Clarification regarding incorrect news reported in media – I-T refund racket in Bengaluru.

Press Release

The Institute of Chartered Accountants of India (ICAI) has come across a news-item titled ‘I-T busts B’luru CA’s tax refund racket with clients from top tech cos’ published in media dated January 26, 2018

It was stated in the news item that “The Income Tax Department on Thursday busted a racket in which tax refunds running into crores were fraudulently claimed by employees of around 50 companies in Bengaluru, including Infosys, IBM, Biocon and Vodafone. I-T officials of Karnataka and Goa found the employees had availed the services of a Chartered Accountant in Bengaluru, who filed false returns for them and secured refunds amounting to Rs.18 crore. The CA, the employees told investigators, took a 10% cut on the refund.”

On going through the aforesaid news-item, ICAI, being the regulator of the profession of Chartered Accountants has taken up the matter with concerned authorities. The representatives of ICAI immediately had a meeting with Director General of Income Tax (Investigation), Bengaluru seeking details in the aforesaid matter & requested Income Tax Department to share information about the accused i.e. Nagesh Shastry.

The Institute verified its records and found that Nagesh Shastry is not a Chartered Accountant as his name does not appear in the Register of members maintained by the ICAI. There are various fraudulent cases being reported wherein individuals/ Tax Consultants are falsely claiming to be Chartered Accountants and during preliminary investigations only it comes to the fore that the accused are not Chartered Accountants but are either Tax Practitioners/Accountants/ Commerce Graduates.

In view of the above, it is a matter of concern for ICAI that in the aforesaid matter neither Income tax department verified the credentials of the person in question with ICAI before issuing a statement to the media nor the Publication cross checked the validity of the statement with ICAI before publishing the story.

The news which has appeared in a section of media certainly has maligned the reputation of Chartered Accountants in the eyes of public and has thus lowered the image and credentials of CA profession.

The Institute has already taken up the matter with the concerned authorities of the Income Tax Department (Investigation), Bengaluru and has pointed out that such statement should not be considered to be issued to media before verifying the facts with ICAI. It would also be requested that in future, if any such case comes for their investigation wherein there is an alleged involvement of an individual claiming to be a Chartered Accountant, the matter may be referred to ICAI for cross verifying the credentials from its records.

The ICAI takes a strong exception to the contents of the news-item published in the newspaper which is incorrect and misleading in so far as the reference to a `Chartered Accountant’ was made. In such sensitive cases, the concerned Department and Publications ought to have verified the facts with the Institute before issuing any statement wherein the involvement of a Chartered Accountant is suspected.

About ICAI

ICAI is a statutory body established under the Chartered Accountants Act, 1949 for regulating the profession of Chartered Accountants in India. ICAI is the second largest accounting body in the world. During its more than 68 years of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for maintaining highest standards in technical, ethical areas and for sustaining stringent examination and education standards. The strength of Chartered Accountant fraternity has grown to over 2.70 lakh members and about 8 lakh active students. The Institute functions under the Ministry of Corporate Affairs, Government of India. It has its headquarters in New Delhi and 5 Regional offices. It presently has 163 branches spread all over the country. In addition, it has also set up 31 chapters outside India and an overseas office in Dubai.

Source- ICAI

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18 responses to “ICAI clarifies regarding incorrect news reported in media – I-T refund racket in Bengaluru”

  1. RAVI says:

    This is another example of Fake News.
    The newspaper and it’s editor should be taken to task for publishing unverified news.

  2. Raj says:

    But it is also a fact that All the corrupt practice being done in all the organisation are very well suggested/guarded by their CA employees or CA firms.

    All the bogus claims of Tax refunds etc can not be done by any organisation without complicity/advice of the CA(whether as employee or as auditor)

  3. Sivaraman says:

    The media does not verify records. They will publish / telecast everthing that is sensational.

  4. GANDHI MOHAN BHARATI says:

    CAs may not be involved. But many others, even just school qualified are in such refund racket.
    I am particularly aware of cases where a particular Army Center in Bengaluru deducted huge TDS amounts of the level of Rs.40,000/- even from poorly paid Naiks Rank people.
    They were approached by toutssaying that they will help them to get Refund by filing their ITRs. After all it is only ITR1. They took a commission for doing so. I helped my neighbour. But the tout will not give the password. I had to go to Delhi, meet people in CBDT and got that poor fellow out of the grip of the tout. He is still faceless. But I had a lot of email correspondence with him. I gave a copy of all of them to the SP of the District as a complaint of cyber crime. No action was followed up.
    It is true such racket exists.

