29-CA/Law/NDM-1134    Dated-27th November, 2015

To,

The Principal Chief Commissioner

Income Tax, Chandigarh

Sub: Only enrolled Advocates are licensed to practice Law in India- Not to allow Chartered Accountants/ Non- Advocates for practice of law in the course of proceedings before revenue authorities falling under the jurisdiction of Principal Commissioner of Income Tax and Commission of Income Tax, Amritsar, Jammu etc.

Dear Sir,

Recently, it has come to our knowledge that a proposal not allowing Chartered Accountants/ Non- Advocates for practice of law in the course of proceedings before revenue authorities falling in your jurisdiction is under consideration.

In this regard, although, comments have not been called for from the Institute of Chartered Accountants of India New Delhi, yet being the statutory body and regulator as well, we wish to bring the following facts for your consideration.

The Institute of Chartered Accountants of India, is a statutory body established by an Act of Parliament namely ‘The Chartered Accountants Act, 1949’ for regulating the profession of Chartered Accountants. We further, wish to inform you that a significant majority of our membership is in the practice with a good deal of specialisation in the traditional areas of direct/ indirect taxes and in emergent specialism inter alia, in financial services, information technology, insurance sector, joint ventures, mutual funds, exchange risk management, risk and assurance services, environment / energy/quality audits, investment counselling, corporate structuring and foreign collaborations etc.

The Institute of Chartered Accountants of India is also engaged in the Nation building by contributing to Central and various State Governments and other regulators viz, the Ministry of Corporate Affairs, Trade Policy division of the Ministry of Commerce and Industry, Central Board of Direct Taxes, Reserve Bank of India, Insurance Regulatory and Development Authority, Comptroller and Auditor General of India, Securities Exchange Board of India etc. to name a few, on the relevant matter of importance to the profession and having bearing to the public interest.

The education and training programme of the Institute to the qualification of Chartered Accountancy is adequately designed to ensure that our members have in depth knowledge/ experience of accounting, taxation, financing and audit etc. The Institute spares no efforts in keeping pace with the current accounting and auditing practices prevalent throughout the world. An individual who qualifies as a Chartered Accountant has to mandatorily undergo rigorous practical training and has to keep his knowledge updated in the matter relating to accountancy, audit, taxation and corporate laws etc. The area of training covers accountancy, auditing, taxation, company law and other laws. The level of knowledge prescribed in the various subjects covered by the syllabus of the Chartered Accountancy course is ‘expert knowledge’.

That Taxation including Indirect Taxes is one of the core-competence areas of Chartered Accountants. In India, Chartered Accountants have expertise in accounting, auditing and taxation, since these subjects are dealt with in great depth in the CA curriculum. Further, Taxation constitutes a significant area of practice of CAs. It is due to this reason the Institute has three separate dedicated committees on taxation, namely, Direct Taxes Committee, Indirect Taxes Committee and Committee on International Taxation. These committees are amongst the most important committees of the Institute and they act as a liaison between the Revenue and the tax payers. The Committees comprise of chartered accountant members of the Central Council, as well as other co-opted members, who are experts in the field of Taxation from across the country. Therefore, it is clear that a chartered accountant, on passing his final examination and completing his articled training, is an expert in taxation, accountancy, auditing, company law and other laws etc., and he is accordingly fully qualified to practice in these fields. Chartered Accountants are thus well trained in various laws which are applied while conducting cases before various tribunals and other similar authorities.

The provisions of Income tax Act involve computation and analysis of profit and loss account which directly relates to accounting procedure or the recording, presentation or certification of financial facts or data. Chartered Accountants being an expert in understanding and analyzing the financial statements are thus the right person for explaining the related facts in case of dispute.

For application of tax legislations, the prima facie documents are financial statements thus the government has given the task relating to financial statements appropriately to Chartered Accountants.

The matters before the Tax Authorities involve issues and questions mainly relating to accountancy and require knowledge and expertise in accounting matters. This is why many of the leading and most successful tax advocates are also qualified Chartered Accountants. The appearance of Chartered Accountants before tax authorities and tribunals has always been considered to be an integral part of the practice of a Chartered Accountancy ever since 1940s, when the Income Tax Appellate Tribunal was first set up and when Chartered Accountants began appearing before it.

