COMMISSIONER OF INCOME TAX Vs. G M DANDEKAR

JUDGEMENT

(1.) THIS is a reference under Section 21 of the Chartered Accountants Act (Act XXXVIII of 1949). The respondent is a partner in a firm of chartered accountants. Messrs. A. Mohamed and Co., are a firm of merchants carrying on business in hardware in the city of Madras and they entrusted the work of auditing their accounts and preparing income-tax returns to the respondent's firm. The complaint against the respondent is that he performed this work negligently It appears from the assessment order dated 31st October, 1944, that Messrs.

(2.) A. Mohamed & Company had considerable business in black market and maintained two sets of accounts-regular day books and ledgers for the pen market transactions and a separate book for the black market transactions. While the former accounts contained entries, showing daily transactions the latter contained only consolidated entries made at the end of each week, of all the transactions of that week. At the end of the financial year all the weekly entries in the separate accountant were totalled up and these totals were entered in the regular accounts. For the year in question, 1943-44, the entries thus carried into regular accounts books show purchases of the value of Rs. 97, 403-7-6 and sales of the value of Rs. 1, 69, 766-7-6.

(3.) THERE is no charge against the respondent that he connived at the assessee's putting forward a false statement or that he had in any manner associated himself with the attempt of the assessees to mislead the department. The charge is that he owed a duty to the department to himself investigation the truth and correctness of the accounts of the assessees and not merely to act as their post office in transmitting them. We do not agree that the respondent is under any such duty to the department and, therefore, no question of negligence arises. We think it is necessary to comment on the inordinate delay, before concluding, in the institution of these proceedings. The statements complained of were made on 11th July, 1944, and 2nd October, 1944 they were found to be unacceptable by the department were themselves finally closed on 30th July, 1947, and this complaint is filed on 6th January, 1951.It is essential that charges of this king should be made with promptitude In the result we hold that the respondent is not guilty of any conduct which renders him unfit to be a member of the Institute. THERE will be no order for costs in this referenceOrdered accordingly.