Court Rejects Anticipatory Bail of CA in Rs 200 Cr Foreign Remittance Case

A Mumbai special court has rejected the anticipatory bail plea of 81-year-old Bengaluru-based CA Seetaram Bhat, who allegedly issued 163 Form 15CB certificates linked to foreign remittances worth Rs 200.58 crore for eight companies. The CA claimed that his office staff misused his digital signature, but the court questioned the timing of his complaint and observed that custodial interrogation was necessary in the ongoing investigation.

A special court in Mumbai has rejected the anticipatory bail application of 81-year-old Bengaluru-based Chartered Accountant Seetaram Bhat in connection with an alleged foreign remittance fraud involving Form 15CB certificates.

The case concerns 163 Form 15CB certificates allegedly issued in connection with overseas remittances amounting to Rs 200.58 crore by eight companies.

Investigation Into Rs 2,575 Crore Foreign Remittance Transactions

The Economic Offences Wing (EOW) is investigating a wider alleged financial fraud involving overseas remittances of approximately Rs 2,575.83 crore.

According to the prosecution, several Chartered Accountants and company directors allegedly facilitated foreign remittances through shell companies established between FY 2021-22 and FY 2024-25.

Investigators suspect that fraudulent or improperly issued Form 15CB certificates were used to facilitate overseas transactions and evade applicable taxes.

Bhat's alleged involvement relates specifically to 163 certificates connected with eight companies and foreign remittances worth Rs 200.58 crore.

CA Claims Staff Misused His Digital Signature

During the anticipatory bail proceedings, Bhat's lawyers argued that he had been practising as a Chartered Accountant for approximately five decades and was primarily based in Bengaluru.

They submitted that employees managing his Mumbai office had allegedly misused his Digital Signature Certificate (DSC) to issue Form 15CB certificates without his authorisation.

The defence also stated that Bhat had lodged a complaint with Andheri police regarding the alleged misuse and had cooperated with investigators by providing relevant documents.

Court Questions Verification of Documents

Special Judge Vikram R. Jagdale raised concerns regarding the verification procedures followed before the certificates were issued.

According to published reports of the proceedings, the court observed that relevant books of account, agreements and supporting documents of the companies had not been adequately examined before certification.

The court also referred to applicable requirements under the Income Tax Rules and RBI guidelines.

Regarding the alleged misuse of the digital signature, the court questioned why the police complaint had been filed only after the criminal case was registered.

The court considered the subsequent complaint an afterthought and expressed concern that granting anticipatory bail could hamper the ongoing investigation.

It concluded that custodial interrogation was necessary to examine the alleged transactions and determine the roles of those involved.

Consequently, the anticipatory bail application was rejected.

Importance of Form 15CB Verification for Chartered Accountants

The case highlights the importance of professional due diligence and safeguarding Digital Signature Certificates used for statutory certifications.

Under the provisions applicable to the transactions under investigation, Form 15CB was used to certify the tax implications of specified foreign remittances, including the nature of payment, applicable tax rates and TDS obligations.

Chartered Accountants are expected to undertake appropriate verification of supporting documents before issuing such certificates.

The case also highlights the risks associated with permitting employees or third parties to access professional digital signing credentials without adequate controls.

The rejection of anticipatory bail is not a finding of criminal guilt. The allegations remain subject to investigation and the applicable judicial process.

Source: CA Sansaar