CA Reprimanded for offering Account/ Tax/ GST services for Free and promoting through whatsapp pamplets

The Disciplinary Committee of ICAI held that CA. Sunil Kumar Goyal is Guilty of Professional Misconduct for offering Account/ Tax/ GST services for Free and promoting through whatsapp pamplets.

Submissions of the Respondent:

The Respondent in his written submissions, inter-alia, submitted as under:-

a. The impugned prima Facie Opinion dated 06 April, 2021 sent by letter dated 27th July, 2021 and received on 2nd August, 2021 whereby which Director(Discipline) had formed an opinion against the Respondent itself suffers from serious latches, the Director (Discipline) was legally bound to follow the Rules so notified vide Notification” dated 27/02/2007, whereby which Director (Discipline) could form the basis of the initiating the disciplinary proceedings against the professional like the Respondent.

b. From the alleged pamphlet, no case is made out, portraying a distorted and incorrect picture of the facts of the case and in turn mislead the Director (Discipline), leading to an undue, irretrievable loss to the Respondent. The alleged pamphlet a non-verifiable evidence is void ab initio and should have been dismissed at the very threshold.

c. This act on the part of Director (Discipline) clearly violates the procedure laid down in the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct of Cases) Rules, 2007. The matter was treated as Information Case with incomplete information and the allegations could not be substantiated, within the meaning of Rule 7 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct of Cases) Rules, 2007, thus, the basic latches of the initiation of this case against the Respondent is non-availability of any information and complaint in a manner so prescribed under Rule 7(1) goes to the root of the matter which vitiates the entire process.

d. The Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 are binding upon the Director Discipline in view of Section 21 (4) of the Chartered Accountants Act, 1949 as amended in 2006.

e. The proceedings in respect of any information case should have been dealt with in accordance with the procedure laid down in the Rules and in this case, non-compliance with Rule 7(2) to correspondence with the informer whether he (Sic. the Informant) likes to file formal complaint was made, no such procedure has been followed by the Director (Discipline) before dealing with the information/ complaint. Further, the Director(Discipline) has not considered these points before forming his PFO or in the PFO itself.

f. The Director (Discipline) did not even bother to examine the Complainant who was treated as informant in this matter goes to the root of the matter in as much as depicts that no serious effort was made towards finding out the truthfulness of the allegations which is mandatory on the part of Director Discipline in view of Rule 9 of Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 and Section 21 (2) of the CA Act which cast a duty on Director (Discipline) to form PFO after following the procedure provided in Rules 2007 as per Section 21 (4) of the CA Act.

g. Even if the Respondent did not produce some material evidence to defend himself, that would not lead to the inference that the charges against him were proved.

h. In the case of V Shubash Vs DD, ICSI in appeal No.6/ICSI/2001, it was held that If the Institute had received information, it should have been sent to the Director (Discipline) in the form of a complaint. The Rule 7(1) requires that any written information containing the allegation against the member received in person, by post or courier, by the Directorate Which is not in form-1 under sub rule 3(1) hall be treated information received under section 21 of the Act and shall be dealt in according with provisions of these rule.

i. The showcause notice was issued In gross violation of the Rule 7( 1) and Rule 7(2) without justifying the satisfaction of the basic requirement of Rule 7 (1) and Rule 7 (2).

j. The information was treated serious misconduct in the first instances before compliance of Rule 8 and even clause of misconduct was specific in the notice without compliance of Rule 9, completing the investigation and without any authentic documents in hands of Director(Discipline) at the time of issuing the notice. Hence notice was issued without application of mind and was without actual examination of information In hand in complete violation of Rule 8 and 9.

Other Submission were also made.

Observations of the Board:

The Board observed that the Respondent raised certain technical objections with respect to the initiation of the instant case and decided to deal with the same before arriving at its Findings on the conduct of the Respondent:

As regards, the preliminary objection of the Respondent that the procedure provided under the CA Rules, 2007 was not properly followed by the Director (Discipline) and the case was initiated on the basis of non-verifiable evidence, the Board took into view the provisions of Section 21 (2) and Sec 22 of the Chartered Accountants Act, 1949 wherein it is provided respectively as under:-

Sec 21 (2) -“On receipt of any information or complaint along with the prescribed fee, the Director (Discipline) shall arrive at a prima facie Opinion on the occurrence of the alleged misconduct.”

Section 22 of the Chartered Accountants Act, 1949:­

“Professional or Other Misconduct Defined

For the purposes of this Act, the expression “professional or other misconduct” shall be deemed to include any act or omission provided in any of the Schedules, but nothing in this Section shall be construed to limit or abridge in any way the power conferred or duty cast on the Director (Discipline) under sub-section (1) of Section 21 to inquire into the conduct of any member of the Institute under any other circumstances.”