It is necessary to note that the members of the Institute are thus well trained in the fields of various laws which are applied while conducting the cases before the various tax/revenue authorities. It is in recognition of that crucial fact the various applicable statutes specifically permit Chartered Accountants to appear before authorities and Tribunals constituted under those statutes. A few of such statutes are listed below:-

(a)         Section 288 of the Income Tax Act, 1961 read with Rule 50 of the Income Tax Rules, 1962

(b)         Section 35-Q of the Central Excise Act, 1944

(c)          Section 146-A of the Customs Act, 1962 read with Rule 9(a) of the Customs (Appeals) Rules, 1982

(d)         Section 15-V of the Securities and Exchange Board of India Act, 1992

(e)           Section 22(C) of the Securities Contracts (Regulation) Act, 1956

(f)            Section 17 of the Telecom Regulatory Authority of India Act, 1991

(g)          Section 432 of the Companies Act, 2013

(h)         Regulation 19 of the Company Law Board Regulations, 1991

(i)           Section 35 and Section 53 S of the Competition (Amendment) Act, 2007

(j)           Rule 61 of the Special Economic Zone Rules, 2006

(k)         Before the Central Electricity Regulatory Commission vide Notification No.8/(1)/99/CERC dated 27.8.1999

(l)            Airport Economic Regulatory Authority of India Act; in terms of section 30, CA can appear before Appelate Tribunal

(m)      The Foreign Exchange Management Act, 1999 — in terms of Sections 16 and 32

Needless to mention that the Institute, since its inception in the year of 1949, has always remained at the forefront in serving the nation by establishing sound financial prudence within the country.

Further, the Institute has a stringent code of conduct/Ethics which are required to be followed by its members. It is also pertinent to mention that the Chartered Accountants Act, 1949 provides the disciplinary mechanism for making investigation and taking disciplinary action in respect of any complaint/information of professional/other misconduct in respect of a member and/or levy of penalty of permanent removal of name from the register of members and/or levy of penalty up to Rupees Five Lakhs as well depending on the gravity of offence(s). Therefore, the Chartered Accountants are governed by the Chartered Accountants Act, 1949 and the Chartered Accountants Regulations 1988 framed there under and are subject to strict provisions of professional ethics and professional conduct and any deviation there from would make them liable for disciplinary action under the said Act. The ICAI has established a Peer Review Board to ensure compliance with technical standards, acceptance and adherence to quality control policies and procedures by Chartered Accountants firm in the services being rendered by them. Such reviews certainly boost the confidence of society at large in the quality of work of Chartered Accountants in India.

The term ‘practice of profession of law’ has not been defined under the Advocates Act, 1961. The appearance before the Authorities established under the Income-Tax Act does not amount to ‘practice of profession of law’. The Hon’ble Supreme Court in the case of C. Venkatachalam vs. Ajitkumar C. Shah & Ors. [6 (2011) 9 SCC 707], while considering the provisions of the Consumer Protection Act, 1986, upheld the judgment of the Division Bench of the Bombay High Court, whereby the Hon’ble High Court held that a party before the District Consumer Forum/State Commission cannot be compelled to engage the service of an advocate. The Hon’ble Supreme Court also observed that the High Court was fully justified in observing that the authorized agents do not practice law when they are permitted to appear before the District Forum and the State Commission. Further, the Hon’ble Supreme Court also approved the view taken by the High Court that many statutes, such as, Value Added Tax, Income Tax and Competition Act also permit non-advocates to represent the parties before the authorities and those non-advocates cannot be said to be practicing law.

A perusal of Section 33 of the Advocates Act, 1961 shows that it specifically contemplates and provides that the other statute in question may specifically permit persons other than Advocates to appear before Courts and Tribunals functioning under that statute. Such provisions are to be found in all Central as well as State Acts dealing with various direct and indirect taxes such as Income Tax, Excise Duty, Value Added tax, etc. The Hon’ble Supreme Court in R.D. Nagpal v. Vijay Dutt [(2011) 12 SCC 498] considered the provisions of the Consumer Protection Act, 1986. Rule 14(3) of the Consumer Protection Rules, 1987 allowed the parties or their agents to appear before the National Commission, and the expression ‘agent’ as defined in Section 2(b) of the said Act means a person duly authorised by a party to present any complaint, appeal or reply on its behalf before the National Commission. The Supreme Court held that given the wide definition of the expression ‘agent’, there was no reason, if the Commission were otherwise satisfied that a person was authorised on behalf of the appellant, to refuse to allow him to represent it and to cross examine the complainant. The provisions of Section 33 of the Advocates Act of 1961 came up for consideration and it was held as follows:-

  1. The learned counsel appearing on behalf of the respondents has relied upon Section 33 of the Advocates Act, 1961. Section 33 makes it clear that advocates alone will be entitled to practice before any court or before any authority, etc. “except as otherwise provided in this Act or in any other law for the time being in force”. The Consumer Protection Act read with the Rules would be “a law for the time being in force”.

