Ref: DYP/MVK/51/Gen
Dt.01-02-2015
To
Hon’ble Shri Arun Jaitely,
Union Minister for Finance,
Ministry of Finance, North Block,
Government of India,
NEW DELHI.
Honoured Sir,
Sub:- Tax Practitioners in our country –necessity for a separate code for all Tax Practitioners –preparation and introduction of Tax Practitioners law –requested Reg.
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Apropos the captioned subject, we respectfully submit that AIFTP is a premier apex body of professionals with head quarters at Mumbai in the State of Maharashtra comprising of senior advocates, chartered accountants, company secretaries, cost and management accountants and tax practitioners and it functions through 5 zones in the country. It has always been pioneer in securing, promoting, updating and upgradation of knowledge of law and standards amongst the professionals for which purpose since 4 decades it has been organizing various National Tax Conferences at different places in the country and in a year 4 – 5 such tax conferences would take place and the deliberations will be summed up and suggestions would be made to the respective governments for suitable amendments to the existing laws for the improvement of the economy of the country. Many of our suggestions and proposals submitted every year before annual budget were being accepted by the Government and thus we have been objectively serving the society as well as the revenue, apart from educating the professionals with updated knowledge leading to improvement in the standards.
We submit that on account of certain judicial decisions, some kind of uncertainty coupled with unrest has cropped up amongst a particular class of professionals practising in tax laws by virtue of the licenses / registrations granted in favour of the practitioners by the central / State governments in exercise of the powers under the respective enactments to say Income Tax Act 1961 authorized issuance of license in favaour of Income Tax Practitioners and State Sales Tax law or VAT Acts have provided suitable provision for licensing the Practitioners. It is no doubt true that taxation is one of the most efficacious, complexioned and complicated branch of law which requires not only particular special and skilled craft, legal knowledge but also requires lot of practical knowledge and common sense and the true spirit behind this statement is well known to the Hon’ble Minster who has been a senior counsel in the Supreme Court. As submitted earlier, the apprehension and unrest on account of certain judicial decisions has created a situation amongst the licensed Tax Practitioners that they would be soon out of employment and they will not be allowed to practice any longer. Of course such an impression or apprehension is unfounded.
In this connection, it is respectfully submitted that it is very well known established and repeatedly proven that the very Tax Practitioners either under section 288(2) of Income Tax Act, 1961 or for that matter under various provisions of the Sales Tax law / VAT law have been very honest and sincere in providing themselves as instrumental in protecting as also augmenting the revenue of the State by virtue of educating the tax payers for payment of the legitimate taxes due to the State and the treatment and facility conferred upon them by the statute has been all along very appreciative.
It is therefore submitted that the Income Tax Act identified for authorization of diversified professionals namely Advocates, Chartered Accountants, Cost and Management Accountants, Company Secretaries and Registered Income Tax Practitioners. The role normally assigned to the Tax Practitioners by the respective assessees would be to prepare the returns, draw the financial statements required to be annexed to the return, estimate the advance tax payable every quarter and also assist the assessing authorities in the process of completing assessment proceedings and also to represent the assessees before any adjudicatory authorities namely Commissioner of Income Tax (Appeals) or the Income Tax Appellate Tribunal and the registered Tax Practitioners as such not being advocates were never allowed to appear before the courts and their appearance is, on the converse, restricted to the authorities other than the courts.
It is respectfully submitted that taxation law is also a very essential branch of law and as such one cannot deny that tax practice by a practitioner licensed under the statute, is not a law practice , nevertheless such tax law practice cannot be put on par with other civil law or criminal law or other traditional laws and the Tax Practitioners licensed by the statute do possesses altogether different special and technical qualifications touching upon administration of commercial laws such as Income Tax, Sales Tax, VAT, Central Excise etc., However in a given case if the area of litigation crosses the barriers of tax law involving applicability of other branches of law, certainly such diversified legal complications would always be handled and dealt with by the legal counsel alone. So long as the registered Tax Practitioners as rightly held by the Hon’ble Supreme Court do not qualify to appear before the courts, their appearance before the tribunals created under the statute will not do any kind of prejudice or loss to the revenue of the State or would not damage any other category of professionals. On the other hand, their practical experience and practical knowledge coupled with knowledge about accounting procedures would definitely assist the authorities under the statute objectively to reach and arrive at proper, correct and calculated decisions in the interest of revenue and as the revenue either from 1922 or thereafter from 1961 had never suffered any adversaries on account of the appearance of the licensed Tax Practitioners.
