Case Law Details
The Institute of Chartered Accountants of India & Ors. Vs. Shaji Poulose & Ors. (Supreme Court)
In the writ petitions, which are sought to be transferred, writ petitioners have challenged validity of Chapter VI of Guidelines No.1‑CA(7)/02/2008 dated 08.08.2008 issued by the Council of petitioner Institute on the ground that the same is violative of Article 19(1)(g) of the Constitution of India. The said Chapter VI of the Guidelines dated 08.08.2008 stipulates that a member of the Institute in practice shall not accept, in a financial year, more than the “specified number of tax audit assignments”, which is at present 60 under Section 44AB of the Income-tax Act, 1961. Further, Section 22 of the Chartered Accountants Act, 1949 defines “professional or other misconduct” to include any act or omission provided in any of the Schedules to the Act. Clause (1) of Part II of the Second Schedule to the Act stipulates that a member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct if he contravenes any of the provisions of the Act or the regulations made thereunder or any guidelines issued by the Council of the Institute. As such, if a member of the Institute contravenes the provisions of the aforesaid Chapter VI of the Guidelines dated 08.08.2008, he shall be deemed to be guilty of professional misconduct under the Chartered Accountants Act, 1949.
Learned senior counsel submits that in order to avoid multiplicity of proceedings, conflict of decisions and also settle the law comprehensively, which is a question of law of general public importance, the Institute of Chartered Accountants of India being the regulatory body for the profession of Chartered Accountants has filed the present transfer petitions for transfer of all the aforesaid writ petitions to this Court for final and conclusive determination of the issues involved.
The fact that this Court on 03.04.1991 had dismissed the Transfer Petition Nos.614-615 of 1990 observing that the concerned High Courts may dispose of the writ petition on early date cannot be treated any kind of bar in transferring the writ petition in the present batch of cases. At the time when the earlier transfer petition was dismissed, conflicting judgments on subject in issue by different High Courts had not come. As noted above, with respect to the cap on the number of audits, there are conflicting judgments of different High Courts taking different views on the similar guidelines. Further, this Court’s judgment in Institute of Chartered Accountants of India versus Southern Petrochemical Industries Corporation Limited and another (supra), transferring the writ petition to one High Court i.e. Calcutta High Court does not preclude the consideration of prayer of the petitioner for transferring the writ petitions to this Court in present matter.
The guidelines which are impugned in the High Court and consequent disciplinary proceedings initiated against various chartered accountants throughout the country is an issue of public importance affecting Chartered Accountants as well as the citizens who have to obtain compulsory tax audits. We are satisfied that to settle the law and to clear the uncertainty among tax professionals and citizens, it is appropriate that this Court may transfer the writ petition, to authoritatively pronounce the law on the subject.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
