Wednesday, September 9, 2015

ITAT withdraws adverse remark against ICAI and its members; it conveyed unintended message to public

IT: The Tribunal had made certain observations about CA profession, the conduct of students pursuing the CA courses and also about the ICAI in its order. ICAI was of the view that such observations of ITAT had been viewed by public at large that ITAT had found fault with conduct of ICAI. Thus, ICAI filed miscellaneous application for removal of such observations. ITAT was of the view that such observations had not conveyed the intended message, thus, it replaced that paragraph (containing such observation) of its order.- Vijay V. Meghani v. ACIT [2015]

61 taxmann.com 114 (Mumbai - Trib.)


Facts:


a)    The Institute of Chartered Accountants of India (ICAI) had filed this miscellaneous application with the submissions that some of the observations made by the Tribunal in case of Vijay V. Meghani v. Dy. CIT [2014] 49 taxmann.com 88 (Mumbai - Trib.) had resulted in a mistake apparent from record and, hence, the same needs rectification under Section 254(2) of the Income-Tax Act.

b)    The Ld. Counsel appearing for ICAI had submitted that Tribunal had made certain observations about CA profession, the conduct of students pursuing the CA courses and also about the ICAI in the impugned order. Such observations made by the Tribunal in paragraph 9.6 of the order had been interpreted or understood by the public at large in a manner that the Tribunal had found fault with the conduct of the ICAI. Accordingly, he submitted that such observations made by the Tribunal had led to unintended results affecting reputation of ICAI.


c)  Paragraph 9.6 is reproduced below:“However, if it is considered for a moment that the above said C.A firm has really given such advice to the assessee herein and accordingly it has furnished the letter and affidavit, then, in our view, 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…

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…

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”.

Held:


1) The observations made by the Tribunal about the CA profession and conduct of the students pursuing the CA course were not necessary to adjudicate the issues that were urged before the Tribunal by the appellant, Sri Vijay V Meghani. However, the Tribunal being a part of Government of India, should not shut its eyes when it notices that certain developments occurring in the Country may affect the Country as a whole, more particularly when the reputation of particular profession, from whom the Tribunal is getting assistance in the dispensation of justice, is at stake. There cannot be any controversy that the interest of our Country is supreme and no citizen can or should compromise on the same. The observations were made in the impugned order in that context only and it was not the intention to target any particular person or the ICAI.2)  The observations made by the Tribunal in the later part of paragraph 9.6 were intended to highlight or reiterate the importance of the articled clerk training and the self-study model conceived by the ICAI and the same was intended only to give a wake-up call to the students pursuing C.A profession. However, it appeared that the observations made in paragraph 9.6 had not conveyed the message intended by the Tribunal.

3)  According to Ld. Counsel, the said observations had given room for misinterpretation and resultant controversies. Accordingly, the paragraph 9.6 of the order was modified as under:
“However, if it is considered for a moment that the above said C.A. firm has really given such advice to the assessee herein and accordingly it has furnished the letter and affidavit, then it is
“However, if it is considered for a moment that the above said C.A. firm has really given such advice to the assessee herein and accordingly it has furnished the letter and affidavit, then it is
a cause of concern to one and all. We have already noticed that 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. The articled clerk training conceptualized in the C.A education inculcate 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 help achieving expertise in the domain fields. The commendable feature of the C.A Course is that, as stated earlier, the C.A students are given training by practicing Chartered Accountants during their articled clerk training program. Thus the methodology adopted by the ICAI enables the C.A. students to become thorough professionals with versatile knowledge and innovative mind. The practical training given by the practicing Chartered Accountants during the articled clerk period, in our view, is the fulcrum centre of the study module of the C.A course and the students pursuing the C.A course should and must utilize the opportunities provided to them or encountered by them during the articled clerk training period to the maximum possible extent. In the recent past, a number of Coaching institutes have been established to give coaching to the students pursuing C.A course. While the self study model and articled clerk training may be supplemented with the coaching given by such institutes, any compromise on the practical training intended during articled clerk period or mere obtaining a C.A degree without practical training would not make the students full fledged chartered accountants and the same would go against the self study model conceptualized by ICAI and there should not be any doubt that it may have undesired results, which may affect the Country as a whole.”



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