Facts of the Case

Disciplinary proceedings were initiated In Re: CA Adesh Kumar Jain on the basis of information received from the Informant Department relating to a CBI case RC2172012A0005, registered in connection with alleged income tax evasion and bribery involving officers of the Income Tax Department and officials of M/s Eldeco Group of Companies.

The investigation stemmed from a search and survey conducted by the Income Tax Department in March 2012 against Eldeco Group. During subsequent CBI investigation, statements were recorded alleging that the Respondent had been projected as a “specialist” who could assist in settling income tax matters. It was alleged that the Respondent demanded illegal gratification to influence Income Tax officials.

However, the Respondent was not named as an accused or witness in the CBI charge sheet dated 29 December 2012, and criminal proceedings were pending against other accused persons, with trial stayed by orders of the Hon’ble Supreme Court.

Issues Involved

Whether the Respondent acted in collusion with Income Tax officials or intermediaries to facilitate bribery or illegal settlement of income tax matters, and whether such alleged conduct constituted “Other Misconduct” under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.

Informant Department’s Case

The Informant Department relied upon the CBI charge sheet and statements recorded during investigation to suggest that the Respondent acted as a consultant who allegedly offered to settle income tax matters through illegal means. It was alleged that the Respondent acted in collusion with accused public servants to receive bribes on their behalf.

Respondent’s Arguments

The Respondent denied all allegations and submitted that he never offered to settle income tax matters through bribery and never met the concerned company officials except on a single professional interaction arranged by a colleague. He categorically stated that he had no professional or personal relationship with Eldeco Group or its directors.

The Respondent filed a notarised affidavit stating that he was not involved in any illegal activity, had not offered any “deal”, and had not received or demanded any illegal gratification. He further submitted that he was neither arrayed as an accused nor cited as a witness in the CBI charge sheet and had never received any notice, summons or communication from any court or investigative authority.

Court Order / Findings

The ICAI Board of Discipline examined the CBI charge sheet, correspondence from the Informant Department, affidavits filed by the Respondent, and the procedural history of the criminal case.

The Board observed that the sole evidence relied upon by the Informant Department was the charge sheet, in which the Respondent was neither named as an accused nor as a witness. The Board further noted that no independent documentary or oral evidence was produced to substantiate the allegation that the Respondent acted as an intermediary or demanded bribes.

The Board also took note that criminal proceedings were still pending against other accused persons and that no finding of guilt had been recorded against the Respondent by any court of law. In the absence of cogent, conclusive evidence linking the Respondent to the alleged misconduct, the Board held that the charge could not be sustained.

Important Clarification

The Board clarified that disciplinary liability cannot be fastened merely on the basis of allegations or third-party statements, particularly when the member is not named in criminal proceedings and no independent evidence establishes involvement. The burden of proof lies on the Informant Department to substantiate allegations of “Other Misconduct”.

Final Outcome

The ICAI Board of Discipline held CA Adesh Kumar Jain (M. No. 089016) Not Guilty of “Other Misconduct” under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 read with Section 22.

By order dated 21 November 2023, the Board directed closure of the case under Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.

Source Link- https://www.mytaxexpert.co.in/uploads/1768899049_CA.AdeshKumarJainM.No.089016inRe.pdf

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