Falling Standards of CAs - ITAT comes down heavily
IN a recent order, the Mumbai Bench of the ITAT observed,
We are aware that the Chartered Accountancy profession commands high respect and value with one and all, because of their core expertise and knowledge. Their domain expertise and practical approach adopted by them to address the problems enable them to give near perfect advice in a given situation and hence tax payers and tax gatherers repose confidence in them. These kind of domain expertise could be achieved by a C.A due to strict training methodologies adopted by and also high level of standards maintained by the Institute of Chartered Accountants of India (ICAI), its vast and versatile curriculum, tough examination pattern, continuous updating of curriculum etc.. Most of all, the practical on-site training obtained by the students from a practicing Chartered Accountant that too during the period of study itself, makes the C.A course a unique one. The cumulative effect of these methodologies makes the students a perfect Chartered Accountant having high caliber, ability, high standards etc., and hence they are enabled to set up their own practice from day one itself. Though the Chartered Accountants are having domain expertise in accountancy and auditing areas, yet the training they undergo as well as the curriculum of C.A course makes them a best tax professional also.
Another important feature is that the ICAI ensures that the Chartered Accountants are updating their knowledge with current topics and also current developments that take place and the same is sought to be achieved by the ICAI through the Continuing Professional Education (CPE) programs.
Noticing that a CA might have given patently wrong advice to an assessee regarding filing of an appeal, the Tribunal observed,
…. it may be showing signs of deteriorating standards with some of the Chartered Accountants in profession, which needs to be stopped on war footing by the ICAI. ….if it is presumed for a moment that all the C.A.s have concurred with the said view, then it only shows that the C.A profession is losing its grip over the Income tax matters, which is another cause of concern for ICAI. The self-study model coupled with ‘on-site articled clerk training' embedded in the Chartered Accountancy course aims to achieve high quality education and training through undergoing practical training, inculcating the habit of thinking, self-introspection, application of mind, analytical ability etc. and they enable the C.A students to have strong grip over the subjects and also to attain expertise in them. The commendable feature of the C.A course is that, as stated earlier, the C.A students are trained by the practicing Chartered Accountants during their articled clerk training program. Thus, the methodology adopted by the ICAI enabled the C.A. students to become a thorough professional with versatile knowledge and innovative mind. We notice that, in the recent past, the methodology of self-study is given a go-by by some of the C.A students and they have started depending more and more on the Commercial Coaching Centers, who undertake coaching of various subjects in the class room model. We notice that the ICAI does not appear to have taken steps to contain mushrooming growth of such coaching institutes, which indulge in manufacturing of Chartered Accountants through class room model, which may ultimately have undesirable effect on the quality of Chartered Accountants, since the habit of thinking, introspection, application of mind is replaced by spoon feeding, which kind of teaching discourages independent thinking. There should not be any controversy on the fact that the Chartered Accountants, till date, have occupied pioneer position vis-à-vis their counterparts in other parts of the World. They also contribute a lot to the building, sustenance and growth of our National economy. Any compromise on the quality of Chartered Accountants would not only affect our Country very badly, but is also expected to endanger the pioneer position enjoyed by the Indian C.A fraternity vis-à-vis their counter parts in other parts of the world. In our view, the ICAI should seriously take note of these alarming practices slowly emerging in our Country and should take appropriate corrective steps, lest the confidence reposed in C.A.s by the public should get diluted.
Disciplinary Action Recommended: The ITAT suggested disciplinary action against the CAs observing:
If it is considered that the C.A firm has colluded with the assessee for giving such kind of affidavit, then it only warrants disciplinary action against them. Even, if it is considered that the said C.A. firm has really given such advices, then also it may require disciplinary action against them for giving such kind of advices, without proper verification of facts and without proper consideration of law. In our view, strict actions and fast disposal of disciplinary proceedings would not only instill discipline among the C.A fraternity, but also help curtail these kind of undesired practices adopted by some of the Chartered Accountants.
The ITAT had some harsh words for the Income Tax Department too.
At this juncture, we feel it necessary to highlight the lethargic approach adopted by the revenue in the instant cases. In these cases, the revenue is aware of the fact that these appeals are delayed by 2984 days (more than 8 years) and such delay cannot be considered as normal. From the fact sheet filed by the assessee, we notice that the assessee has claimed to have received the orders dated 01-02-2000 passed by Ld CIT(A) only during March, 2003, i.e.,after a gap of more than three years. We notice that the assessee has computed the delay period of more than 8 years from March, 2003 only, i.e., from the date of receipt of first appellate orders as claimed by the assessee. If we add the delay of three years to the existing period of delay, the period of delay would be increased by three more years. Thus, the assessee has simply put the responsibility upon the revenue for a delay of three years. When these kinds of averments are made, it is normally expected that the revenue should verify the appellate/assessment records to find out the veracity of such explanations. It is unfortunate that the revenue did not care to verify the records to find out the veracity of the said submissions. Further, the revenue has also not chosen to counter the averment made in the affidavit by furnishing any other counter affidavit / explanations. The Department Representatives, posted to argue the case of the revenue, should be aware that they are “Officers of the Court” and it is their primary duty to assist the bench to arrive at a fair and reasonable conclusion on the issues contended by either of the parties. It is unfortunate that we did not get any kind of assistance from the Ld D.R in this regard .