ICAI takes Disciplinary Action against CA for involvement in providing accommodation entries, fake bills
The case concerns CA Radhey Shyam Bansal, who faced disciplinary action by the Institute of Chartered Accountants of India (ICAI) for alleged involvement in providing accommodation entries and fake bills. The matter was addressed through an order under Section 21A (3) of the Chartered Accountants Act, 1949.
The Board of Discipline, in its report dated 30th January 2020, found Bansal guilty of professional and other misconduct under Clause (2) of Part III and Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949. Bansal was granted an opportunity to present his case before the Board on 9th March 2020.
In his oral and written representation, Bansal raised several objections regarding the legal aspects of the case. He argued that the evidence provided, including transcripts of recorded calls, lacked legal validity and failed to meet the criteria outlined in the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007. He also questioned the delay in issuing the show cause notice and the absence of essential documents such as the investigation report and charge sheet.
However, the Board deemed Bansal’s objections as already addressed in its findings and maintained that there was sufficient evidence, including transcripts of recorded calls and forensic examination reports, to establish Bansal’s involvement in providing accommodation entries and fake bills. The Board concluded that Bansal’s conduct was unbecoming of a Chartered Accountant and did not meet the ethical standards expected of him.
As a result, the Board decided to remove Bansal’s name from the Register of Members for a period of forty-five days and imposed a fine of Rs. 75,000/-. These penalties were deemed appropriate considering Bansal’s misconduct and his representations before the Board.
The decision was issued pursuant to an order passed by the Hon’ble High Court of Delhi in a related case. The presiding officer, CA Prasanna Kumar D, along with the other members, Mrs. Rani Nair and CA Durgesh Kumar Kabra, signed the order.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PPR/P/64/2014-DD/S1/INF/2014/B0D/304/2017
ORDER UNDER SECTION 21 A (3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 15W OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007.
In the matter of:-
CA. Radhey Shyam Bansal (M.No.091903), Delhi in Re:
[PPR/P/64/2014-DD/51/lNF/2014/BOD/304/2017]
MEMBERS PRESENT:
CA. Prasanna Kumar D, Presiding Officer
Mrs. Rani Nair, (IRS, Retd.), Government Nominee
CA. Durgesh Kumar Kabra, Member
Date of final hearing: 9th March 2020
Date of Order: 21-May-2024
1. The Board of Discipline vide Report dated 30th January, 2020 was of the opinion that CA. Radhey Shyam Bansal is guilty of Professional and “Other Misconduct” falling within the meaning of Clause (2) of Part III and Clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949 read with section 22 of the said Act.
2. An action under Section 21A (3) of the Chartered Accountants Act, 1949 was contemplated against CA. Radhey Shyam Bansal and communication dated 26th February, 2020 was addressed to him thereby granting him an opportunity of being heard in person and/or to make written representation before the Board on 9th March, 2020.
3. CA. Radhey Shyam Bansal appeared personally before the Board on 9th March 2020 and was put on oath since it was the first time that he appeared before it and made his oral as well as written representation before the Board. He also requested to take a lenient view in his case for award of punishment.
4. CA. Radhey Shyam Bansal in his written representation dated 8th March, 2020, inter-alia, stated as hereunder:-
(a) the Hon’ble Board of Discipline overlooked /did not consider the legal view of the matter, which should have been considered by the Hon’ble Board of Discipline, as stated hereunder:-
A. The DIG, CBI did not even file the complaint in the prescribed Form “I” as prescribed under Rule 3 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, but only provided the transcription of the recorded calls, which cannot be considered as an evidence and relied upon in the absence of call records.
B. On the basis of “self contained note” alone, the matter was treated as “Information” within the meaning of Rule 7 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007. The letter/note did not fulfil the criterion laid down u/s 21 of the Chartered Accountants Act, 1949, and as such the said note has no legal sanctity.
C. No copy of the investigation report or a copy of charge sheet has been filed by the Informant before the Director(Discipline), In absence of the copy of investigation report and Charge Sheet, the DIG in order to cover their short-comings, submitted copies of some documents (having no evidentiary value) which clearly was an afterthought to wrongly implicate the Respondent which is in violation of Rule 7(2) of “The Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007”.
D. Without copy of any investigation or any Charge Sheet, the Respondent had been implicated on mere suspicion and surmises. Informant has failed to furnish any evidence/proof substantiating such allegations; there is not even a single witness produced by the Informant to verify the veracity of such purported allegations.
E. The Show Cause Notice (SCN) dated 17.12.2014 was issued by the Ld DD, in reference to the letter dated 04.04.14 submitted by the Informant, the said SCN is itself, bad and erroneous in law. There is violation of Rule 8(1) r/w rule 11, since it is obligatory upon the Director(Discipline) to communicate the Respondent about the complaint/information within the prescribed time period of 60 days from the date of receipt of letter/note. The Director(Discipline) issued the SCN only on 17.12.2014 to the Respondent whilst the “Self Contained Note” was received by the DD from the Informant on 04.04.14, i.e. issuance of SCN after a long delay of more than 8 months. Even in the delayed SCN issued on 17.12.2014, the “Self-contained note” was not made available to the Respondent which was subsequently provided by the Director(Discipline) only after a reply was submitted by the Respondent dated 12.01.2015.
