The judgement significantly clarifies that professional actions carried out by CAs in compliance with statutory obligations do not automatically render them vulnerable to prosecution under PMLA, provided there is no evidence of active abetment or direct involvement in money laundering activities.
| Photo Credit:
SUSHIL KUMAR VERMA
In a big relief to Chartered Accountants (CA), the Supreme Court has upheld a ruling by the Madras High Court stating that CAs can’t be prosecuted under the Prevention of Money Laundering Act (PMLA) for non-compliance by a client.
“There is no valid ground to interfere with the impugned order passed by the Madras High Court,” a division bench of Justices Surya Kant and Joymalya Bagchi said while disposing a miscellaneous application. The matter was related with the certification of Form 15CB by CA. The CA is required to certify nature of foreign remittance for TDS (Tax Deducted at Sources) deductibility purpose based on documents submitted by client without requiring him to go into the genuineness of documents submitted by client
In its ruling, Madras High Court had said: ”Even on a demurrer, on a perusal of Form 15CB, we find that a Chartered Accountant is required to only examine the nature of the remittance and nothing more. The Chartered Accountant is not required to go into the genuineness or otherwise of the documents submitted by his clients. Further this could be compared with the legal opinion that are normally given by panel lawyers of banks, after scrutinising title documents without going into their genuinity.”
A Panel Advocate, who has no means to go into the genuinity of title deeds and who gives an opinion based on such title deeds, cannot be prosecuted along with the principal offender. “Applying the same anomaly, we find that the prosecution of Murali Krishna Chakrala, in the facts and circumstances of the case at hand, cannot be sustained,” a bench of justices P N Prakash and G Chandrasekharan said in its order dated November 22, 2024.
According to Sandeep Sehgal, Partner-Tax at AKM Global, the Court had delivered a significant judgment in 2022 on the professional liability of Chartered CAs in cross-border transactions, clarifying that issuing Form 15CB under the Income-tax Act, 1961, does not by itself constitute abetment of money laundering under the Prevention of Money Laundering Act (PMLA).
Accordingly, the bench set aside an order by the Special Court for CBI cases at Chennai and discharged the petitioner CA from the prosecution. However, “we make it clear that, it is open to the prosecution to enlist Murali Krishna Chakrala as a prosecution witness, if they so desire,” it said.
The judgement significantly clarifies that professional actions carried out by CAs in compliance with statutory obligations do not automatically render them vulnerable to prosecution under PMLA, provided there is no evidence of active abetment or direct involvement in money laundering activities. Furthermore, the Hon’ble Supreme Court, upon hearing the Special Leave Petition (SLP) dated 10 November 2025, mentioned that there is no valid ground to interfere with said ruling.
“It offers CAs confidence to perform their certification duties without undue apprehension about judicial overreach or prosecution risk from investigative agencies. Importantly, it strikes a balance between enforcing anti-money-laundering regulations and protecting the professional independence and integrity of those performing statutory certifications,” he said.
Published on November 14, 2025
