[BREAKING] Companies cannot Provide Taxation Diploma and Other “Certification” Courses for Tax Practice: Karnataka HC in Interim Order in ICAI Case [Read Order]

The Karnataka High Court has issued an interim order prohibiting a company from offering courses under the name “Post Graduate Diploma in Taxation Professional Skill Qualification” in a plea filed by the Institute of Chartered Accountants of India ( ICAI ).

The Court order in the pendency of the case, prohibits M/s Institute of Chartered Tax Practitioners India from issuing licences to certify individuals as qualified Income Tax practitioners, GST practitioners, Customs brokers, or similar professionals.

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It also stops the company from enrolling people in courses related to tax law or issuing licences and certificates until the next hearing on December 9.

The petition claims that the company’s courses, particularly one titled “Post Graduate Diploma in Taxation,” are misleading. These programs are reportedly associated with Medhavi Skills University, which is recognized under the UGC Act, 1956. However, the company’s website inaccurately presents this diploma as a degree, which, according to the petition, is a deliberate attempt to confuse potential students and the public about the legitimacy of the program. The petition also accuses the company of creating bogus courses with no legal standing.

The legal challenge points out that the courses violate the Chartered Accountants Act, 1949, particularly Section 15A, which prohibits unauthorised universities or bodies from offering education in the areas regulated by the Institute of Chartered Accountants of India. The use of the term “Chartered” in the course title and the company’s name further misleads people into thinking that the organisation is a statutory body, giving their qualifications false legitimacy.

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The interim order stated as follows: —

“Daily Orders for Case

Respondent No.6 University is restrained from:

(i)    Enrolling any candidate for Post Graduate Diploma in Taxation, Professional Skill Qualification, Recognition for Prior learning and such other courses in relation to tax practice

or otherwise. 

(ii)    From issuing any licence to any person authorizing such person or certifying that person to be fit to practice as an IT practitioner, GST practitioner, Custom broker or the like.

(iii)    From enrolling any person or body under the category of affiliates, associates, fellows, honorary and academic for the purpose of offering any courses relating to Tax Law and related courses or for issuance of any licences, certificates or the like till the next date of hearing. 

6.    Process fee and copies to be furnished by the end of the day by 12.11.2024,

failing which, the interim order would stand vacated. 

7.    Relist on 09.12.2024.”

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For companies offering courses to aspiring tax professionals, this ruling highlights the serious consequences of misrepresenting educational credentials. It serves as a reminder of the legal importance of transparency, accountability, and adherence to regulatory standards.

The next hearing is set for December 9, 2024.

Course/ Academic Experience Providers in this space must ensure that their qualifications are recognized by the relevant authorities and avoid using terms that could mislead students into believing they are receiving a certification or degree that holds legal weight when it does not.

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