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The Central Government, through a recent Gazette notification has notified that the financial transactions carried out Chartered Accountants, Company Secretaries and Cost and Works Accountants and on behalf of his/her client, in the course of his or her profession, in relation to certain activities will be covered under Prevention of Money Laundering Act, 2002.
The notification listed the following activities to be kept under close watch: –
(i) buying and selling of any immovable property;
(ii) managing of client money, securities or other assets;
(iii) management of bank, savings or securities accounts;
(iv) organisation of contributions for the creation, operation or management of companies;
(v) creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities.
Earlier, the ‘relevant person’ in the act did not include any of the professionals.
However, with the latest amendment, the Government has brought the following persons under the radar of the Prevention of Money Laundering Act or PMLA Act.
(i) an individual who obtained a certificate of practice under section 6 of the Chartered Accountants Act, 1949 (38 of 1949) and practising individually or through a firm, in whatever manner it has been constituted;
(ii) an individual who obtained a certificate of practice under section 6 of the Company Secretaries Act, 1980 (56 of 1980) and practising individually or through a firm, in whatever manner it has been constituted;
(iii) an individual who has obtained a certificate of practice under section 6 of the Cost and Works Accountants Act, 1959 (23 of 1959) and practising individually or through a firm, in whatever manner it has been constituted.
As per the notification, practising professionals in the field of Chartered Accountancy, Company Secretaryship and Cost and Works Accountancy are now under the ambit of the Prevention of Money Laundering Act (PMLA) if any of the listed financial transactions are executed on behalf of clients.
Thus, any professional, under the instruction of clients, undertaking the aforesaid transactions are liable to scrutiny under the Prevention of Money Laundering Act.
However, advocates are not yet included under the purview of the act for transactions carried out on behalf of their clients.To Read the full text of the Notification CLICK HERE
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Notification No: F. No. P-12011/12/2022
Date of Judgement: 3rd May, 2023
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