The Disciplinary Committee (Bench-II) of the Institute of Chartered Accountants of India (ICAI) found CA. Mohandas Belle Shetty guilty of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. The misconduct related to certifying 99 Form 15CA/15CB documents for M/s Aadi Enterprises without proper verification of the firm’s credentials, agreements, or financial records. These certifications were used by the informant bank to allow advance import payments, which led to financial losses. Despite being served notices through speed post and email, the respondent failed to appear in any of the four scheduled hearings and did not submit any written defense. The Committee observed that he had generated around 4865 UDINs in recent years, suggesting he was active in his profession but displayed a negligent attitude towards the proceedings. Similarities across invoices, including matching addresses and invoice formats, further raised concerns. Given his failure to exercise due diligence and comply with tax provisions, the Committee concluded that professional misconduct was clearly established. As a result, the Committee ordered the removal of CA. Mohandas Belle Shetty’s name from the Register of Members for a period of one year.
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
[PPR-227/2016-DD/106/1NF/2016/DC/1580/2022]
In Re:
CA. Mohandas Belle Shetty
….Respondent
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 (in person)
CA. Sanjay Kumar Agarwal, Member (in person)
CA. Cotha S Srinivas, Member (through VC)
Date of Hearing : 10th April, 2024
Date of Order : 28th 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 Mohandas Belle Shetty (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 10th April 2024.
3. The Committee noted that on the date of hearing held on 10th April 2024, neither the Respondent was present before it nor was there any intimation as regard his non-appearance despite the due delivery of the notice for hearing and copy of the Findings of the Disciplinary Committee upon him.
3.1 The Committee also noted that the soft copy of the Findings of the Disciplinary Committee and the Notice for the hearing had also been sent to the email address available in the member riecords of ICAI. As per email delivery intimation for the said communication(s), the delivery of the Said email(s) had been completed.
3.2 The Committee further noted from the member records of ICAI as under:
(a) ‘KYM’ Form of the Respondent had been submitted and the same was pending with the comment ‘ask for correction’.
(b) Around 1055 UDINs had been generated by the Respondent during the year 2023.
3.3 Furthermore, the Committee noted that the Respondent neither submitted his written submissions/documents at Prima Facie Opinion stage nor during the course of hearing. The Committee also noted that the aforesaid case was listed for hearing before it on four occasions end the Respondent did not appear even once during the hearing despite the due delivery of the communication for hearing. Accordingly, the case was concluded ex-parte on 10th August 2023.
3.4 Thus, the Committee was of the view that all possible efforts (speed post and email) have been made to ensure the delivery of the communication for hearing upon the Respondent, but he chose not to represent before the Committee. 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 Findings holding the Respondent Guilty of Professional Misconduct.
5. Keeping in view the facts and circumstances of the case as well as the material on record, the Committee noted that the present matter relates to certification of 99 Form 15CA/15CB by the Respondent in respect of the Firm M/s Aadi Enterprises without verifying the credentials of the said Firm on the basis of which Informant Bank had allowed the said firm an Advance Import payment and thereby suffered losses. Before certifying the aforesaid Forms, the Respondent was required to verify the agreement between the remitter and the beneficiary and relevant documents and books of accounts. Despite offering sufficient opportunities, the Respondent failed to appear before the Committee. The Committee from the list of UDIN generated by the Respondent noted that the Respondent had generated around 4865 UDIN’s in last 4-5 years, which proves that he is active in his day-to-day affairs and continuously generating UDIN. However, he did not care to appear before the Committee which shows his casual approach.
5.1 The Committee on perusal of documents noted that the style, signature and stamp of the different exporters/issuers of the said invoices on the Proforma invoice and the format of all the said Proforma invoices were quite similar. Further, the Buyer’s Order no. and date mentioned in all Proforma Invoices were verbal and even the addresses of some of the exporters specified in the Proforma invoice were the same.
5.2 The Committee in absence of any defense from the Respondent held that the Respondent failed to exercise due diligence and had failed to ensure the compliance of the provisions of the Income Tax Act, 1961 while issuing and certifying Form 15-CB. The Committee also inferred that non-appearance of the Respondent before it shows that he has nothing to submit and he accepts the charge leveled against him.
5.3 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 the name of CA. Mohandas Belle Shetty, be removed from the Register of Members for a period of 01(One) Year.
Sd/-
(CA. RANJEET KUMAR’AGARWAL)
PRESIDING OFFICER
Sd/-
(MRS. RANI S. NAIR, IRS RETD.)
GOVERNMENT NOMINEE
Sd/-
(SHRI ARUN KUMAR, lAS RETD.)
GOVERNMENT NOMINEE
Sd/-
(CA: SANJAY KUMAR AGARWAL)
MEMBER
Sd/-
(CA. COTHA S SRINIVAS)
MEMBER