Recently, the Lucknow Bench of the Hon’ble High Court of Judicature at Allahabad, in case No. 7116 of 2014, Tax Lawyers Association, Lucknow Throu General Secry. & Anr. vs. State of U.P. Thru Prin. Secy. Tax & Registration, has passed an Order dated 06.08.2014 directing, inter alia, that any person, who is not a registered Advocate, shall not be permitted to appear before the Authority under the U.P. VAT Act. Further, the Hon’ble Bench of the Chief Justice of Lucknow Bench of the Allahabad High Court, after hearing the arguments in detail on 20th August, 2014, modified the above Order dated 6th August, 2014 vacating the stay and consequently, Chartered Accountants continue to be permitted to appear before the authorities under the VAT Act in the State of U.P. The Division Bench of the Hon’ble Chief Justice’s Court, in its Order dated 20.08.2014, observed that Section 29 of the Advocates Act, 1961 speaks of there being only one class of persons entitled to practice the profession of law, namely, advocates. Section 33 of the said Act contemplates that only a person who is enrolled as an advocate under the Act will be entitled to practice in any court or before any authority or person. The entitlement to practice under Section 33 of the Advocates Act, 1961 is obviously an entitlement to practice the profession of law but what is more important is that Section 33 recognises that any other provision of law and for that matter, the Act itself may authorize a person who is not enrolled as an advocate under it to practice in any court or before any authority or person. Consequently, there is no question of the ultra vires doctrine being attracted for the simple reason that Section 33 of the Act of 1961 contemplates that any other law may authorize a person who is not enrolled as an advocate under the Act to practice before any court, authority or person.

It is stated that the above matter is pending before the Lucknow Bench of the Hon’ble High Court of Judicature at Allahabad for final hearing.

The Statute only confers on lawyers the exclusive right to practice law. With the passage of time there are a lot of functions which are overlapping with the practice of law and such overlapping functions cannot confer the right on lawyers under the Advocates Act. Any such interpretation will stultify the growth and evolution of society and the rules of effective and expeditious dispute resolution. It is, therefore, of vital importance to note that Section 33 of the Advocates Act, 1961 itself specifically contemplates and provides that the other statute in question may specifically permit persons other than Advocates to appear before Courts and Tribunals functioning under that statute. Such provisions are to be found in all Central as well as State Acts dealing with various direct and indirect taxes such as Income tax, Excise duty, value added tax etc. Thus, the Income Tax Appellate Tribunal is constituted under the provisions of The Income Tax Act, 1961. Section 288 of the Income Tax Act, 1961 provides for appearance by ‘authorised representatives’ before any Income-tax Authority or the Income-tax Appellate Tribunal.

Moreover, the matters before the various tax/revenue authorities involving mainly issues and questions relating to Accountancy and require knowledge and expertise in accounting matters. Indeed, even if an advocate appears in such matters, he cannot present his case in the most effective manner without a good knowledge of accountancy. This is why many of the leading and most successful tax advocates are also qualified Chartered Accountants. The appearance of Chartered Accountants before tax authorities and tribunals has always been considered to be an integral part of the practice of a Chartered Accountancy ever since 1940s. As stated above, the Institute spares no efforts in keeping pace with the accounting practices prevalent and those evolving throughout the World. A person who qualifies as a Chartered Accountant is to undergo rigorous practical training spanning three years and has to keep his knowledge updated in the matters relating to accountancy and the applicable laws. In any event, it is entirely for the framers of the various enactments viz. Income Tax Act, 1961, the Companies Act, 2013 etc. to lay down who should be eligible to appear before the Tribunals and authorities constituted under each of these respective enactments. The Income Tax Act and the provisions contained therein as to who can appear in proceedings under those enactments are special provisions of law which would necessarily prevail over the general provisions contained in the Advocates Act.

Each legislation enacted by Parliament or by a State Legislature is an independent code by itself. Parliament and the State Legislature duly take into consideration the various issues involved and incorporate the requirements into the respective legislations. Therefore, to re-write such provisions so as to provide that the appearance by other professionals is for a limited purpose only is totally unwarranted.

