Summary: CA certificates are governed by the relevant statutory provisions. CAs must issue them in accordance with the professionalism outlined in the ICAI’s code of conduct. Across tax frameworks, such certificates substantiate positions and claims. However, a certificate cannot, on its own, discharge the burden of proof, where the underlying records are not produced. Strict evidentiary rules do not govern tax proceedings, foundational principles do. In this environment, a certificate that is adequately documented, and issued in strict conformity with ICAI standards shall withstand scrutiny from the revenue and will be preferred compared to one that is devoid of such safeguards.
Introduction
A certificate issued by a practicing Chartered Accountant (“CA”) is a formal document affirming truth, accuracy or authenticity of a fact, condition, or status based on verification of appropriate evidence. The Institute of Chartered Accountants of India (“ICAI”), the accounting body regulating this profession, lays down professional and ethical standards that CAs must always observe, including independence, objectivity and professional competence.
The CA certificate was earlier considered as a “paper shield” available to litigants to support their arguments, but this blog examines its impact from a tax perspective.
The framework of CA certificate
CAs are recommended to follow ICAI-issued guidance notes, i.e., the ‘Handbook on Certificates by CAs’[1], which provides a three-part checklist[2], to (a) determine the applicable engagement standard, (b) procedural checkpoints as per the applicable engagement standards, including confirmation of compliance, and (c) self-verification to ensure that all prescribed elements of a certificate are included, such as responsibility paragraphs, opinion in the correct form, disclaimers, etc. It is mandatory for all CA certificates to bear a Unique Documentation Identification Number (“UDIN”), to enable traceability of certificates and to ensure accountability of concerned CAs.[3]
A CA who departs from these methods may be found guilty of professional misconduct under the Second Schedule to the CA Act, 1949[4]. Such misconduct includes issuing certificates without proper examination of related records[5], gross negligence in the conduct of professional duties[6], failure to obtain sufficient information necessary for expression of an opinion[7], or contravention of any guidelines issued by the Council[8]. The consequences may include reprimand, and/ or fine of up to INR 5 (five) lakh and temporary or permanent removal from the Register of Members[9].
The Income-tax Act, 2025[10] (“IT Act”), mandates CA certificates across various compliance and assessment processes. Examples include certificates for computing profits eligible for specified deductions[11], certificates establishing net worth of transferred undertakings for capital gains purposes[12], for claiming foreign tax credit[13] and pre-remittance certificates for cross-border payments[14].
Under the GST provisions, a CA certificate is mandatory for refund claims by persons other than exporters to certify that the incidence of tax has not been passed on to any other person[15], in case of transfer of unutilised ITC on change in business constitution, for confirming transfer of corresponding provisions for liabilities[16], credit notes issued by supplier for post-supply discounts, CA certificates confirming proportionate reversal of ITC[17], etc.
Even if it is not specifically provided in the IT Act or GST Act, in case taxpayers wish to prove something to tax authorities, they tend to support their contentions with a CA certificate.
The Evidence Question
The Supreme Court in Chuharmal[18], stated that while the strict rules of the Indian Evidence Act do not bind income‑tax authorities, the underlying principles still apply. For instance, conclusions must be basis relevant and reliable material and not mere suspicion, and that the burden of proof lies on the party asserting a fact.
Two recent decisions illustrate how these principles operate in tax practice. In Nokia India Sales Pvt. Ltd[19], the Delhi High Court held that a CA certificate, supported by ledger accounts and relevant documents, were sufficient to discharge the initial burden of proving that the incidence of customs duty had not been passed on to the consumers and that once such material was placed on record, the authority was obliged to produce contrary evidence before rejecting the claim. In Kataria Snack Pellets Pvt. Ltd[20], ITAT Rajkot took the opposite view, rejecting a CA valuation certificate for share premium, stating that the CA had relied solely on management-supplied projections without independent verification, and had not followed the relevant ICAI guidelines in arriving at the terminal value. ITAT held that a defective certificate cannot support the arguments built upon it. Therefore, a CA certificate carries real evidentiary weight if it is grounded in independently verified evidence and a transparent methodology.
Implications and Safeguards
Adherence to procedures provided in the ICAI guidance note is the first and most durable line of defence. A tax officer may examine the appropriateness of a CA certificate to determine whether the CA certificate is backed by appropriate evidence.
The scope of examination must be precisely stated in the body of the certificate. If the methodology involves professional judgement rather than any specific document to rely on, it must be truthfully disclosed.
Conclusion
The evolving judicial and regulatory treatment of CA certificates reflect a broader shift in the standards of evidentiary accountability expected of professionals in tax proceedings. What was once accepted as reliable evidence is now being subject to a rigorous scrutiny. The statutory framework of the IT Act and GST law, underscore that a certificate unaccompanied by adequate documentation carries diminishing legal weight. Professional diligence, transparency, and strict adherence to ICAI standards are no longer optional but indispensable.
For further information, please contact:
S.R. Patnaik,Partner, Cyril Amarchand Mangaldas
sr.patnaik@cyrilshroff.com
[1] ICAI Handbook on Certificates by Chartered Accountants Comprehensive Checklist & Formats available at 88798caq-aps2762.pdf.
[2] Checklist of Certificates, Annexure I of the ICAI Handbook on certificates by CAs, available at 88798caq-aps2762.pdf., pg 21.
[3] As per ICAI council decision at its 379th meeting held on December 17, 2018, UDIN has been made mandatory in phased manner and applicable to all certification issued by a CA from February 01, 2019.
[4] Code on Ethics, Volume I (Revised 2026) available at ICAI
[5] Clause 2, Part I, Second Schedule, Code on Ethics.
[6] Clause 7, Part I, Second Schedule, Code on Ethics.
[7] Clause 8, Part I, Second Schedule, Code on Ethics.
[8] Clause 1, Part II, Second Schedule, Code on Ethics.
[9] Section 21B(5) of the CA Act, 1949.
[10] And the erstwhile Income-tax Act, 1961
[11] Section 140(8) of the IT Act, 2025
[12] Section 77(4) of the IT Act, 2025
[13] Rule 76(16) & (17) of the Income-tax Rules, 2026 read with Form 44 and Form 45
[14] Form 146 under Rule 220(1) of the Income Tax Rules, 2026
[15] Rule 89(2)(m) of the Central Goods and Service Tax Rules, 2017
[16]Rule 41(2) of the CGST Rules, 2017.
[17] Section 15(3)(b)(ii) of the CGST Act, 2017 read with Clause 2.5 of Circular No.-212/6/2024-GST dated June 26, 2024.
[18] Chuharmal v. CIT, (1988) 172 ITR 250
[19] Principal Commissioner of Customs Vs. Nokia India Sales Private Limited, CUSAA 66/2025 (Delhi High Court).
[20] Kataria Snack Pellets Private Limited vs. ACIT, ITA No. 468/RJT/2024 (Rajkot ITAT)