While the above one is the practical position, the apprehension lingering in the minds of the Practitioners requreis to be dispelled and removed by brining a separate code namely tax law practice and accordingly we All India Federation of Tax Practitioners in the interest of the lives of lakhs of registered Tax Practitioners and also in the interest of Government and State revenue humbly pray the Hon’ble Finance Minister to consider the factual matrix and our representation / suggestion to bring out a unique / unified Tax Practitioners law bill in India in consultation with the Ministry of Law and justice, Government of India so that the interest of the revenue of the Government would be protected as well as to give a quietus to the fears of the tax professionals of India. It may kindly be appreciated that such unified tax practitioners law is prevailing and existing elsewhere in the universe and the proposed legislation will not eliminate any kind of other professionals and as such it is harmless one and on the other hand it would give a kind of lease of life to the practitioners in the country under you regime to make the hands of the Hon’ble Prime Minister very strong to achieve the goals set before the present government. We also support the representation of likeminded professional brothers and associations who have been advocating in this regard.
We sincerely hope that this unique bill would set a trust to all the misgivings, apprehension and fears amongst fellow tax professionals and provide a secured and safe professional life to them and as such there is every necessity to introduce the same at earliest point of time in the present parliament session. We accordingly urge your goodselves for the bill at the earliest possible.
With Respects.
Yours faithfully,
(Dr. M.V.K. MOORTHY)
National Dy President –AIFTP
(1) Even ignoring latest SC verdict on practice of law by only enrolled Advocates, only Legal Practitioners and Reg. Income-Tax Practitioners are accountable to Income-Tax Deptt. on date for professional negligence. As Legal Practitioners are licensed to practice all Indian laws under Advocates Act and Reg. Income-Tax Practitioners are specially licensed to practice Income-Tax Act, only these two class should be treated as Tax Professionals and allowed to appear before Income-Tax Authorities on preparation and filing of Income-Tax return on behalf of assesses with special login in e-filing portal of Income-Tax Deptt.
(2) Accountant neither licensed to practice law to enable his/her professional body to take action for professional misconduct on the directions of Income-Tax Deptt. U/s 288(5)(a) nor the Income-Tax Deptt. could disqualify him/her for professional negligence. This incurable virus in the statute book of Income-Tax Act, require deletion of appearance clause for Accountant in Section 288(2)(iv) of Income-Tax Act
AT PRESENT ON HAND PLENTY AND TRICKY TAX COMPLIANCE WORK IS THERE. TO COMPLY IT NEEDS ABUNDANT ACCURATE KNOWLEDGE AS AND WHEN THE NEW ENACTMENTS OR AMENDMENTS TAKE PLACE. TO COMPLY WITH LITTLE KNOWLEDGE IS MORE DANGEROUS. NOW A DAYS COMPLIANCE HAS BECOME MORE COMPLICATED SINCE NUMBER OF CASES GROWN WITH INTERPRETATION WHICH HAS MADE THE COMPLIANCE MORE VULNERABLE. SINCE THE GOVERNMENT DEPARTMENTS HAVE BECOME ONLY REGULATORS AND NO MORE THEY FACILITATE THE ASSESSES NOR THE PROFESSIONALS SINCE THEY GOT MUCH TIME TO VERIFY THE CORRECTNESS TILL ITS TIME BARRING ASPECT. SO THERE MUST BE A INSTITUTE TO EDUCATE AND TO CONTROL RELATED TAX PROFESSIONALS WHICH WILL DEFINITELY HELP THE ASSESSES WHICH IS THE NEED OF THE HOUR. OTHER WISE THE LIVING OF THE TAXPAYER WILL BECOME HAZARDOUS.
On date, abundant tax compliance work at hand.
But there is NO REQUIRED tax professionals to support voluntary compliance in India.
About 2,500 Cost & Management Accountants, 5,200 Company Secretaries & 66,000 Chartered Accountants are in practice and unevenly spread throughout India.
India is highly populated country, existing number of practicing CMA, CS & CA does not meet the requirement of our economy under Income Tax Act.
“More number of professionals in the line of tax practice, will escort to progress in quantum of compliance & augment revenue to Government.
On Careful study of the situation. On date, appearance clause in all Indian taxation laws has been subject to review of Supreme court`s judgment & the order of revenue authority passed against the representation of Non-Advocates (Especially by Chartered Accountants) become in-fructuous, bad in law, null & void. Further, such orders cannot be enforced/appealed. Since Registered Tax Practitioners of India are totally deprived from both the powers of Certification & Representation, which is causing strict hurdle for voluntary compliance. In the result only CA`s will conduct Tax Audit & only Advocates will plead & act before tax authorities. Therefore, our Government should examine the ill effect of this situation to revenue, keeping in mind the trouble faced by assesses assisted by Reg. Tax Practitioners to approach only Chartered Accountants & Advocates for tax compliance, which leads the registered tax practitioners become un-employed.