That law is a dynamic subject and the growth of trade and commerce and the requirements of revenues of Governments have resulted in the emergence of specialized legislations like the Income-tax Act, the Central Excise Act, 1944 and the Customs Act, 1956 and other various State-Level VAT Legislations. The Constitution of India itself has recognized the importance of the specialized fields of such legislations and has expressly provided for the creation of specialized tribunals which take care of such specialized fields of law. Parliament in its wisdom, while enacting aforesaid legislations have considered all the relevant issues before incorporating the provisions relating to authorized representatives These legislations specifically allowed professionals other than advocates to be authorized representatives. This clearly amplifies the point that the legislature is fully conscious of the requirements of the particular specialized legislation. The purpose of establishing various Tribunals is to decide issue on a particular subject by experts in that field and in that direction, specialized Tribunals have been created by the various statutes. If the Chartered Accountants, who for reasons of rigorous practical training and examinations, have acquired expertise in accounting and taxation laws, were not to be allowed to appear before such specialized authorities/Tribunals, the very purpose of establishment of such Tribunals would get defeated. Besides, such restrictions will limit the choice afforded to the affected persons by the statutes to choose their representative.

In the matter of Rajkot Engineering Association and Ors. And Tax Advocates Association and Ors. v. Union of India MANU/GJ/001 9/1986 the Gujarat High Court held as follows:

“There is no restriction on the right of the assessees to select as their own authorised representatives whomever they like whether the same chartered accountants who have carried out the tax audit or other chartered accountants or other Income Tax practitioners….

In the present state of Income Tax law, the interpretation and development of which has become very intricate and complex, it is not difficult to anticipate that a situation has arisen where more and more assessees would like to be assisted both by the chartered accountants as well Income Tax consultants and practitioners who may be non-chartered accountants in arranging their financial affairs and in the maintenance of their accounts, records and documents for preparation of the returns and in the course of assessment before tax authorities.”

In the above backdrop we are of the view that it would not be appropriate to consider any such proposal which restrains the Chartered Accountants from appearing before the revenue authorities in India particularly when various Central/State legislations including the Income Tax Act, 1961 expressly provide and authorise the Chartered Accountants to appear and represent the cases before the authorities under the Income Tax Act, 1961. Further, we may request you to consider our submissions as above and afford us an opportunity to present our case in person before taking any final decision in this regard. In case your good office needs any further clarifications, we may please be advised.

Thanking you,

Yours faithfully,

(V. Sagar)

Direct/Official Link of above-

http://resource.cdn.icai.org/40016legal281115pccrep.pdf

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46 responses to “ICAI Reply on not allowing CAs to practice Law in India”

  1. G.Giridhar says:

    The work relating to company formation and preparation of IT Returns is not new for advocates . Due to changing economic environment there emerged Institutes like ICSI ,ICAI, ICMA under the blessings of the Parliament if any institutes come up in the similar lines for CPC and Cr P C and allied laws then the three century old profession has to face stiff competition from other professionals and has to bid a addieu.

  2. G.Giridhar says:

    A lawyer with CA qualification is only advancement of Profession knowledge which is necessitated by changing economic environment . A Client approaching a Advocate regarding IT Work he can render only representative service whereas CA can render prepare and sign Tax Audit Report and render Representative Service . When ICAI permits its members to practice law why there is an embargo on the part of BCI to allow its members to practice as a CA if he /she possess requisite CA qualification.

  3. VEERAPPA S VANDAL ADVOCATE says:

    respect your profession,not entering to other profeession.CA IS AUDITING OF ACCOUNTS NOT TO PRACTICE OF LAWS.

  4. Kamalakanta Dash says:

    Hi Advocate friends,

    If CAs have jumped to your field of practices then you should do the vice versa. But in the fear of insecurity don’t cry. It reveals how much weak professionalism you people maintain.

    Bring your issues before the central bodies/ministries for empowering your purposes. Place the proper logic and win the case.

    Thank you.

  5. VINOD MITTAL says:

    MY REQUEST TO BSK RAO AND MANDEEP SINGH, PL BE COOL.

  6. bhupendra says:

    I fully agree with CA. Srinivasa sir… ICAI should give its representation before Finance Minister for allowing CAs to represent before DRTs as it can open a big oppourtunity for all CA Members …

    • MANDEEP SINGH says:

      Sir,
      I think one representation should be made to allow CA’s for human surgery instead of only surgeon. I think they will be more capable to do surgery because they are master to do Practice of other professions.

