Supreme Court Gives Relief to Chartered Accountants

The Supreme Court of India has given big relief to Chartered Accountants (CAs). It ruled that just doing their legal duty under the Income Tax Act like issuing Form 15CB does not make them guilty of money laundering under the Prevention of Money Laundering Act (PMLA).

This judgment is important because it makes clear that professionals cannot be treated as criminals simply for signing off on certificates required by law.

What Was the Case About?

A CA issued Form 15CB for a company’s foreign remittance.

Form 15CB is a certificate banks need before sending money abroad. It confirms that the payment follows income tax rules.

Later, the Enforcement Directorate (ED) claimed the company had illegally transferred money and accused the CA of helping in money laundering.

Madras High Court’s View

The case first went to the Madras High Court. The court said:

• A CA’s job is not to check if every document given by the client is genuine.
• His role is similar to a bank’s panel lawyer, who gives a legal opinion but doesn’t investigate the authenticity of property papers.
• So, a CA cannot be punished along with the main offender just for issuing Form 15CB.

Supreme Court’s Decision

The ED appealed, but the Supreme Court agreed with the High Court. It said:

• Statutory duty ≠ criminal intent: Doing a compliance task like issuing Form 15CB does not mean the CA had criminal intent.
• Limited role of CAs: A CA is not expected to act like an investigator. His certificate only confirms tax compliance, not whether the entire transaction is legitimate under money laundering laws.

Why This Matters for CAs

This ruling The Deputy Director v. Murali Krishna Chakrala (SLP Criminal Diary No. 8123/2024)  is a huge relief for the CA community.

• It protects professionals from being dragged into criminal cases just for performing their legal duties.
• It draws a clear line between doing your job and abetting a crime.
• While CAs must still be careful and apply professional judgment, they are not automatically responsible if a client misuses funds later.

Key Takeaway

Chartered Accountants can breathe easier. Issuing Form 15CB is part of their statutory duty, not an act of money laundering. This judgment ensures that professionals are not unfairly targeted when they are simply following the law.

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