The Institute of Chartered Accountants of India (ICAI) found Chartered Accountants (CA) guilty of reporting irregularities in Income Tax Return (ITR) while Sanctioning loans based on Fake ITR and Challan.
CA. Bharath Kumar P Jain, the respondent was the concurrent Auditor of the Complainant Bank appointed for the period 01/10/2014 to 30/09/2016 and failed to report irregularities committed in the Jayanagar Branch of the Bank (0623) about home loans and property loans that were sanctioned against fake ITRs and challan receipts.
As per the Complainant, most of the challans were devoid of BSR code, Challan Serial Numbers and affixed fake rubber stamps or Rental & Agricultural income were shown in the ITRs as other income without any supporting house or property documents
In a few cases, income was inflated to get higher loans, home loans or property loans being sanctioned without a certified copy of the sale deed and/or approved Building Plans or non-considering the qualified CIBIL reports of borrowers and also branches exceeding its lending powers.
An action under Section 21B (3) of the Chartered Accountants Act, 1949 was contemplated against the Respondent. The Respondent argued that, the Complainant had not submitted any of the fabricated challans or fake ITRs before the Committee and that as per him, being concurrent auditor, he could not be held liable for verification of genuineness of the ITRs of the prospective borrowers.
Further argued that it was not necessary that on selective verification of the alleged loans documents, he would have come across the Challans without BSR Code or Challan without Serial Numbers, hence, as per him, in such a situation the observation that such verification would have raised an alarm on the part of the Respondent is a post facto observation.
The Respondent further stated that there was no financial loss to the bank on account of alleged fake lTRs, alleged fake tax challans, building approval plans, title deeds or qualified ClBlL Reports which were forming part/not forming part of the documentation. He argued that the Complainant had not substantiated any loss incurred by the Bank as the borrowers repaid their loans fully.
The Committee comprising Smt. Anita Kapur, Dr. K. Rajeswara Rao, CA. Vishal Doshi and CA. Sushil Kumar Goyal viewed that the misconduct on the part of the Respondent has been held and established within the meaning of Item (7) of Part-I of the Second Schedule to the Chartered Accountants Act, 1949.
The Committee ordered that the Respondent CA. Bharath Kumar P Jain be Reprimanded.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