The Board viewed that the extant disciplinary action against the Respondent was initiated on the basis of information received by the Examination Department of the Institute and after issue of proper formal correspondences. Also, due procedure had been followed while treating the case as ‘Information’ against the Respondent. Accordingly, the plea raised by the Respondent is not sustainable.

The Board further opined that proceedings before it are quasi-judicial in nature where the misconduct can be proved by preponderance of probabilities having regard to the conduct of the Respondent which is distinct from Criminal proceedings where the misconduct has to be proved beyond reasonable doubt. While coming to the said view, the Board took into consideration the decision of the Hon’ble Supreme Court in the matter of “Ajit Kumar Nag -vs General Manager (PJ) Indian Oil Corporation Limited-AIR 2005 SC 4217 wherein the Hon’ble Apex Court held as under:-

“The degree of proof which is necessary to order a conviction is different from the degree of proof necessary to record the commission of delinquency. The rules relating to appreciation of evidence in the two proceedings is also not similar. In criminal law, burden of proof is on the prosecution and unless the prosecution is able to prove the guilt of the accused ‘beyond reasonable doub’t he cannot be convicted by a Court of law. In a departmental enquiry penalty can be imposed on the delinquent Officer on a finding recorded on the basis of ‘preponderance of probability’.”

Thus, the Board viewed that the plea raised by the Respondent is not sustainable. Accordingly the case was dealt with on its merits by Board of Discipline, keeping in view the submissions and documents on record.

The Board noted that the case against the Respondent was that an advertisement was circulated on ‘WhatsApp’ social media platfom1 wherein he was shown offering his services free of cost in the areas of Accounts/ Tax/ Returns GST/ Audit/ New Carriers in the prevalent Covid-19 pandemic situation to derive benefits by promoting his practice.

The Board observed that the WhatsApp message was printed on pamphlet and circulated through WhatsApp containing address of the Respondent along with his contact details. The Board further observed that “Sunil Goyal, Chartered Accountant Team 100” was mentioned in the said pamphlet which clearly indicates that the Respondent is trying to show himself superior to others by mentioning the phrase Team 100 with an intention to solicit new Clients through advertisement. It is clearly appearing that the details of Respondent. Chartered Accountant Team 100 is nothing but an attempt of publicity to attract the new clients. It is also not permissible for a member to address letters or circulars to persons who are likely to require services of a Chartered Accountant since it would tantamount to advertisement. Professional work can only be obtained by a member gradually building confidence in his ability and integrity. A public advertisement is likely to lead to an impression that the professional person is over-anxious to win Confidence which however will have the opposite effect. The satisfaction of clients woulc1 be the best advertisement which would lead to other clients. An advertisement is not a key to success in the profession. It is the quality of service which attracts and retains the clients.

The Board also noted that during the hearing Respondent stated that he had filed the written statement dated 22/11/2020 without weighing the implications of said submissions properly and pleaded that no cognizance be taken upon the reply dated 18th August, 2020 and 22nd November, 2020. By examining the Respondent, the Board noted that the Respondent took contrary stand in his written statement vis-a-­vis during the hearing. On one hand the Respondent admitted that he himself shared the said WhatsApp message with his client and on the other hand he took the stand that the reply dated 18th August 2020 and 22nd November 2020 was ill-advised, ill-­prepared and filed in haste without reasons and justifications and that he had no role in the circulation of the message. On further examination of the Respondent, the Board observed that the said advertisement/ pamphlet circulated through WhatsApp contained the contact details i.e. landline and mobile number which belonged to the Respondent and the address is that of his parents house. The Board also noted that despite his express denial during the hearing of not being associated with the issue of the pamphlet, the Respondent did not take any action to identify as to who had misused his name in the pamphlet.

Considering the above, the Board viewed that the use of such words/ expression tantamount to violation of said other conditions prescribed under Guidelines for advertisements for members in practice.

The Board further observed that the defense raised by the Respondent in his written submissions and at the time of hearing cannot sustain as the advertisement for attracting clients by the professionals are strictly prohibited by the Institute to regulate the conduct of members and is mandatory and binding in nature and his association with the issue of the said pamphlet cannot be denied. Accordingly, the Board viewed that Respondent is Guilty of Professional Misconduct falling within the meaning of Item (6) and (7) of Part I of First Schedule for engaging himself in creation and circulation of pamphlet containing words “SUNIL GOYAL, Chartered Accountant Team 100” and for advertising his professional attainments or services on social media platform.

Conclusion:

The Board of Discipline, in view of the above, is of the considered view that the Respondent is Guilty of Professional Misconduct falling within the meaning of, items (6) and,(7) of Part I of First Schedule to the Chartered Accountants Act 1949.

For Official Order Download PDF Given Below: