ICAI Removes CA from Membership for Three Months Over Rs. 3.26 Crore Fake Donation Scam:

ICAI Removes CA from Membership for Three Months Over Rs. 3.26 Crore Fake Donation Scam The Institute of Chartered Accountants of India (ICAI) has taken disciplinary action against a Chartered Accountant (CA) named Dinesh Kumar Agrawal, alleged for professional misconduct. The present action has been taken following an investigation carried out by the Central Bureau of Investigation (CBI), which unearthed a large-scale fraudulent scheme that misused the name of an existing charitable trust, namely the Indian Medical Scientific Research Foundation (IMSRF), Rajkot. It was uncovered that during the period between 2003 and 2005, several fraudulent bank accounts were opened in the name of the said trust in various banks. These accounts were used to deposit donations amounting to about Rs. 3.26 Crores, which were thereafter siphoned off through bogus trusts. These funds were then sent back to their donor companies after deduction of a certain commission. This helped companies to avail illegitimate tax benefits. The investigation further noted that the actual IMSRF trust had granted exemption as per the IT Act beyond March 31, 2003, which ultimately makes these complete donations eligible for tax relief.

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The alleged CA was discovered to be a key member of this group. He was charged by the CBI under Sections 120B, 420, 467, 468, and 471 of the Indian Penal Code and was arrested in January 2008 and later released on bail. During the ICAI disciplinary proceedings, the CA failed to present before the ICAI disciplinary proceedings, even though several opportunities were granted to him. However, he stated that the non-participation was not deliberately done. Procedural delays, incomplete documentation, and health issues were the key reasons for his non-participation. However, the board stated that he was given multiple and enough chances to present himself; this clearly reflects his negligence towards compliance processes.

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The board examined key documents related to the case, including bank records, PAN applications, witness statements, and prior disciplinary history; all these documents supported his involvement in the misconduct. After reviewing the case from one side, the ICAI Board of Discipline held CA Dinesh Kumar Agrawal guilty of other misconduct falling within the meaning of Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949, read with Section 22 of the said Act. Considering the seriousness of offences committed by CA and his non-cooperation, the Board removed CA's name from the Register of Members for a period of three months.