  7. BSKRAO says:

    To,

    Sri.Arun Jaitley,
    Hon’ble Finance Minister,
    Govt.of India, North Block,
    New Delhi – 110001.

    Hon’ble Sir,

    Sub:- Income-Tax Act & proposed GST taking away self employment opportunity of Legal Practitioners, Company Secretaries and Licensed Income-Tax & VAT Practitioners – Prayer for inclusion of Legal Practitioners, Company Secretaries & Licensed Income-Tax & VAT Practitioners for audit & certification under Income-Tax Act & proposed GST – Regarding
    -0-

    01. Following are the five class of persons who are authorized prepare returns on behalf of the assesses under Indian taxation statutes:-

    (1) Legal Practitioners
    (2) Chartered Accountants
    (3) Cost & Management Accountants
    (4) Company Secretaries
    (5) Licensed Income-Tax & VAT Practitioner

    02. In Section 32(4) of Model GST Law only Chartered Accountants & Cost Accountants are authorized to conduct audit & issue reconciliation statement under Section 43(2) of GST. Here, following points may be considered for granting such powers to other three class of Tax Professionals both under Income-Tax Act & proposed Goods & Services Act.

    (a) On date around 70,000 Chartered Accountants & 3000 Cost Accountants are practicing who are unevenly spread throughout India. India is highly populated country, existing number of CAs & CMAs does not meet the requirement of the economy. Due to ceiling on number of tax audit, other three class of Tax Professionals handling tax audit cases have to roam around in search of empty slots of CAs to give compliance in case of their clients during due dates. This has also resulted in high cost of compliance, due to high demand & extra payment made for reservation of empty slots of CAs. CA Certificates in Income-Tax Act are causing strict hurdle for voluntary compliance not only in Income-Tax Act, but also in other Central & State Govt. taxation laws.

    (b) In fact, other three class of Tax Professionals are playing major role in collection of taxes under VAT in almost all States. When once the returns are prepared & filed by these other three class of Tax Professionals in GST for all the 12 Months in the financial year, how CAs/CMAs will intervene for issue of reconciliation statement in respect of returns filed by these other three class of Tax Professionals. Once a particular class of professional is authorized to prepare return on behalf of assesses, there is no justification to prohibit him/her for issue of reconciliation statement/certificate in GST & it works contradictory to spirit & intention of law framers.

    03. I/We hope that our favourite Finance Minister will consider the above genuine request & include Legal Practitioners, Company Secretaries & Licensed Income-Tax & VAT Practitioners for the purpose of Audit & Certification U/s 32(4) of GST Act & Income-Tax Act for smooth collection of revenue.
    .

    With Respects,

    Yours faithfully,

    Copy With Respect to:-
    Commissioner of Commercial Taxes/State Taxation Commissioner

  8. BSKRAO says:

    ALTHOUGH CA CAN PRODUCE BOOKS BEFORE REVENUE AUTHORITY ON BEHALF OF THE ASSESSEE, NEITHER HE CAN ACT FOR ASSESSEE NOR ASSESSEE CAN RATIFY THE ACT OF CA IN THE OOURSE OF PROCEEDINGS BEFORE REVENUE AUTHORITY – HENCE DEMAND RAISED IN THE ORDER PASSED AGAINST THE RECORDED REPRESENTATION OF CA CAN NOT BE ENFORCED/RECOVERED. THEREFORE, PR.CCIT SHOULD LOOK AT THIS ASPECT BEFORE CONSIDERATION OF OBJECTION RAISED BY ICAI IN THE ABOVE LETTER. HOWEVER, IT IS SAFE ON THE PART OF REVENUE TO ALLOW ONLY ASSESSEE IN THE CASES HANDLED BY CAS.

  9. BSKRAO says:

    On date, appearance clause in all Indian taxation statute has been subject to review of apex court & require deletion. If such appearance clause still retained in taxation statute, 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. 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 induces Non-Advocates to commit offence punishable U/s 45 of Advocates Act, such clause no longer required in all Indian taxation statute

