The Institute of Chartered Accountants of India’s Disciplinary Committee (Bench-II) issued an order regarding CA. Jayant Ishwardas Mehta on May 17, 2024, following a hearing on March 28, 2024. The Committee found CA. Mehta guilty of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. The case involved a complaint by Shri Firdosh Kassam Karachiwala concerning an error in his Income Tax Return for Assessment Year 2014-15, where Section 54F of the Income Tax Act, 1961, was incorrectly claimed instead of Section 54. Despite CA. Mehta’s representation that the error was unintentional and that no loss was ultimately caused to the complainant, the Committee concluded that he lacked a diligent approach, causing mental harassment and financial loss to the complainant. Consequently, the Committee decided to reprimand CA. Jayant Ishwardas Mehta under Section 21B(3)(a) of the Chartered Accountants Act, 1949.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[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
[PR/307/17-DD/309/17-DC/1502/2021]
In the matter of:
Shri Firdosh Kassam Karachiwala
Versus
CA. Jayant Ishwardas Mehta
Members Present:-
CA Ranjeet Kumar Agarwal, Presiding Officer (in person)
Mrs. Rani S. Nair, IRS (Retd.), Government Nominee (through VC)
Shri Arun Kumar, IAS (Retd.), Government Nominee (through VC)
CA anjay Kumar Agarwal, Member (in person)
CA otha S Srinivas, Member (in person)
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 CA. Jayant Ishwardas Mehta (hereinafter referred to as the ‘Respondent’) is GUILTY of Professional Misconduct falling within the meaning of 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 28th March 2024.
3. The Committee noted that on the date of the hearing held on 28thMarch 2024, the Respondent was present through video conferencing and made his verbal representation on the Findings of the Disciplinary Committee, inter-alia, stating that the error was unintentional. The Committee also noted that the Respondent in his written representation on the Findings of the Committee, inter-alia, stated as under:
(a) Even if there is any negligence in performance of duties or errors of judgment in discharging of duties, the same cannot constitute misconduct unless ill-motive in the acts are established.
(b) Once the Complainant himself has accepted that the said error was inadvertent, the Complainant is estopped from contending or maintaining the present proceedings alleging that the Respondent is guilty of professional misconduct.
(c) The Disciplinary Committee has accepted that the error in filing Income Tax Returns for AY 2014-15 was an inadvertent mistake.
(d) The Respondent had prepared the computation of income and forwarded the same to the Complainant for his approval. When the Complainant approved the same then only his Income Tax Return was filed.
(e) No loss has been caused to the Complainant as no penalty was imposed upon him as the Appeal filed by him before CIT was allowed. The Complainant was consequently permitted to claim exemption / deduction under Section 54 of the Income Tax Act 1961.
(f) For the subsequent Assessment Year i.e. AY 2015-16, the Complainant approached the Respondent once again for filing of Income Tax Return.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional Misconduct vis-a-vis written and verbal representation of the Respondent.
5. Keeping in view the facts and circumstances of the case, material on record including verbal and written representation on the Findings, the Committee on perusal of Income Tax Return of the Complainant filed for the/Assessment year 2014-15 noted that the exemption/deduction was claimed under Section 54F of the Income Tax Act, 1961 instead of Section 54 of the Income Tax 1961. While claiming dedUction under Section 54F of the Income Tax Act, 1961, the fact that the property being sold was residential property was in the knowledge of the Respondent is evident from emails sent in November and December 2013 to the Respondent by the Complainant.
5.1 Thus, the Committee observed that the Respondent lacked diligent approach while filing the Income Tax return of the Complainant due to which the Complainant who is a senior citizen was mentally harassed. He also had to incur financial loss by appointing another Authorized Representative to defend his case.
5.2 Hence, professional 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 misconduct.
7. Thus, the Committee ordered that CA. Jayant Ishwardas Mehta be Reprimanded under Section 21B(3)(a) of the Chartered Accountants Act 1949.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
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(MRS. RANI S. NAIR, IRS REID.)
GOVERNMENT NOMINEE GOVERNMENT NOMINEE
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(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
Sd/-
(CA. SANJAY KUMAR AGARWAL)
MEMBER
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(CA. COTHA S SRINIVAS)
MEMBER
