ICAI Reprimands CA for Helping Clients Claim Fake Tax Deductions Through Bogus Political Donations

The Institute of Chartered Accountants of India (ICAI) has reprimanded a Chartered Accountant after finding her guilty of professional misconduct in a fake Political Donation Scam.

Ms Padmini Solanki, the Deputy Director of the Income Tax Department, filed a complaint against CA Pooja Kushal Shah (respondent) for the alleged involvement in tax evasion through the political parties. The case started when a search and seizure operation was carried out by the complainant on some political parties and charitable institutions.

During the search, the department found that the respondent, along with other CAs, had helped their clients in reducing their taxable income by claiming fake deductions against the political donations. The clients allegedly transferred money to the political parties or trusts, received donation receipts and later got their money back in cash after deduction of the commission of the respondent.

The respondent, CA Pooja Shah, accepted her involvement in this scam. She submitted that she and CA Archit Shah were a part of an oral partnership, where they agreed to share all the proceeds from the scheme in a 50:50 ratio. She said that she used to earn Rs 43,000 to Rs 45,000, which she also disclosed in her income tax return (ITR). However, she said that her involvement was unintentional. She cited her personal hardships in establishing her career as a chartered accountant.

After examining the case, the board noted that the income tax department had not initiated reassessment proceedings against her and no action was taken against the political parties involved. Considering this, the ICAI Board of Discipline held CA. Pooja Kushal Shah guilty of Other Misconduct falling within the meaning of Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 and decided to Reprimand her.