CAs a Soft Target: Officer Overreach in GST Probe & Why CAs Cannot Be Treated as Accused in Tax Investigations
The representation highlights concerns over the treatment of a Chartered Accountant who was allegedly pressured by an investigating officer to sign and stamp GST documents in a manner akin to an audit report and was subjected to coercive threats, including possible seizure of computers and records. The Association clarifies that the CA had only performed routine statutory compliance tasks—filing income tax and limited GST returns—based solely on client instructions, without any involvement in underlying transactions. Citing the Supreme Court ruling in K. Murali Krishna, it reiterates that CAs are not obligated to verify the genuineness of commercial transactions beyond their engagement scope. It further invokes Section 126 of the Evidence Act, emphasizing professional privilege and confidentiality. The Association states that the member cannot attend without formal notice and requests intervention to prevent coercive action, ensure CAs are treated as professional witnesses, and sensitize officers on the limits of a CA’s professional responsibility.
Chartered Accountants Association, Surat
Ref: CAAS/Representations/2025-26/07 |Dated: 12th November 2025
To,
Commissioner of Police,
Office of the Police Commissioner,
Police Bhavan,
Athwalines,
Surat – 395001
Subject: CAs a Soft Target and Preserving Professional Privilege in Investigation
Respected Sir,
The said member had only performed professional assignments such as filing of Income Tax Return and limited period GST Returns for his clients on oral instructions, and had no financial or managerial involvement in the underlying transactions. His role was limited to statutory compliance work, performed in good faith and within the professional framework prescribed under the Chartered Accountants Act, 1949.
Our Concern
It is learned that during the course of earlier interactions, the said Officer had directed the CA to sign and stamp GSTR-2B and GSTR-3B documents in the same manner as an Audit Report, and had also subjected him to undue questioning and pressure, as though he were an accused. The Officer even went to the extent of coercively indicating that if he failed to remain present, coercive action would be taken, including picking him along with his computers, laptops, and professional records. Such threats and directions are not only beyond the lawful scope of investigation, but also violate the principles of privileged professional communication and strike at the independence and dignity of the Chartered Accountancy profession.
The Hon’ble Supreme Court in K. Murali Krishna vs. Deputy Director, Directorate of Enforcement (SLP (Crl.) Diary No.8123/2024) dt.18/03/2024 has categorically held that:
“A Chartered Accountant is not required to investigate the genuineness of the underlying commercial transactions or authenticity of documents beyond the scope of engagement.”
Further, as per Section 126 of the Indian Evidence Act, a Chartered Accountant is bound by professional privilege and confidentiality, and cannot be compelled to disclose information obtained during the course of professional engagement.
Professional and Ethical Stand
In light of the above, we respectfully submit that our Member shall not be able to attend the said verbal requirement to remain present at 5:00 PM today, as there has been no written communication or formal notice issued by the investigating authority. His professional duties are strictly governed by privileged communications under Section 126 of the Indian Evidence Act, and any disclosure or discussion of client information without due process and legal counsel would violate this statutory privilege.
Further, the Guidelines issued by the Institute of Chartered Accountants of India (ICAI) require that enforcement or investigating authorities must coordinate with ICAI and follow due protocol before initiating any coercive or apprehensive action against a Chartered Accountant in connection with professional work. Non-adherence to these guidelines undermines the regulatory oversight vested in ICAI under the Chartered Accountants Act, 1949.
Accordingly, the said member shall await appropriate legal advice before attending or participating in any proceedings, to ensure compliance with his ethical, statutory, and confidentiality obligations. This decision is taken not with any intent to obstruct the investigation, but solely to uphold the sanctity of privileged professional communication, adherence to ICAI’s prescribed norms, and to prevent any inadvertent violation of the Code of Ethics.
Our Demand
We demand your good office to:
1. Kindly intervene and issue necessary directions to the concerned officer of the sue necessary directions to the concerned officer of the Economic Cell to refrain from coercive or intimidating actions against the said Chartered Accountant.
2. Ensure that Chartered Accountants are treated as professional witness and not as cogent evidence of connivance exists. In the past, accused persons, unless cogent evidence of connivance exists. In the past, CAs have been made soft targets for economic disputes between various parties.
3. Sensitize the investigating officers regarding the limited scope of professional responsibility and the privileged nature of communications between Chartered Accountant and his client.
We have full faith that under your leadership, such matters will be dealt with in a just, professional, and dignified manner, preserving both the sanctity of investigation and the independence of the Chartered Accountancy profession.
Regards,
For Chartered Accountants Association, Surat
President | Secretary
VERY NICE ACTION BY OUR ASSOCIATION TO PROTECT A CA MEMBER.EVERY ASSOCIATION OF CA SHOULD TAKE PROMPT ACTION LIKE THIS.WILL YOU PLEASE UPDATE ABOUT THE ACTION TAKEN BY THE AUTHORITIES