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BOD 684/2023Removal

A newly enrolled member's photograph surfaced on fraudulent refund accounts. A signature report proved inconclusive.

10 min readJainam Shah

A tax officer accused a newly enrolled chartered accountant of a large tax-refund fraud that predated his membership. The Board found the evidence strong enough, and removed his name for three months.

Held
RemovalGuilty of professional misconduct
Forum
Board of Discipline (First Schedule)
Clauses
Item (2) of Part IV of the First Schedule
Decided
punished
File no.
PR/G/289/2017/DD/293/2017/BOD/684/2023
Source
Original order (PDF)

A tax officer accused a newly enrolled chartered accountant of running a large income-tax refund fraud that had unfolded before he ever joined the Institute.1 The accountant said that timing should end the matter; the Board disagreed.

What happened#

The Income Tax Department uncovers a large refund fraud after one taxpayer fails to answer notices over an unpaid demand. The address on his PAN and TAN turns out to be fictitious, and the trail leads to a wider scheme: bogus PANs and TANs, opened on falsified documents, feeding bank accounts used to collect fraudulent refunds.
Handwriting on the account-opening forms, photographs on the KYC documents, and the digital trail behind the online filings all point back to one man, a chartered accountant. An introducer named on one of the accounts tells the police that he was the real operator behind it, and the refunded money is traced onward to accounts in his own name, his firm's, and his family's.
He becomes a member of the Institute. Within days an FIR names him directly, and shortly after that he is arrested. Before a magistrate, he agrees to repay a large sum to the tax department in instalments and makes a part-payment toward it.
The Income Tax Department takes the matter to the Institute. Before the Board, he argues that the fraud, whatever it was, occurred before he ever became a member, that the criminal cases against him remain unproven, and that a forensic report shows the disputed signatures are not his own.
The Board examines the forensic report and finds it inconclusive rather than exonerating. Weighing his own admissions, the documents linking him to the fraudulent accounts, and the timing of his enrolment against his arrest, it finds him guilty and, months later, removes his name from the Register for three months.

Two FIRs run through this case, and the gap between them mattered to the defence. FIR No. 514/2015 was registered in November 2015, before the respondent's enrolment, over the underlying tax default. FIR No. 05/2016 was registered on 23rd January 2016 — five days after he became a member of the Institute — and it was this one that named him and led to his arrest a fortnight later.2

The order also carries several different figures for the scale of the fraud without settling on one: roughly ₹4.83 crore in its opening background, ₹1.33 crore and ₹36.65 lakh in the Board's own summary of the complaint, and ₹2.67-2.68 crore, traced to a reported 64 to 180 fake PANs, in the Department's later submissions.3 Nothing in the finding turns on reconciling them, and this page does not attempt to either.

The charge#

A single clause, First Schedule, which is why the Board of Discipline heard the case rather than the Disciplinary Committee.4

Part IV of the First Schedule is the Schedule's catch-all: "other misconduct" that does not fit the specific numbered items elsewhere in it, but that the Council still considers serious enough to punish. It is cited together with Section 22 of the Act, the section that gives "professional or other misconduct" its meaning under the Schedules in the first place.5

  • Item (2) of Part IV, read with Section 22 — conduct that, in the opinion of the Council or its Boards, brings disrepute to the profession.6

This order used that catch-all for conduct never argued to be professional work at all: bank accounts, forged identities and diverted refunds, tied to the respondent by documents rather than by anything done for a client. The Board found the respondent guilty and later removed his name from the Register for three months.

What the respondent said#

He argued first that the proceedings themselves were premature: an arrest is not a finding, and both FIRs against him — 514/2015 and 05/2016 — were false and baseless, with a petition to quash the earlier one still pending before the Rajasthan High Court.

He said the money he had agreed to repay to the tax department was arranged by his wife while he was in custody, made under coercion rather than as any admission of guilt. On timing, his central argument was that the conduct alleged against him ran from June 2013 to June 2015, before his enrolment as a member on 18th January 2016, so the Institute's own procedure rules did not reach it. He also pointed out that the investigation behind FIR No. 05/2016 had gone on for more than seven years without a chargesheet, calling that delay itself a form of harassment, and asked that the disciplinary proceedings be kept in abeyance until the criminal cases were decided.

On the documents, he denied that the signatures on the disputed account-opening forms were his, relying on a Forensic Science Laboratory report obtained in separate proceedings before the Tees Hazari Court.

What the Board held#

The Board read the forensic report itself rather than take his account of it. It found that the report's conclusions "did not affirmatively state that the disputed signatures were not of the Respondent." Instead, it "merely recorded that 'it has not been possible to express any definite opinion' regarding the questioned signatures due to the absence of adequate comparable admitted writings of the relevant period" (para 13). On that basis, "an inconclusive forensic opinion cannot be equated with a finding that the signatures do not belong to the Respondent," and it did not outweigh the documentary material the Department had produced, including his photograph on more than one bank's account-opening forms (para 13).