F. In PFO dated 10.03.2017 the Respondent has also been charged under clause (2) of Part Ill of First Schedule, in addition to being charged under clause (2) of Part IV of First Schedule, however, w.r.t. Clause (2) of Part Ill no SCN was issued to the Respondent and as such the Respondent has not been given the sacrosanct opportunity of being heard and right of representation.
G. The set of documents, namely C-2 to C-54, are non-est documents carrying no evidentiary value and are illegal, for the fact, that they have been submitted after the enquiry in the case was complete, and the case had been closed. The referred calls are more than 11 years old as on date and also no original tapes have made been available to the Respondent. The Respondent denies the summary interpretation of the calls as reported by the Informant since the same are incomplete, haphazard, vague and thus fabricated.
H. The Hon’ble Board of Discipline overlooked/did not consider that the Director(Discipline) without verification of facts and taking legal view stated in its PFO “it is important to note excerpts of this vety conversations that the Director(Discipline) has quoted in the para 8.1 to 8.3 of his PFO and expressed his view that the conduct of the Respondent is far from the highest ethical standards expected of CA and hence considered him guilty.”
I. The reproduction of only an excerpt from the entire conversation is greatly prone to the risk of misplacing the context in which certain words or statements were being made. Only if the whole transcript of the alleged call is read comprehensively, can it be clear that such conversation is happening in the context of events that had been happening around the Respondent in the various cases of search and seizure. the Respondent and his associate are found to be discussing the various act of conduct/ misconduct that are taking place in the society around them and are seen expressing their discomfort around it. But at no point in the conversation, has the Respondent suggested any action taken or any intention of any such action which could tantamount to professional misconduct.
(b) The PFO fails to establish the fact that the Respondent is prima facie “guilty” of Professional Misconduct falling within the meaning of the clause (2) Of Part Ill of First Schedule to the Chartered Accountants Act 1949.For charge under Clause (2) of Part Ill of the First Schedule, the Respondent has adequately supplied the information called for, by the Director(Discipline), by way of Respondent’s written submissions and replies. In fact, the Respondent has submitted five replies to the office of the Director(Discipline) — dated 8 May 2015, 3 Nov 2017 and 20 Nov 2017,01st January,2020 and 07th January,2020.ln response to the notice of Director(Discipline) dated 17 Dec 2014, the Respondent duly submitted his reply dated 8 May 2015 wherein it was clearly stated by the Respondent in no part of the forensic examination report, the name of Respondent has been mentioned or identified in reference to any of the calls/conversations that have been mentioned.
The above reply dated 8 May 2015 was submitted by the Respondent even in absence of any Charge-Sheet and investigation report, which is clear from the fact that the Director(Discipline) demanded copy of Charge-Sheet from the Complainant only on 15.06.2016, which Charge-Sheet, investigation report has not been provided till date and in absence of which, the Respondent furnished his written-submissions. Further, in response to Respondent letter dated 03rd November,2017 the Director(Discipline) vide letter dated 7 November 2017 allowed the Respondent, additional time to furnish the written statement by 20 November 2017, which were duly submitted by the Respondent on 21st November 2017. Thus, the Director(Discipline) cannot now retract from his statements containing evidentiary value namely letter dated 7 Nov 2017 of granting additional time to the Respondent to file his written submissions, which submissions were duly filed and now hold afresh the Respondent guilty vide the PF0 in altogether a new clause i.e. Clause (2) of Part Ill of First Schedule, under which clause the Respondent was never charged/implicated as per the SCN dated 17.12.2014.
(c) The Respondent reiterated his objections raised on non-fulfillment of requirement as stipulated in clause 2 of part IV of First schedule of code of ethics of ICA’.
(d) The Hon’ble Board of Discipline failed to appreciate the fact that the Complainant has annexed sham documents with his complaint.
5. The Board has carefully gone through the facts of the case and also the oral and written representation of CA. Radhey Shyam Bansal. Considering the above submissions, the Board was of the view that the said contentions were raised by. the Respondent at the time of hearing also and had been duly countered in the findings of the Board.
6. Thus, the Board was of the view that as per the findings of the Board as contained in its report there are sufficient evidences such as self-contained note of the CBI, forensic examination report, calls transcript, etc. to suggest that the conduct of the Respondent in allegedly being involved in providing accommodation entries, fake bills, etc. is unbecoming of a Chartered Accountant and not befitting of the highest ethical standards expected of him. Thus, it has already been conclusively proved that the Respondent is Guilty of Professional and Other Misconduct falling within the meaning of Clause (2) of Part III and Clause (2) of Part IV of the First Schedule of the Chartered Accountants Act, 1949 read with Section 22 of the said Act.
7. Upon consideration of the facts of the case, the consequent misconduct of Radhey Shyam Bansal and keeping in view his written and oral representation before it, the Board decided to remove the name of CA. Radhey Shyam Bansal (M.No.091903) from the Register of Members for a period of Forty Five (45) days and also imposed a fine of Rs. 75,0001- (Rupees Seventy Five thousand only) upon him payable within a period of 60 days from the date of receipt of the Order.
This is issued pursuant to the Order dated 29th April 2024 passed by Hon’ble High Court of Delhi in W.P.(C) 5247/2024 namely ICAI Vs R. Vinod Kumar & others.
Sd-
CA. PRASANNA KUMAR D
(PRESIDING OFFICER)
Sd/-
MRS. RANI NAIR, (IRS, RETD.)
(GOVERNMENT NOMINEE)
Sd/-
CA. DURGESH KUMAR KABRA
(MEMBER)
