- (1.) Present is a reference under Section 21(5) of the Chartered Accountants Act, 1949 (for short the Act ) calling upon this Court to pass an order in terms of the Section 21(6) of the Act. The disciplinary proceedings against the respondent-Rajesh Chadda, Chartered Accountant was initiated on the basis of a Complaint under Section 21 of the Act, received from Commissioner, Central Excise Chandigarh-II Chandigarh against the respondent herein. Considering the aforesaid complaint, the Council of Chartered Accountants of India (for short the 'Council') under the Act referred the case to the Disciplinary Committee for inquiry in its meeting held from 19 th to 22nd April 2005.
(2.) The complaint was that during audit of M/s Ashwin Fabrics (P) Ltd., Amritsar by Central Excise Commissionerate from 14.6.1999 to 16.6.1999, the Central Excise Officers came across two sets of balance sheets prepared and signed by the same Chartered Accountant i.e. the respondent herein. One set of balance sheet was prepared for Income Tax Department and another for Central Bank of India. In the two such balance sheets there is a difference of three crores in the entry pertaining to sale of stocks. It was mentioned in the complaint that the respondent was summoned under Section 14 of the Central Excise Act, 1944. He accepted that both these balance sheets were prepared and signed by him. One set shows sale of Rs. 53731031.35 (Page 146 of the present paper book) and second set shows the sale of Rs. 84676031.35 (Page 164 of the present paper book ). The respondent was asked to explain such balance sheets. He stated that the balance sheets reflecting the sale figure of Rs. 84676031.35 has been prepared, on the request of management of the company on the basis of Monthly Operating Statement submitted to the Bank. In these circumstances, the action against the Chartered Accountant was sought in the complaint dated 29.10.2002, wherein it was claimed as under:- 6. It is therefore, requested that appropriate action may be initiated against Shri Rajesh Chadha, C.A.M No. 92937 of M/s Rajesh Chadha & Associated Chartered Accountant, 979-A, Gali Gujrain, Katra Bhai Sant Singh, Amritsar for professional mis-conduct act, for preparing & signing two sets of Balance Sheets showing different sale and purchase figures of the same company of M/s Ashwin Fabrics (P) Ltd., Amritsar for the period ended as on 31.3.1998, one of which is apparently false.
(3.) In the reply filed to the complaint before the Council, the respondent admitted having made statement before the Central Excise Authorities but asserted that he ought to have taken due caution while tendering statement before the Central Excise Department. It was stated to the following effect: - 2. .... The respondent truthfully accepts that he ought to have taken due caution while tendering his statement before the Central Excise Authorities but the respondent was under tremendous pressure so much so that seeking the adjournment only for one time resulted a letter informing that the matter of his non-appearance would be taken up with the Institute of Chartered Accountants and on the another side the involvement of his two senior professional brethren as the director of the said party as well as a handsome shareholding of both of them and their respective families, namely Shri Kapil Aggarwal, chartered Accountant and Shri Vijay Umat, Chartered Accountant. The mental state of affairs at such times cannot be explained in words and being so much under pressure the respondent was made to give tailor-made answers to the pre-decided questions.;