Shivendra Kumar Gupta Vs CA Mohamed Saif Shaikh (ICAI Disciplinary Committee)
ICAI Orders Three-Month Removal and ₹1 Lakh Fine for Manipulation of Tax Challans
Summary: The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI), Bench-II, in Shivendra Kumar Gupta, IRS Vs CA Mohamed Saif Shaikh, by its final order dated 15 October 2026, reprimanded CA Mohamed Saif Shaikh (Membership No. 133633), Goa, ordered removal of his name from the Register of Members for three months and imposed a fine of ₹1,00,000. The order followed disciplinary findings pronounced on 29 August 2026 in Case No. PR/G/199/2018/DD/209/2018/DC/2013/2025. The Committee found him guilty of professional misconduct under Clause (4) of Part II of the Second Schedule and other misconduct under Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949. The fine was directed to be paid within 60 days of receipt of the order.
The complaint originated from the Income Tax Department, Margao Range, following a survey under Section 133A of the Income-tax Act, 1961, conducted on 12 February 2018. According to the Department, the respondent collected tax amounts from clients in cash, deposited substantially smaller amounts through manually completed tax challans and subsequently altered the bank-stamped counterfoils to show higher payments. Clients were allegedly furnished manipulated challans and copies of original income-tax returns reflecting higher tax liabilities. Thereafter, revised income-tax returns were filed showing reduced income or tax liability without the clients’ knowledge. The Department initially alleged irregularities involving 437 cases and substantial short payment of tax. The respondent disputed that figure and maintained that only 106 cases involving approximately ₹30 lakh were affected. The Committee held that the dispute concerning the number of cases did not negate the established acts of manipulation.
The disciplinary record included statements recorded on 12 February, 27 March and 27 June 2018 under Section 131 of the Income-tax Act. In the statement dated 27 June 2018, the respondent acknowledged collecting ₹4,25,000 and ₹4,20,000 from two clients towards tax payments for AY 2015-16, while initially depositing only ₹25,000 and ₹20,000 respectively. He also stated that he personally completed manual challans, altered the counterfoils after payment and supplied the manipulated documents to clients. His statement further described the filing of revised returns reducing the tax liability after clients had received copies of their original returns. The Committee treated these admissions as important evidence, while also examining whether they were supported by independent material.
That corroboration included a State Bank of India confirmation dated 19 January 2019. The bank confirmed that certain challans supplied to clients showed materially higher payments than the actual amounts deposited. For example, one counterfoil reflected ₹1,42,500 against an actual payment of ₹2,500, while another showed ₹1,12,500 against ₹2,500. The record also referred to confession-cum-declarations executed on non-judicial stamp paper, in which the respondent acknowledged manipulating tax-payment documents and filing revised returns without the concerned clients’ knowledge. The Committee considered the banking confirmations and declarations alongside the sworn statements rather than relying on an isolated admission.
The respondent disputed the handwriting and signatures attributed to him and maintained that an office employee had carried out the manipulations. However, the Committee examined a Central Forensic Science Laboratory report dated 26 December 2019, which supported common authorship of the disputed signatures. It observed that the forensic opinion remained unrebutted by contrary expert evidence. The Committee also considered the respondent’s later reliance on a letter purportedly issued by employee John D’cruz accepting responsibility. It found that defence inconsistent with the respondent’s earlier admissions that he personally prepared and altered the challans. The respondent had not initiated proceedings against the employee, and the Committee considered his supervisory responsibility as proprietor of a practice employing three persons.
The respondent further contended that his admissions had been obtained under pressure from the Income Tax authorities. The Committee found no supporting complaint, contemporaneous retraction or other evidence establishing coercion. In considering the evidentiary value of statements, the disciplinary record referred to Deepak Shah v. ACIT and Avadh Kishore Das v. Ram Gopal, AIR 1979 SC 861. The latter authority was discussed for the proposition that an admission is not conclusive and may be explained or shown to be incorrect, but ordinarily remains relevant evidence unless satisfactorily rebutted. The Committee’s conclusion rested on the combined effect of the admissions, declarations, bank records and forensic material.
Another defence was that the respondent had subsequently paid the outstanding taxes and interest, filed returns in the reopened cases and thereby prevented ultimate revenue loss. He submitted that assessments had been reopened under Sections 147 and 148 of the Income-tax Act in 106 cases and that more than ₹45 lakh had been paid towards tax and interest. He also asserted that departmental officials had indicated willingness to withdraw the disciplinary complaint. The Committee noted that no formal withdrawal communication had been produced. It held that subsequent payment of tax and interest did not erase misconduct already committed through manipulation of client tax payments, fabrication of challans and unauthorised revised returns.
At the punishment stage, the respondent appeared through video conferencing on 15 October 2026 and relied on a written representation dated 28 September 2026. He sought examination or cross-examination of Income Tax officials, clients, a forensic expert and other persons. The Committee observed that the challans and case list had been provided at the prima facie opinion stage and that no application for witness examination had been made during the Rule 18 hearing stage. Since the matter had reached the punishment stage under Rule 19(1), it declined the request. Having considered the seriousness of the established misconduct and the respondent’s representations, the Committee imposed a reprimand, removal from the Register of Members for three months and a fine of ₹1 lakh. The decision illustrates that professional integrity and accountability extend to the handling of clients’ tax funds, the authenticity of payment documents and the filing of tax returns.
Cases Discussed:
- Avadh Kishore Das v. Ram Gopal, AIR 1979 SC 861 (Supreme Court). Cited in paragraph 3.9 of the disciplinary findings for the evidentiary effect of admissions and the burden of explaining an admission alleged to be incorrect. The citation is also discussed in a TaxGuru-hosted ITAT judgment. This is a related reference, not a direct link to the Supreme Court’s original judgment.
- Deepak Shah v. ACIT, 30(1), Mumbai (Income Tax Appellate Tribunal). Referred to in paragraph 3.8 of the disciplinary findings concerning statements recorded under Sections 131 and 132(4) of the Income-tax Act. The uploaded findings do not provide a complete appeal number, decision date or reported citation. Accordingly, no unverified direct case link has been inserted.
