ICAI member is not required to verify genuineness of supporting documents while issuing 15CB certificate
High Court said on 23.11.2022 in a CA’s criminal case held that a CA in India while issuing Certificate 15CB is needed to only examine the remittance nature & Nothing more on that. CA is not needed to go into genuineness or otherwise of documents file by the respective clients. (Madras High Court - Criminal Revision Case No.1354 of 2022)
These corporations are being looked into by the DGGI for allegedly setting up shell companies to pay huge commissions and hiding the payments under other headings to lower the tax outlay. According to sources cited by the economic times on November 12, the Mumbai branch of the Directorate General of GST Intelligence had called CEOs from various companies and conducted inspections.
"Income Tax Dept is currently looking into commission agents. insurance businesses would also be required to explain once they are under investigation, depending on the results of the investigation, said a senior income tax official.
In the Goods and services tax matter/ case, executives from the insurance business argued that the government was improper to tax marketing and sales-related costs since they were mistakenly seen as commission on services. They claimed that what the GST authorities were contesting were reasonable, non-taxable costs associated with the sale of goods.GST Dept or agency is looking into transactions involving these companies totaling more than 5,000 crore and more than 500 crore in GST.
This may be compared to the legal opinions typically provided by banks' panel lawyers after carefully reviewing title papers without examining their validity. A panel advocate who offers an opinion based on title documents but has the means to investigate their veracity cannot be penalised alongside the primary criminal. Using the same anomaly, we determine that the prosecution of Murali Krishna Chakrala cannot be upheld given the relevant facts and circumstances.
Above Ruling is from a High Court rather than the Supreme Court:
ICAI Members should also take care the below points while dealing with 15CB certificate
- In order to protect Chartered Accountant professional interests, chartered accountants should start making the following remark in every 15CB certification because.
- 15CB certificate is mainly issued on basis of documents present by payer without recording any satisfaction on the valid legal documents in relation to transfer rather than basis of forged documents
- It goes without saying that even after the petitioner's chartered accountant was released from the prosecution, he was called as a prosecution witness in this case concerning foreign payments made using fraudulent paperwork.
- However, it is also desirable for the certifying chartered accountants to use his appropriate audit skills to make a more research on the veracity of customer. Required documents and statements besides track of earlier payments to foreign parties.
- further it is essential & desirable for CA’s s fidelity & The Institute of Chartered Accountants of India to raise their fees scale for such issuance of 15CB certifications considering amount of risks & exposure associated as in this case such a 15CB certificate has been issued at a mere fee of eight hundred repress only.