Professional misconduct in the course of appearance for Pleading & Acting (Practice of Law) before the Revenue Authorities purely covered under Advocates Act read with Bar Council of India Rules in India. I.e, only Bar Council in India issued license to enrolled Advocates (Legal Practitioners) to practice law in India U/s 29 of Advocates Act & take action for professional negligence in the course of Pleading & Acting. As CA, CMA & CS are not issued license to practice law, these professional bodies can not take action on their members against the directions issued by Revenue Authorities for professional misconduct. Ultimately, it is clear that Revenue Deptt. can not catch hold Chartered Accountants (CA), Cost & Management Accountants (CMA) & Company Secretaries (CS) for professional negligence in the course of “Practice of Tax Law”. If other professional bodies allow its members to Practice law in India, there is no meaning in existence of Bar Council in India to regulate Practice of Law in India.
Respected Sir,
Its very important in this professionalism phase for the diversification to come out with Tax practicer low in india and all the professional should be included as DTC states-
1-CMA,
2-CA,
3-CS,
4-ADVOCATES,
5-OTHER REGISTEDRED PRACTICER WITH STATE GOVT.
Thanks & Regards,
R.R.Ahirwar & Associates,
A firm of Cost Accountants,
CMA Ramlakhan ahirwar,
ahirwar.ramlakhan@gmail.com,
Mob.no-91+9987184558,
Central Tax Practitioners Act should be introduced to cover all the class of professionals including tax practitioners both enrolled under State government and the central government. Wherein the appearance clauses under all laws should be deleted and only those who (Tax Advocates, Tax Practitioners, CA`s, CMA`s & CS`s should be) seek registration under this act shall only be eligible to practice exclusively in all indian tax laws.
IN THE PRESENT SCENARIO THERE IS NO OTHER GO OTHER THAN A UNIQUE TAX PRACTITIONERS LAW IN INDIA SINCE REPRESENTATION IS THE PREROGATIVE POWER OF ADVOCATES. THE ASSESSEE HAS TO APPROACH MULTIPLE PROFESSIONALS FOR A SINGLE TAX COMPLIANCE.
Dear friend,
It is not possible as the Hon’ble Apex Court held the appearance by any other class of professional is unconstitutional. Therefore, before bringing any new system/law, it should be amend the constitution. Is it possible?
It is timely urge to introduce Tax Practitioners Law in India.
Respected Sir,
It is excellent, you have explained in detailed the need of tax practitioners bill in India in the growing economy under the dynamic leadership of our Hon/ble Prime Minister and Finance Minister
You have also explained in detailed the roll of tax practitioners and advocates as Indian Constitution clearly bifurcated the roll of executive and judicial.
i.e. where ever a question of law is involved only advocates will represent and where there is question of fact tax practitioners will represent this our professional colleagues to keep in mind and no one can take away the power of tax practitioner.
The only need of the hour is to legalize the tax practitioners profession and to give them proper training by means of examination and training in the interest of the Dealer and Department by enacting a separate tax practitioners bill and we hope the present Govt will definitely listen the voice of lacs of tax practitioners
thank you sir
regards
GURU SWAMY
AIFTP -GOVERNING COUNCIL MEMBER SOUTH ZONE
(01) As per Section 288(2) of Income-Tax Act, 1961 eight class of persons are authorized to represent the assesses. Among them only following five class well diversified group of Tax Law Professionals of India are authorized to prepare return on behalf of assesses under Rule 12A of Income-Tax Rules, 1962:-
(1) Legal Practitioners
(2) Chartered Accountants
(3) Cost & Management Accountants
(4) Company Secretaries
(5) Reg. Income-Tax Practitioners
(02) Practice of Income-Tax law involves preparation of return on behalf of assesses and also plead & act before revenue authorities. In view of latest verdict in the case of Bar Council of India Vs A.K.Balaji [SLP(Civil)No(s)17150-17154/2012] Dt.4.7.2012 (SC) & A.K.Balaji Vs Govt. of India (2012) 35 KLR 290 21.02.2012 (Madras HC) it was clearly held by Hon’ble Supreme Court & Madras High Court that Advocates alone are entitled to practice the Profession of Law both in litigious & non-litigious matters, nullifying the effect of Section 33 of Advocates Act. This also confirms to Section 29 of Advocates Act. The verdict of Supreme Court is the declared law of land, binding on all throughout the territory of India under Article 141 of Indian Constitution & contravention liable for action under Article 129 read with Article 142(2) of Indian Constitution. Hence, Advocates alone are entitled to Practice, Plead and Act before the revenue authorities. On date, authorized representative clause in Income-Tax Act has been subject to review of apex court and hence require deletion. Other than Advocates should appear before tax authorities under CPC/Evidence Act, against summons issued U/s 131 of Income-Tax Act. If such appearance clause still retained in Income-Tax Act, situation may arise that order of assessing authority passed against the representation of other than Advocates become in-fructuous, bad in law, null & void. Further, such orders cannot be enforced/appealed and the Department is restrained to invoke action U/s 288(5) of Income-Tax Act on such persons for Professionals Negligence. Power of attorney (Vakalatnama) to practice law can only be given to Advocates. Practice of law is the “Prerogative Power” of Advocates. As appearance clause Section 288(2) of Income-Tax Act, induces Non-Advocates to commit offence punishable U/s 45 of Advocates Act, such clause no longer required in statute book of Income-Tax Act.