The timing defence fared no better. The Board held:

the Respondent's contention that alleged transactions took place prior to his enrolment as a Chartered Accountant cannot absolve him from the implications of his conduct as the Respondent was enrolled as a member on 18th January 2016 and was subsequently arrested on 9th February 2016 (para 15)

and added that "a Chartered Accountant is required to maintain the highest standards of ethical conduct and any involvement in, admission to, or association with financial irregularities is incompatible with the dignity and reputation of the profession" (para 15).

With the criminal cases against him still pending and undecided, the Board held that "the material available on record" — his own statement before the criminal court agreeing to repay ₹1.30 crore, his photograph on the fraudulent accounts' KYC documents, and the absence of any forensic opinion actually clearing him — "raises serious concerns" that "directly affect the integrity and probity expected of a member of the profession" (para 14).

The order#

At the punishment hearing the respondent appeared by video conference, confirmed receipt of the Board's findings and said he had nothing further to submit. The Board then ordered:

the Board hereby resolves to remove the name of [the Respondent] from the Register of Members for a period of three (3) months.7

Three months' removal sits above a reprimand on the Board's scale of punishment, and below the longer removals and fines it can also impose.8 The same three-member Board passed both the findings and the punishment, the first in person and the second by video conference.9

Why it matters#

This section is ours, not the Board's.

Enrolment does not draw a line under what came before it. The Board held that conduct predating membership does not put it beyond the Institute's reach once the member is enrolled and the consequences of that conduct continue to unfold. Resolve, don't merely disclose, any open legal exposure before you apply for membership.

An inconclusive forensic report does not clear you. "Not possible to express a definite opinion" is not the same as "not his signature," and the Board read it exactly that narrowly. If you commission a forensic opinion for your defence, make sure it actually says what you need it to say.

Photographs and KYC trails outlast denials. What tied the respondent to the fraud was documentary — his photograph, his handwriting, the money's destination — not anyone's account of events. Assume that any document carrying your image or signature will still be read years later.

A pending criminal case does not pause a disciplinary one. The Board proceeded and found him guilty while the criminal proceedings against him remained undecided. Treat the two as separate tracks running on separate clocks.

This summarises a public order and links the primary source. It is general information, not legal or professional advice.

Footnotes#

  1. The complainant was an Additional Commissioner of Income Tax in Jodhpur, acting on the Income Tax Department's behalf rather than as a private complainant, and is not named on this page. The respondent was CA. Kapil Kansal (M. No. 540411), of New Delhi. ↩

  2. FIR No. 514/2015 (PS Kotwali, Sri Ganganagar) was registered on 18 November 2015, over the non-deposit of tax deducted at source in the name of the taxpayer whose fictitious identity anchored the wider scheme. FIR No. 05/2016 (PS EOW, Delhi) was registered on 23 January 2016 — five days after the respondent's enrolment as a member on 18 January 2016 — and named him directly, leading to his arrest on 9 February 2016 and bail on 6 July 2016. The investigation under FIR No. 514/2015 was later transferred from the CBI, Jodhpur to the Economic Offences Wing, Delhi. ↩

  3. The order's opening background paragraph puts the loss to the exchequer at approximately ₹4.83 crore. The Board's own summary of the complaint (para 12) instead cites fraudulent transactions of ₹1.33 crore and non-deposit of TDS of ₹36.65 lakh. The complainant Department's later submissions cite fraudulent refunds of ₹2.67-2.68 crore, traced at different points to 64 and to 180 fake PANs. None of these figures is reconciled with the others in the order itself. ↩

  4. First Schedule matters go to the Board of Discipline; Second Schedule matters, and matters falling under both, go to the Disciplinary Committee. The two carry very different punishment ceilings. ↩

  5. Section 22 of the Chartered Accountants Act, 1949 defines "professional or other misconduct" as including any act or omission specified in the First or Second Schedule to the Act. It is cited together with Item (2) of Part IV because that item is the general clause the definition brings into play, rather than one of the specific numbered misconducts found elsewhere in the Schedules. ↩

  6. Part IV of the First Schedule is headed "Other Misconduct." Item (2) covers conduct which, in the opinion of the Council or its Boards, brings disrepute to the profession — a catch-all that reaches conduct outside professional work altogether. ↩

  7. The order names the respondent in this sentence; the original reads "the Board hereby resolves to remove the name of CA. Kapil Kansal (M.No.540411) from the Register of Members for a period of three (3) months." Nothing else on this page alters the source text. ↩

  8. Section 21A(3) gives the Board a graduated set of punishments: reprimand, removal of the name from the Register for a period, and a fine. Removal sits above a reprimand. Check the current sub-section before relying on any figure or ceiling — these have been amended over time. ↩

  9. CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty (Government Nominee) and CA. Priti Savla (Member) sat on both the findings and the punishment order. The final hearing was held 28 October 2025 at ICAI Bhawan, New Delhi, with the respondent present in person; findings were signed 8 December 2025 and punishment passed, by video conference, 30 December 2025. ↩

Written by Jainam Shah. Found guilty under Item (2) of Part IV of the First Schedule; the Board ordered a removal. General information, not legal or professional advice — read the order itself before relying on it.

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