CA cannot be Held for money laundering for merely issuing Income Tax Form 15CB: Supreme Court

CA cannot be Held for money laundering for merely issuing Income Tax Form 15CB: Supreme Court

Supreme Court in recent ruling has held that merely issuing Form 15CB under the Income-Tax Act does not amount to abetment of money laundering. The ruling offers significant relief to professionals performing statutory certification duties.

In this case, a Chartered Accountant (CA) issued Income Tax Form 15CB for remittances related to import of goods, as required by the bank.

Later, the Enforcement Directorate (ED) alleged that the company had illegally transferred money abroad and accused the CA of abetting the offence under the Prevention of Money Laundering Act (PMLA).

The Madras High Court, while granting relief, observed that:

“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 Order of Madras High Court is as given below:

Special Leave Petition was filed by Enforcement Directorate against the order of Madras high court, which was rejected by the Apex Court.

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