Big Relief for Chartered Accountants: SC Says Issuing Form 15CB Doesn’t Mean Abetting Money Laundering
In a significant judgement, the Supreme Court has held that the issuance of Form 15CB by a Chartered Accountant, in the normal course of professional duty, does not amount to participation or abetment in money laundering activities.
In this case, a Chartered Accountant (CA) had issued Form 15CB for some money transfers that a company made to pay for imported goods, something banks usually require before sending money abroad.
Later, the Enforcement Directorate (ED) claimed that the company had illegally sent money outside India, and they also accused the CA of helping in money laundering under the Prevention of Money Laundering Act (PMLA).
The Madras High Court, while giving relief to the Chartered Accountant, said, “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, declaring that a Chartered Accountant cannot be treated as a criminal just for doing his job and following the tax law, like issuing Form 15CB as required.
