A Chartered Accountant is not required to verify the genuineness of documents submitted by clients: SC

Supreme Court has recently protected a Practicing Chartered Accountant. I that merely issuing Form 15CB under the Income-Tax Act does not amount to abetment of money laundering.

In this case, a Chartered Accountant had issued Form 15CB for remittances related to import of goods, as required by the bank. Later, the Enforcement Directorate (ED) alleged that the company had illegally transferred money abroad and accused the CA of abetting the offence under the Prevention of Money Laundering Act (PMLA).

The Madras High Court, while granting relief, observed that:

“A Chartered Accountant is not required to verify the genuineness of documents submitted by clients. His role is akin to that of a panel lawyer of a bank, who provides a legal opinion on title deeds without investigating their authenticity. Such professionals cannot be prosecuted along with the principal offender.”

The Supreme Court upheld this reasoning, affirming that the CA cannot be held criminally liable merely for performing his statutory duty under tax law.

[Murali Krishna Chakrala v. The Deputy Director, Directorate of Enforcement, Chennai – [2023] 457 ITR 579 (Madras HC)] [The Deputy Director v. Murali Krishna Chakrala — SLP (Criminal) Diary No. 8123/2024 (Supreme Court)]