this elaborate scam to facilitate widespread tax evasion and electoral funding fraud. The Respondent solicited clients/donors looking to reduce their taxable income by claiming fraudulent deductions as per the Income Tax Act. After soliciting the clients these commission agents (professionals including Respondent) provided bank account details of the political party to the client, who in turn transferred the donation amount to the said bank account and provided the details such as Name of donor, PAN, address, Bank A/c details, RTGS/NEFT/UTR no. etc. on WhatsApp to the key persons of political party, who in turns generated donation receipt in the name of the client. Thereafter, the said amount was then finally returned to the original donor’s i.e., clients in the form of cash after deduction of the commission of the mediators, i.e., (Respondent), in the extant matter.
CHARGE ALLEGED:
4. The Respondent was involved in a political party donation scam to facilitate tax evasion by soliciting clients for bogus donations in lieu of commission income.
BRIEF OF PROCEEDINGS HELD:
5. The details of the hearings fixed and held in the said matter are given below:
| S. No. | Date of hearings | Status of hearings |
| 1. | 10th July 2025 | Part Heard and Adjourned. |
| 2. | 26th September 2025 | Matter Heard and Concluded. Judgment Reserved. |
| 3. | 4th November 2025 | Judgment Pronounced. |
BRIEF SUBMISSIONS OF THE PARTIES:
RESPONDENT:
6. The Respondent vide letter dated 05th July 2025, while reiterating his previous statement, submitted that the copy of his statement recorded on 03rd June 2021 was never made available to him except when the complaint was filed on 13th May 2022, which was sent by ICAI to him on 13th September 2022. Therefore, before 13th September 2022, he was never made aware of the wrong facts mentioned in the statement. The Respondent further submitted that the statement is not the correct version of his answers, but the AO, recording the statement, wrongly inferred the same by assuring him that nothing would go against him. Having such assurance and obtaining the signatures on misrepresentation, the same is not admissible in evidence.
7. The Respondent further submitted that the complaint was against 28 members of ICAI based on a common cause, as well as their admission given to the Income Tax Department. However, in the status report filed, the list contains only 22 members. How and in what circumstances the names of 6 members are left out is not known. If that be so, the Respondent should have been left out of the proceedings as the principles of natural justice demand equal treatment for all equally accused persons. Furthermore, even if the Respondent referred to a client to another person for a loan, work, or investment-related advice, any wrongful act committed by that third party cannot be attributed to the Respondent Mere referral does not amount to culpability, particularly when the Respondent has not received any fee or consideration, which is an admitted and undisputed fact.
8. The Respondent further submitted that neither the KO nor the Complainant brought on record that he was soliciting clients/donors who were looking to reduce their taxable income. The Respondent prayed accordingly.
COMPLAINANT/COMPLAINANT DEPARTMENT:
9. The Complainant, vide letter dated 2nd July 2025, while reiterating the submissions earlier placed before the Director (Discipline), stated that the statement on oath under Section 132(4)/131(1A) of the Income-tax Act, 1961, was recorded during the period from May to June 2021. The statement was duly read over to the Respondent (hereinafter “deponent”), who, being a qualified professional well-versed in legal matters, personally certified under his signature that no threat, undue pressure, or coercion was exerted upon him during his deposition. The Department further submitted that apart from the statement on oath, there are numerous other incriminating evidence gathered during the search operation, as well as post-search enquiries, which clearly indicate the involvement of such professionals in the large-scale bogus donation scam.
10. The Respondent’s claim of having been subjected to undue influence or coercion during the post-search inquiry, which was raised only after a considerable lapse of time and notably after the initiation of disciplinary proceedings by the Disciplinary Directorate, is clearly baseless, factually incorrect and therefore untenable in law. Such an act of the Respondent appears as an effort to derail the inquiry initiated by the Board of Discipline.
OBSERVATIONS OF THE BOARD:
11. The Board observed that when the Complainant Department initiated the search and seizure operation in the case of 03 Political Parties and 02 Charitable institutions based out of Ahmedabad, namely, Manvadhikar National Party, (MNP), Kisan Adhikar Party (KAP), All India Social Education Charitable Trust (AISECT) controlled by Shri Tribhawan Ramkalp Ojha and Kisan Party of India (KPI), and Aadhar Foundation (AF) controlled by Shri Saumil Bhadaria; it was emerged that the Respondent had facilitated tax evasion by soliciting clients to make bogus donations in exchange for commission payments.
