Case Note & Summary
The Institute of Chartered Accountants of India (ICAI) filed transfer petitions under Article 139-A(1) of the Constitution read with Order XL Rule 1 of the Supreme Court Rules, 2013, seeking to transfer several writ petitions pending in the Kerala High Court, Madras High Court, and Calcutta High Court to the Supreme Court. The writ petitions challenged the validity of Chapter VI of Guidelines No.1-CA(7)/02/2008 dated 08.08.2008 issued by the Council of ICAI, which caps the number of tax audit assignments a member in practice can accept in a financial year at 60 under Section 44AB of the Income-tax Act, 1961. The guidelines also provide that contravention thereof constitutes professional misconduct under Section 22 read with the Second Schedule of the Chartered Accountants Act, 1949. The ICAI argued that transfer was necessary to avoid multiplicity of proceedings, conflict of decisions, and to settle a question of law of general public importance. The respondents opposed the transfer, contending that it would deprive them of their right under Article 226 of the Constitution and that the matter should be left to the High Courts. The Supreme Court, after hearing arguments, allowed the transfer petitions, noting that the issue involves a substantial question of law of general public importance and that transfer would avoid conflicting decisions. The Court directed that all the writ petitions be transferred to the Supreme Court for final determination, and that interim orders passed by the High Courts shall continue until further orders.
Headnote
A) Constitutional Law - Transfer of Petitions - Article 139-A(1) of the Constitution of India - Supreme Court Rules, 2013 Order XL Rule 1 - The Institute of Chartered Accountants of India sought transfer of writ petitions pending in Kerala, Madras, and Calcutta High Courts challenging Chapter VI of Guidelines dated 08.08.2008 which caps tax audit assignments at 60 under Section 44AB of the Income-tax Act, 1961. The Court allowed the transfer to avoid multiplicity of proceedings and conflict of decisions, holding that the issue involves a question of law of general public importance. (Paras 1-16)
B) Professional Misconduct - Chartered Accountants Act, 1949 - Section 22, Second Schedule Part II Clause (1) - Guidelines dated 08.08.2008 Chapter VI - The Court noted that contravention of the guidelines constitutes professional misconduct under the Act. The transfer was allowed to settle the law comprehensively. (Paras 4-5)
C) Income-tax Act, 1961 - Section 44AB - Compulsory Tax Audit - The Court observed that Section 44AB was enacted to prevent tax evasion and facilitate tax administration, fulfilling directive principles under Article 39(c) of the Constitution. (Para 8)
Issue of Consideration
Whether the transfer petitions filed by the Institute of Chartered Accountants of India under Article 139-A(1) of the Constitution for transferring writ petitions pending in different High Courts challenging Chapter VI of Guidelines dated 08.08.2008 should be allowed.
Final Decision
The Supreme Court allowed the transfer petitions and directed that all the writ petitions pending in the Kerala High Court, Madras High Court, and Calcutta High Court be transferred to this Court for final and conclusive determination. The interim orders passed by the High Courts shall continue until further orders.
Law Points
- Transfer of petitions under Article 139-A(1) of the Constitution
- Multiplicity of proceedings
- Conflict of decisions
- Question of law of general public importance
Case Details
2020 LawText (SC) (12) 42
Transfer Petition (Civil) No(s). 2849-2859/2019 with Transfer Petition (Civil) No(s). 727-728/2020
Shri Arvind Datar, Shri R. Basant
The Institute of Chartered Accountants of India & Ors.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Transfer petitions under Article 139-A(1) of the Constitution for transferring writ petitions pending in different High Courts challenging the validity of Chapter VI of Guidelines dated 08.08.2008 issued by the Institute of Chartered Accountants of India.
Remedy Sought
The Institute of Chartered Accountants of India sought transfer of all writ petitions pending in Kerala, Madras, and Calcutta High Courts to the Supreme Court for final determination.
Filing Reason
To avoid multiplicity of proceedings, conflict of decisions, and to settle a question of law of general public importance regarding the validity of the cap on tax audit assignments.
Previous Decisions
Earlier transfer petitions (TP Nos. 614-615 of 1990) were rejected on 03.04.1991. Writ Petition No.2085 of 1993 was dismissed on 16.05.2005. Madhya Pradesh High Court upheld the notification on 18.04.1995, but SLP was withdrawn. Madras High Court allowed the writ petition on 13.07.1998, confirmed in appeal. Civil Appeal Nos.7208-7209 of 2005 were dismissed as infructuous on 01.04.2013.
Issues
Whether the transfer petitions under Article 139-A(1) should be allowed to transfer writ petitions challenging Chapter VI of Guidelines dated 08.08.2008 from various High Courts to the Supreme Court.
Submissions/Arguments
Petitioners (ICAI): Transfer is necessary to avoid multiplicity of proceedings, conflict of decisions, and to settle the law comprehensively as the issue is of general public importance.
Respondents: No good reason for transfer; it would deprive writ petitioners of their right under Article 226; transfer should be to one High Court instead of the Supreme Court; interim orders should continue.
Ratio Decidendi
The transfer of writ petitions under Article 139-A(1) is justified when the issue involves a question of law of general public importance and to avoid multiplicity of proceedings and conflict of decisions. The Court has the power to transfer cases to itself for final determination.
Judgment Excerpts
These transfer petitions have been filed by the Institute of Chartered Accountants of India under Article 139-A(1) of the Constitution of India read with Order XL Rule 1 of the Supreme Court Rules, 2013 for transfer of several writ petitions pending in the Kerala High Court, Madras High Court and Calcutta High Court.
Learned senior counsel submits that in order to avoid multiplicity of proceedings, conflict of decisions and also settle the law comprehensively, which is a question of law of general public importance, the Institute of Chartered Accountants of India being the regulatory body for the profession of Chartered Accountants has filed the present transfer petitions for transfer of all the aforesaid writ petitions to this Court for final and conclusive determination of the issues involved.
Procedural History
The Institute of Chartered Accountants of India filed Transfer Petition (Civil) No(s). 2849-2859/2019 and Transfer Petition (Civil) No(s). 727-728/2020 under Article 139-A(1) of the Constitution read with Order XL Rule 1 of the Supreme Court Rules, 2013, seeking transfer of writ petitions pending in Kerala High Court (W.P.(C) No.25662/2016, W.P.(C) No.12963/2017, W.P.(C) No.19026/2017, W.P.(C) No.12273/2019), Madras High Court (W.P. Nos.17956-17958/2017, W.P. No.19162/2019), and Calcutta High Court (W.P. No.22771/2017, W.P. No.18124/2019, W.P. No.18590/2019). Notices were issued, and a counter affidavit was filed by respondent No.1. The Court heard arguments and allowed the transfer petitions.
Acts & Sections
- Constitution of India: Article 139-A(1), Article 19(1)(g), Article 14, Article 39(c), Article 226
- Supreme Court Rules, 2013: Order XL Rule 1
- Chartered Accountants Act, 1949: Section 22, Second Schedule Part II Clause (1)
- Income-tax Act, 1961: Section 44AB
