The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee (Bench-II) has found CA. Anil Saxena guilty of professional and other misconduct. The case stemmed from a complaint by the Superintendent of Police, CBI, regarding Saxena’s involvement in preparing fraudulent financial documents. The Committee found that Saxena had prepared projection reports and audited balance sheets for a client, Mr. Pradeep Goyal, using fake PAN numbers and forged documents, which were then used to secure bank loans that later became Non-Performing Assets (NPAs). Despite being aware of the fraudulent nature of the documents after bank inquiries, Saxena failed to take appropriate action. Additionally, two sets of balance sheets were found for the same financial years, with Saxena’s certified figures showing inflated values. He also failed to provide working papers to substantiate his audited financials. The Committee concluded that Saxena’s conduct amounted to professional and other misconduct. Consequently, the ICAI ordered the removal of Anil Saxena’s name from the Register of Members for three months and imposed a fine of Rs. 25,000.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Setup by an Act of Parliament)
PR/G1233/2017-DD/316/2017-DC/1491/2021
[DISCIPLINARY COMMITTEE [BENCH-II (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 21B (3) OF THE CHARTERED ACCOUNTANTS ACT. 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007
In the matter of:
Mr. Anil Singh, Superintendent of Police, CBI
Versus
CA. Anil Saxena,
M/s. Anil Saxena and Co.,
Chartered Accountant,
Date of Hearing :
28th March, 2024
Date of Order : 17th May, 2024
1. That vide Findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee was, inter-alia, of the opinion that Anil Saxena (hereinafter referred to as the ‘Respondent’) is GUILTY of Professional and Other Misconduct falling within the meaning of Item (2) of Part IV of the First Schedule and Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action under Section 21B (3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting opportunity of being heard in person / through video conferencing and to make representation before the Committee on 281h March 2024.
3. The Committee noted that on the date of the hearing held on 28th March 2024, the Respondent was not present before it and had sent across an email dated 28th March 2024 requesting the Committee to reconsider its Findings as the Complainant Department had not made him a party in the criminal case. He is only a witness in the criminal case and matter is still sub judice. Keeping in view the provisions of Rule 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Committee was of the view that the Respondent has nothing more to represent before it and thus, decided to consider his case. for-award of punishment on the basis of material available on record.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional and Other Misconduct vis-a-vis written representation of the Respondent. As regard the request of the Respondent to reconsider the Findings of the Committee, the Committee held that there is no provision under the Chartered Accountants Act 1949 and/or the Rules framed thereunder to review or reconsider the Findings arrived at by the Committee, As regard the submission of the Respondent that in the criminal case filed by the Complainant Department, he has not been made a party, but, is only a witness and the matter is still sub judice, the Committee held that the issue that has been examined by the Committee is whether the conduct of the Respondent arising out of the circumstances as stated in the case records has amounted to ‘Professional and/or Other Misconduct’ as provided under the Chartered Accountants Act 1949. Thus, the status of the Respondent in the Criminal proceedings i.e. of being one of the accused or a witness in the Criminal proceedings is not germane to the issue.
5. Keeping in view the facts and circumstances of the case, material on record and written representation on the Findings, the Committee noted that CBI had registered a criminal case against Mr. Pradeep Goyal (proprietor of M/s. Mahendra Electrical and Electronics i.e., the accused entity). The Committee further noted that the Respondent had prepared projection reports and Balance Sheets in respect of availing various loans for Mr. Pradeep Goyal which bore the fake PAN number of Mr. Pradeep Goyal and that the financial statements were prepared on the basis of fake and forged documents.
5.1 The Committee noted that the Respondent in his statement before the Income Tax authorities had admitted as under:
(a) The Balance Sheets of the accused entity were signed and audited by him for the years 2008-09, 2009-10 and 2010-11.
(b) He prepared projection reports in respect of availing various loans for Mr. Pradeep Goyal.
(c) The audit reports prepared by him for Mr. Pradeep Goyal were used to obtain credit facilities from various banks.
(d) later on, all these accounts turned NPA (Non-Performing Asset) and the bank officials visited his office to make various enquiries. At that time, he realised that the Balance Sheets prepared by him were based on fake and forged documents.
5.2 The Committee observed that for the financial years 2008-09 and 2009-10 two sets of Balance Sheets were produced on record by the Complainant with his complaint. One set is signed by the Respondent, whereas another set was signed by CA. Vinod Kumar Pal. Thus, the Committee observed that the figures shown in the financial statements certified by the Respondent showed higher figures of sales, purchases and stocks. The Committee observed that the Respondent failed to submit his working papers to substantiate that the Balance Sheet certified by him was the correct one. It was further observed from the documents on record that there is no evidence that the Respondent, on being aware of the second set of the financials, hed, taken any action against CA. Vinod Kumar Pal and the proprietor of the accused entity. In absence of any document/arguments/defence of the Respondent on record, the bona fide of the Respondent in the matter could not be established. This also proves the possible collusion between the Respondent, CA. Vinod Kumar Pal and the proprietor of the accused entity.
5.3 Hence, professional and other misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 7th February 2024 which is to be read in consonance with the instant Order being passed in the case.
6. Accordingly, the Committee was of the view that ends of justice will be met if punishment is given to him in commensurate with his Professional and Other Misconduct.
7. Thus, the Committee ordered that the name of CA. Anil Saxena be removed from the Register of members for a period of 03 (Three) Months and also a Fine of Rs. 25,0001- (Rupees Twenty Five Thousand Only) be imposed upon him payable within a period of 60 days from the date of receipt of the Order.
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(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
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(MRS. RANI S. NAIR, IRS RETD.)
GOVERNMENT NOMINEE
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(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
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(CA. COTHA S SRINIVAS)
MEMBER