  10. MANDEEP SINGH says:

    Section 55 in THE ADVOCATES ACT, 1961
    55. Rights of certain existing legal practitioners not affected.—Notwithstanding anything contained in this Act,—
    (a) every pleader or vakil practising as such immediately before the date on which Chapter IV comes into force (hereinafter in this section referred to as the said date) by virtue of the provisions of the Legal Practitioners Act, 1879 (18 of 1879), the Bombay Pleaders Act, 1920 (17 of 1920), or any other law who does not elect to be, or is not qualified to be, enrolled as an advocate under this Act; 1[***] 2[(c) every mukhtar practising as such immediately before the said date by virtue of the provisions of the Legal Practitioners Act, 1879, or any other law, who does not elect to be, or is not qualified to be, enrolled as an advocate under this Act;
    (d) every revenue agent practising as such immediately before the said date by virtue of the provisions of the Legal Practitioners Act, 1879 (18 of 1879), or any other law,] shall, notwithstanding the repeal by this Act of the relevant provisions of the Legal Practitioners Act, 1879 (18 of 1879), the Bombay Pleaders Act, 1920 (Bombay Act 17 of 1920), or other law, continue to enjoy the same right as respects practice in any court or revenue office or before any authority or person and be subject to the disciplinary jurisdiction of the same authority which he enjoyed or, as the case may be, to which he was subject immediately before the said date and accordingly the relevant provisions of the Acts or law aforesaid shall have effect in relation to such persons as if they had not been repealed.

    Section 33 in THE ADVOCATES ACT, 1961
    33. Advocates alone entitled to practise.—Except as otherwise provided in this Act or in any other law for the time being in force, no person shall, on or after the appointed day, be entitled to practise in any court or before any authority or person unless he is enrolled as an advocate under this Act.

    Sir you are wrongly make interpretation of section 33 of Advocates. For correct interpretation of section 33 of Advocate act 1961. We need read section 33 simultaneously with section 55 of Advocates Act 1961. The word “Except as otherwise provided in this Act or in any other law for the time being in force” means that any other law in force at the time enactment of Advocate act 1961. For this purpose those persons who are practicing of law before courts or revenue authorizes. But they are not qualified or elect to enroll as an advocate on appointed day. ( Such exemptions was provided for those practitioners not for those who passed degrees after the enactment of Advocates act 1961)

  11. MANDEEP SINGH says:

    I don’t know why you CA’s are clapping on representation.
    (1) PRACTICE – means REPEATED WORK
    (2) LAW – means KANOON ( INCOME TAX and VAT are also Laws { not story books}

    “Practice of law” means representing legal issues of clients before authorities, tribunals and courts except this legal advice to clients in chamber is also a Practice of law u/s 29 of Advocate act 1961. ” Practice of law” has a broad meaning and it can comprise all legal as well as Non legal issues as per needs of the society. Hon’ble SC in A.K BALAJI 2012 CASE very well described that “Practice of law” includes litigation as well as Non litigation matters. It is also very well described in MADRAS BAR ASSOCIATION V/S UNION OF INDIA ( NTT) Hon’ble judges commented that we can’t say Advocate to an an “Accountant” . It was also said that clerks of Advocates have good knowledge of laws, can be say Advocates to the clerks ?

  12. sunil pasricha advocate says:

    Here ca getting dual benefits during practice viz. Exclusive Tax audit right and present before revenue authorities to plead etc. And an advocate only present before revenue authorities. If ca can both and why advocates shouldn’t allow to make tax audit. Advocates are also well versed knowledge of accounting and audit. If advocates are not allow for tax audit then ca must have not to present before revenue authorities.

    • BSKRAO says:

      CBDT has retained outdated mandatory tax audit clause U/s 44AB of Income-Tax Act for Non-Corporate assesses since almost three decades, that too in this computer era, without evaluating its utility & also not providing the ways or mechanism to search out empty slots of CA Signature to assesses/Non-CA Tax Professionals, which is causing strict hurdle for giving voluntary compliance, due to Tax Audit ceiling fixed for each Chartered Accountant by ICAI, without considering demographic spread of practicing Chartered Accountants. (In fact, there is no such type of certification clause in any country throughout the world in revenue side). Against RTI Application filed before DIT (Systems), it is evident that DIT(Systems) have not captured Section Wise Wrong Claims in Tax Audit Report issued by Chartered Accountants to enable the Income-Tax Deptt. to conclude Quality. In this practical situation, why can’t be Non-CA Tax Professional be allowed to conduct TAX LAW AUDIT. Further, why ICAI has influenced CBDT to upload such TAR with so much of complication in upload

  13. VIRENDRA KUMAR says:

    Sir, I am registered as ITP (Income Tax Practitioner) under Income Tax Act for the last more than 40 years. I have appeared in number of cases before Commissioner of Income Tax and Tribunal. Kindly advise whether I am barred for appearing before such authorities. Thanks

    • BSKRAO says:

      ITP’s are specially licensed to practice Income-Tax law in the statute book of Income-Tax Act. Chartered Accountants neither licensed to practice law to enable his/her professional body to take action for professional misconduct against 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 Section 288(2)(iv) of Income-Tax Act.

