ICAI finds CA Not Guilty in CBI Trap Case Linked to Income Tax Bribery with Tax Officer

The Board of Discipline (BoD) of the Institute of Chartered Accountants of India ( ICAI ) has held Chartered Accountants not guilty of professional misconduct in a case linked to an alleged bribery with Income Tax Officer.

The CBI filed a complaint against CA Samrat Chandra, the respondent before the ICAI to initiate disciplinary proceedings. The complaint was based on the investigation of CBI on alleged corruption involving JTPL officials and an Income Tax Officer.

As per CBI, an income tax raid was conducted at JTPL and they wanted to release ₹7 crore in fixed deposits, which guaranteed loans for Shyam Vanaspati Oils Limited.

According to the complaint, Pratyoosh Kumar Mishra (PKM), the authorised representative of JTPL, approached Dharamsheel Agarwal, an Inspector in the Income Tax Department, regarding the matter. It was alleged that the Income Tax Officer demanded a bribe of ₹60 lakh for resolving the issues connected with the seized deposits.

Acting on PKM’s complaint, the CBI registered a criminal case and initiated trap proceedings. During the operation, PKM allegedly handed over ₹10 lakh to CA Samrat Chandra, the respondent on the instructions of the Income Tax Officer.

The Chartered Accountant was subsequently arrested by the CBI during the trap proceedings and later charges were filed against both the Income Tax Officer and the CA under provisions of the Prevention of Corruption Act, 1988 relating to conspiracy and bribery.

However, the CA denied involvement, stating he was not named in the original FIR and the complainant never accused him of demanding a bribe. He argued there was no evidence of a conspiracy or prior arrangement with the IT Officer.

Furthermore, prosecution witnesses testified that the CA neither demanded nor accepted the bribe, and had instead instructed the complainant to hand the packet directly to the IT Officer.

The Chartered Accountant cited the High Court's bail observations, which found no evidence of criminal intent (mens rea) in the transcripts. He argued that knowledge and intention essential elements of bribery were entirely absent, emphasizing his unblemished decade-long professional record.

The Board observed that the money was intended for the Income Tax Officer, and the CA only counted it at another's insistence. Merely handling a packet without prior knowledge of its contents does not prove misconduct.

Once the CA realized the packet contained money, he refused it and instructed the complainant to hand it directly to the IT Officer, noted the ICAI board. Recordings and witness statements confirmed the CA never demanded or consciously facilitated a bribe.

Therefore, the disciplinary board concluded that the essential elements of knowledge and intent were unproven. Consequently, without deliberate involvement in the bribery transaction, the CA's actions do not constitute “Other Misconduct” under the Chartered Accountants Act, 1949.

Accordingly, the ICAI held CA Samrat Chandra not guilty of professional misconduct and ordered closure of the proceedings under Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.

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