  5. pradeep garg says:

    Sec 288 of Income Tax Act defines CA as ACCOUNTANT only for the purpose of tax audit u/s 44AB and other tax professionals are recognized as Authorized Representative only. Therefore Tax department has erred in stating the “CA” as scammer instead of “some tax practitioners” so it is error on part of department and action under IT act should be taken on accused “tax Practitioners” under IT Rules

  6. M.T. VIJAYARAGHAVAN says:

    THERE ARE SO MANY FRAUDS ACCURING IN HIGH REFUND FOR CHENNAI RAILWAY EMPLOYEES ALSO(HEAD QUARTERS OFFICE) ON 10% COMMISSION BASIS. THEY APPROACHED ME AND I REFUSED. BUT IT IS BEING DONE BY SOMEBODY.

  7. Jossy Thomas says:

    The statement , “the accused are not Chartered Accountants but are either Tax Practitioners/Accountants/ Commerce Graduates” is not a good one. The ICAI ought to have verify the category of the accused before making such a statement. ICAI may appreciate that Tax Practitioners are also qualified and professionally practicing very well throughout India. Further it may be remembered that so many accused CAs are in India for various offences. Being a Tax Practitioner, I express my strong protest against the ICAI statement.

  8. CA Hemendra Kumar Varshney says:

    Well said, ICAI should come out with a joint press conference along with regret & apology by media on front page of news paper for damage caused to reputation of CA fraternity by few imposters & impersonators with fake identity as CA. Simultaneously, I suggest ICAI should start taking annually the signed pledge and declaration on Code of Conduct by CAs in practice and in jobs as well.

  9. vinodkumar n saxena says:

    what criminal action is ICAI contemplating aginst the accused for false claims? has a police complaint been filed for misrepresentation?

  10. CA. SUBHASH CHANDRA PODDER says:

    On going through the aforesaid news-item, ICAI, being the regulator of the profession of Chartered Accountants has taken up the matter with concerned authorities. The representatives of ICAI immediately had a meeting with Director General of Income Tax (Investigation), Bengaluru seeking details in the aforesaid matter & requested Income Tax Department to share information about the accused i.e. Nagesh Shastry.

    The Institute verified its records and found that Nagesh Shastry is not a Chartered Accountant as his name does not appear in the Register of members maintained by the ICAI. There are various fraudulent cases being reported wherein individuals/ Tax Consultants are falsely claiming to be Chartered Accountants and during preliminary investigations only it comes to the fore that the accused are not Chartered Accountants but are either Tax Practitioners/Accountants/ Commerce Graduates.

  11. CA. SUBHASH CHANDRA PODDER says:

    In view of the above, it is a matter of concern for ICAI that in the aforesaid matter neither Income tax department verified the credentials of the person in question with ICAI before issuing a statement to the media nor the Publication cross checked the validity of the statement with ICAI before publishing the story.

    The news which has appeared in a section of media certainly has maligned the reputation of Chartered Accountants in the eyes of public and has thus lowered the image and credentials of CA profession.

  12. D.P.Gautam says:

    Action from ICAI came very late

  13. D.P.Gautam says:

    The action from ICAI came very late.

  14. CA J V BHANU PRAKASH says:

    IN OUR OPINION THE INSTITUTE SHOULD CALL FOR A JOINT PRESS CONFERENCE ALONG WITH THE AUTHORITY CONCERNED WHO HAD ISSUED THE STATEMENTS TO MEDIA SO THAT THE CLARITY WILL BE THERE TO THE GENERAL PUBLIC

  15. Desikan says:

    Has the ICAI filed a criminal case against Nagesh Shastry for false representation ?

  16. S.G,RAMACHANDRAN, FCA says:

    A timely rebuttal by ICAI. It was shocking to read the news when it was published in News- papers. The Government Agencies will do well in future to refer the ICAI in such cases to protect the interest of CAs.

  17. Narayan Dass Jain says:

    The press should express regrets.

  18. CA SOHRABH JINDAL says:

    Very good step taken by ICAI. ICAI must be strict on the media section on displaying such type of news without verifying the facts.

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