  14. BSKRAO says:

    The Statute only confers on lawyers the exclusive right to practice law. With the passage of time there are a lot of functions which are overlapping with the practice of law and such overlapping functions cannot confer the right on lawyers under the Advocates Act.

    Opinion of Supreme Court of New Jersey, USA
    (Advocates can practice both law & public accounts)

    HEAD NOTE:-

    The court must have had some kind of vision of the professional world converging in the future, for as early as 1964, it set rather interesting ground rules into place for the cross-employment restrictions of Legal and CPA professionals. In Opinion 23 (January 9, 1964), the court was asked: “May a member of the Bar of New Jersey engage in the practice of law in this State simultaneously with the practice of public accounting?” In response, the court’s opinion states:

    “… we find that the dual practices of law and accounting … by lawyers would not violate the Cannons of Professional Ethics. Nor does it appear to us that any other rules of our Supreme Court would be violated by such dual practices….”

  15. Umeshruparel says:

    I fully endorse the view of Bsk rao and bajaji
    The non advocates cant regularly practise and appear before statutory revenue authorities.
    Can they submit say chartered accoumtant that let advocates cost Accountants be allowed to make statutory financial audits?
    So in short everybody should be confined to practise in his or her field and remain happy

  16. Atul T Suraiya says:

    Excellent representation covering the various facets and rationally analysing all relevent facts and approaches. good job done for tbr CA fraternity, Thank You!

    • BSKRAO says:

      Kindly provide me clause or section of any Indian statute, CAs are licensed to practice law. In this situation no one can take action for professional negligence in the course of practice of law by CAs

  17. CA.V.Ravindran Salem says:

    ICIA has to directly take the matter to Finance Minister/Prime Minister and solve this issue… This circular is issued based on Court Order.. Though it is a detailed good representation by ICAI, this matter is going to burn soon and will spoil the entire practice of CAs.. War footing steps have to be taken by our Institute.. I expect the circulars will definitely be issued by CBDT soon… I want one clarification…Can a Commissioner of Income tax. restrict the Statute powers given to CAs?..

  18. CA. AKHILESH GARG says:

    Very good and effective representation . I feel first time ICAI has reacted well in advance . keep it up. Needs to high light the method of creation of a CA in the whole society /media. I am not able to understand why our advocate brothers feel insecure time and again. Both profession complement each other and should create a healthy competition. Thanks.

    • MANDEEP SINGH says:

      CA AKHILESH GARG JI,
      you are clapping on representation without understanding actual facts narrated in representation and without deeply study of judgments mentioned in representation. For create healthy competition Advocate should be permitted to issue certificates along with CA’s in income tax and other acts. when CA’s are representing assessees upto tribunals, which is a core practice area of Advocates. Why ICAI express it is deep concern on expand definition of ” Accountant” in DTC BILL 2013. Why you CA’s seek healthy competition in only ” Practice of law” instead of ” Practice of Accountancy”

  19. CA. J. KUMAR says:

    Very good and effective submission.

    • BSKRAO says:

      Other than Advocates can not appear before any authority for third party on own motion, but can appear against summons issued. This privilege of appearance vested only on enrolled Advocates. Hence, appearance clause cited by ICAI in the above reply require deletion from the statue books with immediate effect in view of A.K.Balaji case of Apex Court.

  20. Varun Mittal says:

    Excellent presentation.

  21. CA Amresh Vashisht says:

    On 7th May 2015 , I wrote to the President and my letter was also published by the TAXGURU on the same day. It reminded me the problems being faced by the members at largs. Thanks , ICAI has decided to take some stand over the issue. My letter can be seen here . https://taxguru.in/income-tax/doubts-appearance-chartered-accountants-income-tax-authorities.html

  22. ca jaikumar jain says:

    Excellent submission by ICAI and also need of the hour

    • BSKRAO says:

      Here the main issue in question are:-

      1. Whether CAs can practice law in India
      2. Whether CAs are licensed to practice law in India
      3. Whether CAs can be squarely covered under professional misconduct in the
      course of practice of law ? If so how ?
      4. Whether CAs can file tax law returns & sign in the course of proceedings
      before revenue authorities

  23. MANDEEP SINGH says:

    Sir,
    Appearance before consumer is different from appearance before Income tax act authorities and Case before consumer forum mostly related to the fact. In C. Venkatachalam vs. Ajitkumar C. Shah & Ors. [6 (2011) 9 SCC 707] – hon’ble court also warned that Non Advocate not use the appearance clause as “Practice” and not will charge fees for appearance. But representation before income tax authority is different and also required knowledge of other local acts as decided in NTT Case.

