CAN A CHARTERED ACCOUNTANT BE HELD FOR ABETMENT OF MONEY LAUNDERING MERELY ISSUING FORM 15CB UNDER THE INCOME-TAX ACT ?

 CAN A CHARTERED ACCOUNTANT BE HELD FOR ABETMENT OF MONEY LAUNDERING MERELY ISSUING FORM 15CB UNDER THE INCOME-TAX ACT ?

[THE DEPUTY DIRECTOR V. MURALI KRISHNA CHAKRALA — SLP (CRIMINAL) DIARY NO. 8123/2024 (SUPREME COURT)]

FACTS OF THE CASE

The petitioner K. Murali Krishna Chakrala (a Chartered Accountant) had issued five certificates in Form 15CB under Rule 37BB of the Income‑tax Rules, 1962 in favour of M/s B.K. Electro Tool Products (a Chennai-based entity) for foreign outward remittances.

The remittances were alleged by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) to be part of bogus import transactions/fictitious bank accounts and hence involving the proceeds of crime.

 

The prosecution sought to implicate the CA under Section 3 of PMLA — for “knowingly assisting” in money-laundering by issuing Form 15CB without validating the genuineness of the underlying transactions.

DECISION OF THE MADRAS HIGH COURT

The High Court held that issuing Form 15CB by a CA in the ordinary course of professional duty does not automatically amount to an offence under Section 3 of PMLA unless there is knowledge or intent (mens rea) of assisting laundering.

SUPREME COURT PROTECTS PRACTICING CHARTERED ACCOUNTANT :

SC Held that merely issuing Form 15CB under the Income-Tax Act does not amount to abetment of money laundering.

The Supreme Court upheld this reasoning by Chennai High Court, affirming that the CA cannot be held criminally liable merely for performing his statutory duty under tax law.

KEY TAKE-AWAY POINTS

Issuing Form 15CB by a CA in good faith, based on client-submitted documents, is not by itself offence under PMLA.

To incur liability under Section 3 PMLA, there must be knowledge or conscious assistance in process connected with proceeds of crime.

R V SECKAR , FCS ,LLB 79047 19295