CA’s Must Not be Treated as Accused Without Proof: CAAS Writes to Police Commissioner Over Unfair Treatment of CA in Investigation

The Chartered Accountants Association of Surat (CAAS) has recently submitted a representation to the Commissioner of Police, where the association has highlighted many issues about how one of its members was being treated during an ongoing investigation.

The CA member was required to be presented before the Economic Cell of the police for questioning about an investigation of a company, Mahalaxmi Jewels, Bangalore and associated entities. The Association claimed that CA had only performed his duty of filing Income Tax Returns and GST Returns and was not involved in the transactions.

However, the CA was still allegedly asked to present for questions without any written communication. It was claimed that the investigating officer directed the CA to sign and stamp GSTR-2B and GSTR-3B documents in the same way as an Audit Report. The officer reportedly threatened the CA that if he did not appear, strict action would be taken, such as picking him up and seizing his computers, laptops, and professional records. CAAS highlighted that these threats and orders violate the principles of professional communication and harm the dignity of a CA.

The association also referred to the Supreme Court Decision in K. Murali Krishna vs. Deputy Director, Directorate of Enforcement (SLP (Crl.) Diary No. 8123/2024) dt. 18/03/2024, where it was held that a Chartered Accountant need not check the genuineness of the commercial transactions or authenticity of documents beyond the scope of their engagement.

Section 126 of the Indian Evidence Act was also cited, which provides that a CA cannot be forced to disclose information shared with them during their work. Additionally, the association highlighted the guidelines issued by the Institute of Chartered Accountants of India (ICAI), which say that the investigating authorities must cooperate with ICAI and follow a protocol before taking a coercive action against a CA regarding his professional work.

The CAAS has requested the commissioner to issue directions to avoid any coercive actions against CAs and ensure CAs are not treated as accused without strong proof. It also requested to make the investigating officers aware of the responsible and privileged nature of communications between a CA and his client.

This representation was submitted with the aim of protecting professional communication, following ICAI’s rules, and avoiding violating the Code of Ethics.