ICAI Board of Discipline Reprimands CA for Facilitating Bogus Political Donations and Tax Evasion:

ICAI Board of Discipline Reprimands CA for Facilitating Bogus Political Donations and Tax Evasion The Chartered Accountants of India (ICAI) Board of Discipline has initiated disciplinary proceedings against a Chartered Accountant (CA) named Prashant Suryakant Dalai, in conclusion to a complaint filed by the Income Tax Department. The said complaint was filed following a search and seizure operation conducted by the Complainant Department in February 2021 concerning three political parties and two charitable institutions of Ahmedabad, who were alleged to be involved in a massive bogus donation and tax evasion scam. During this operation, statements of several persons, including the respondent CA, were recorded on oath under the Income Tax Act.

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The reports of the Income Tax Department indicate that the respondent acted as a mediator to orchestrate these fake political donations for his clients. These donations were transferred by the clients to the political parties using banking channels, who, in turn, generated donation receipts in the name of the client. Thereafter, the said amount was then finally returned to the clients in the form of cash after deduction of the commission of the mediators, i.e., respondent CA, in the extant matter. The respondent CA is alleged to have shared details of clients, like bank transaction proofs, with the key accused from the political party through WhatsApp groups. A further allegation against CA is that he himself claimed a bogus donation deduction and received the amount back in cash.

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The respondent CA denied all these allegations; however, the ICAI Board of Discipline cited that the respondent had made detailed admissions in his own statement on oath in June 2021 by explicitly analysing the modus operandi and accepting that he facilitated bogus donations to retain clients. He also admitted to claiming a deduction under section 80GGC and receiving the donated amount back in cash. Based on the aforesaid findings and evidence, the ICAI Board of Discipline held respondent CA guilty of “Other Misconduct” under the Chartered Accountants Act, 1949. The Board decided to impose the punishment of reprimand on the CA.