12. The Board observed that the Complainant Department brought on record the Statement on Oath of the Respondent dated 03rd June 2021, recorded before them under 131 (1A) of the Income Tax Act, 1961. The relevant portion(s) of the Statement on Oath of the Respondent are reproduced below:
“Q4. During the search and seizure operation in the case of various political parties and charitable organization, in the premises of Sunny Dineshbhai Soni, A/402, Devdutt Residency, Chenpur Road, New Ramp, Ahmedabad, statement of Shri Sunny Soni was recorded u/s 132 (4) of the IT Act. I am showing you the relevant portions of the statement which pertain to you. Please offer your comments on the same.
Ans: Sir, I have gone through the statement of Sunny Dineshbhai Soni. It is deposed by the aforementioned person in his statement recorded on oath that I used to refer clients to him. I confirm the aforementioned facts and admit that I used to refer different clients to Sunny Soni who contacted me for reducing their taxable income. Thereafter, the client used to donate the amount directly into the bank accounts of political party and after taking confirmation from the party, Sunny Soni used to directly provide cash to the clients. Thereafter, Sunny would provide my commission 0.5% of the total amount donated by the client to the account of the political party, in cash to my office boy. The cash in return of donated amount would be collected by the donors themselves, or through office employee of Sunny Soni at a place of convenience. Further, I would want to state that I only referred the clients to Sunny Soni and then his employee took over from there. After the transaction was over, I received my commission of 0.5% in cash from Sunny Sant”
“Q7. How did you come in contact with the individuals whose names are mentioned in your reply to question no. 4 above?
Ans. Sir, I know Shri Sunny Soni since 2017. We were preparing for C4 exams at that time. It is from him that I came to know about the practice of earning commission in lieu facilitating donations to political parties/charitable organizations through cheque/ RTGS which is then returned in the form of cash to the donors. I was involved in such practice for a brief period during 2015-19.”
“Q9. It is requested to go through the questions asked above and your answers therein. Please go through the same and confirm the content.
Ans. Sir, I have gone through the above questions and I confirm the answers given by me are correct. I confirm that I used to facilitated bogus donations to the political party namely Manvadhikar National Party. I did this for earning commission income wherein the donations made by the various donors through their bank accounts were then returned to them in the form of cash and a percentage was given to me by Sunny Soni as commission. Thls modus is explained, in detail, In the statements of Sunny Soni which has been carefully read by me. I confirm that the modus explained by him in his statement as shown to me is accurate and correct. I have confirmed the same in my reply to Question no. 4 of statement recorded today, 03.06.2021 u/s 131(1A) of the I. T Act 1961. I also submit that! will offer the commission income earned in above manner and will pay the relevant taxes.”
Thus, upon examination of the above, the Board noted that the Respondent has unequivocally admitted his involvement in the said political donation scam.
13. The Board observed that even if the Respondent’s submission that his statement on Oath is molded or incorrectly recorded, were to be accepted at face value, then it is upon him to promptly retract within a reasonable time or approach any appropriate authority within a reasonable time to safeguard his interests. However, in the present case, the Respondent failed to take any such corrective step and chose to remain silent for a considerable period. This prolonged inaction, in the Board’s view, undermines the credibility of his present contention. Thus, according to the Board, the Respondent’s assertion that his earlier statement was folded or incorrect is merely an afterthought, advanced with the apparent intent of evading the disciplinary proceedings.
14. The Board noted that the Respondents affidavit dated 20th September 2025, and the submissions of the representatives of the Complainant Department during the hearing, it is established that the Income Tax department did no reassessment of the Respondent’s income. Nevertheless, the Board cannot lose sight of the fact that the Respondent’s statement on Oath dated 03rd June 2021 is admissible unless rebutted within a reasonable time. The Board observed that in the present case, the Respondent failed to rebut his statement within a reasonable time and as a matter of fact, the Respondent did not even rebut his statement on Oath and remained silent till the receipt of the complaint in Form-I.
15. The Board cannot negate its findings just upon the fact that the Respondent’s case was not reopened by the Income Tax department after the alleged commission income, and keeping in view the observations of the Court concerning statement on Oath recorded under Section 131 (1A) of the Income Tax Act, 1961, the Board found that Complainant has met the initial burden of proving the Guilt on part of the Respondent. Accordingly, the onus therefore shifted to the Respondent to establish his innocence. However, the Respondent failed to produce any cogent evidence or documentation in support of his defence.
16. Thereupon, on a detailed perusal of the submissions and documents on record, the Board was of the view that the Complainant department had furnished corroborative evidence demonstrating that the Respondent was involved in a political party donation scam to facilitate tax evasion by soliciting clients for bogus donations in lieu of commission income. In view of the same, the Board held the Respondent Guilty in respect of the charge alleged.
CONCLUSION:
17. Considering the foregoing, in the considered opinion of the Board, the Respondent is held `Guilty’ of Other Misconduct falling within the meaning of Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.
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