(03) Latest policy decision of learned officials in Finance Ministry, Govt. of India to expand the definition of “Accountant” to include related professionals in DTC-2013 read with delegated legislation Section 320(2)(iii) is highly appreciated. But, in order to give full effect for the same, it is necessary to involve all knowledgeable persons in the field to improve/enhance compliance & revenue. Therefore, Tax Practitioners Law required for India to enable well diversified group of tax professionals to practice tax law in India. Our Central Govt. should come out with substantial legislation; introduce Tax Practitioners Bill covering all five class of tax law professionals of India. Such Tax Practitioners Bill should be introduced with “Preamble” stating that “Other than Advocates are also practicing tax law in India, in order to protect them & also in the interest of Govt. revenue, this Tax Practitioners Bill has been introduced”. Then such Tax Practitioners Law can not be struck down in view above court verdicts. US Treasury Circular No.230 for regulations governing practice before the Internal Revenue Service of Income-Tax Deptt. in USA & Tax Agent Service Act of Australia are very good examples for consideration of Ministry of Finance, Government of India to have similar Tax Practitioners Law in India also, to generate tax professionals for widening genuine tax base & number of assesses.
(04) Opinion No.50 Dt.12.03.2013 issued by Committee on the Unauthorized Practice of Law appointed by Supreme Court of New Jersey USA states that “A non-lawyer who holds a power of attorney may not engage in the practice of law”. US Treasury Circular No.230 is the Tax Practitioners Law, regulating all Tax Law Professionals in United States of America. Limited appearance of persons other than Attorney’s/Advocates before Internal Revenue Service of Income-Tax Authorities in USA provided in Clause No.10.3 read with exception Clause No.10.32 of US Treasury Circular No.230. Exception Clause No.10.32 reads as under:-
“Nothing in the regulations in this part may be construed as authorizing persons not members of the bar to practice law”
(05) In view of the above facts & court verdicts, it is right time to have unified control & regulation of all players practicing taxation laws in India, Tax Practitioners Law is the need of the hour. In India there are professional bodies passed by the Acts of Parliament, to protect the interest of their members only, but there is no professional body to generate tax professionals to protect the interest of govt. revenue. Among Legal Practitioners, Cost & Management Accountants, Company Secretaries, Chartered Accountants and Income-Tax Practitioners, who wants to practice tax law in India, should mandatorily seek registration under Tax Practitioners Law, whatever their parent body says is immaterial & Tax Practitioners Law should mention the qualifications & experience required to be possessed by all the five class of tax professionals. On date ample tax compliance work is there, but there is no required Tax Professionals to support voluntary compliance in Indian taxation laws. Further, “More persons in the line of tax practice leads to improvement in quantum of compliance & more revenue to the Government”. Tax Practitioners Law in the lines of US Treasury Circular No.230 is well suited to India, required for India to widen genuine tax base of assesses.
I STRONGLY SUPPORT THE VIEW OF OUR FAVOURITE NATIONAL DEPUTY PRESIDENT AIFTP & SUPREME COURT ADV.DR.M.V.K.MOORTHY SIR. HATS OFF SIR. TAX PRACTITIONERS BILL REQUIRED FOR INDIA & NEED OF THE HOUR TO WIDEN GENUINE TAX BASE IN ALL INDIAN TAXATION LAWS.