False certificate by professional for claiming deduction amount to misconduct as per sec 22 read with sec 21 of the ICAI Act 1949

Last updated: 12 March 2012

Court :
HIGH COURT OF DELHI

Brief :
The facts which emerge from the record are that the Commissioner of Income Tax, New Delhi (hereinafter referred to as „the complainant‟) sent a complaint dated 7th November, 2002 in which following allegations were made by him:- “Shri Subhash Chand Jain is Proprietor of M/s Jain Sons Exports India (hereinafter referred to as the “Firm”). He is being assessed by ACIT, Circle 19(1), New Delhi. During the course of assessment proceedings for A.Y. 98-99, the Assessing Officer has noted that Shri Subhash Chand Jain‟s export turnover was Rs. 82,51,043/- and his export profit was Rs. 18,32,985/- In the normal course of things, the assessee should have paid tax on this amount either by way of advance tax or self assessment tax. But in this case, the assessee has claimed deduction under Section 80HHC to the tune of 100% of profit i.e. Rs. 18,32,985/-. For the aforesaid purpose, the assessee has filed a certificate as required under Section 80HHC (4) and 80HHC(4A) in the Form No. 10CCAC. The said certificate has been issued by the Respondent on 20.6.1998. It has been certified vide para 2 9a) of the said certificate that the deduction to be claimed by the assessee under sub-Section (i) of Section 80HHC of the I.T. Act, 1961 in respect of A.Y.1998-99 is Rs. 18,32,985/- which has been determined on the basis of said proceeds received by the assessee in convertible foreign exchange.

Citation :
`COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA. …..PETITIONER Through:Mr. Rakesh Aggarwal, Advocate. Versus AJAY KUMAR GUPTA …..RESPONDENT