  24. CA AJAY KUMAR SINGH , JAMSHEDPUR says:

    WE HAVE SEEN SO MANY PERSONS ARE REPRESENTING THEIR ASSESSEE BEFORE THE TAX AUTHORITIES WHO ARE NEITHER ADVOCATES NOR CHARTERED ACCOUNTATS.THOSE PERSONS SHOULD STRICTLY BE RESTRICTED FOR APPEARING BEFORE THE TAX AUTHORITIES.

  25. CA Vinod Lakhera says:

    Excellent submission by our regulator

  26. CA Amit Shrivastava says:

    Very nice representation,,,,mention of all the relevant sections under different acts make it more effective.

    • BSKRAO says:

      How come it is nice ? ICAI has pleaded only about appearance, but not about practice of Income-Tax law. Suggest ICAI to apply its mind properly.

  27. CA Vinod Lakhera says:

    Excellent submission

  28. Mukesh Trivedi says:

    This is an excellent submission. Since it is too long I trust executive summary must have been made. Through CA MPs and senior counsels like Harish Salve it needs to be represented.

  29. BSKRAO says:

    Advocates governed by disciplinary rules, alone are entitled to Practice, Plead & Act before the Revenue Authorities

    (1)Indian legislature provided special class of persons called Advocates in Advocates Act, 1961 to practice all Indian laws. Section 29 of Advocates Act, specifies that Advocates alone are entitled to practice the profession of Law & Section 33 of Advocates Act specifies that Advocates alone entitled to practice the profession of law before any Court or before any authority or person. 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 (HC) it was clearly held by Apex Court & Madras HC that Advocates alone are entitled to practice the Profession of Law both in litigious and non-litigious matters. Therefore, appearance clause not required in statute books of any Indian laws. In the interim order of BCI Vs A.K.Balaji Dt.04.07.2012, Apex Court upheld the view of Madras HC that Indian Advocates alone entitled to practice law both in litigious & non-litigious matter and reserved the decision on the issue of foreign lawyers or law firms to visit India for temporary period on a “fly in and fly out” basis to advise their clients on the foreign law and diverse international legal issues. They are however not permitted to practice Indian Law, either in relation to litigation or advisory matters, unless they qualify and enroll as Advocates and fulfill the requirements of the Act & Rules. The verdict of Supreme Court is declared law of land, binding on all throughout the territory of India under Article 141 of Indian Constitution and contravention liable for action under Article 129 read with Article 142(2) of Indian Constitution.

    (2)The constitution bench of Supreme Court of India in National Tax Tribunal case of Madras Bar Association Vs Union of India bearing No.150 of 2006 Dt.25.09.2014, it was ultimately held that Chartered Accountants & Company Secretaries to represent a party to an appeal before NTT, unconstitutional and unsustainable in law. In the instant case of Apex Court, it was also held that “In our understanding, Chartered Accountants & Company Secretaries would at the best be specialists in understanding & explaining issues pertaining to accounts & it fall purely within the realm of facts”. Chartered Accountants conducting Tax Audit for Revenue can not appear & act again for the same interested assesse in proceedings before Revenue Authorities (Due to Conflict of Interest). If explanations from Tax Auditor required, they may be called upon by issuing summons under CPC/Evidence Act only. Because, all the procedures laid down in Civil Procedure Code followed in the course of proceedings before revenue authorities requiring only Advocates to appear on behalf of assesses.

    (3)Legal profession in India governed by Advocates Act and the disciplinary rules and regulations, code of conduct and professional ethics framed & practiced from time to time. There is also a hierarchy of disciplinary authorities such as the State Bar Council, Bar Council of India, Supreme Court, etc. These authorities can exercise their disciplinary authority/control only over the Advocates who are on the Rolls maintained under the Advocates Act. Any person who is not subject to disciplinary control of the above said authorities if allowed to practice the profession of law, he/she would go scot-free and would not be subject to the supervision and the disciplinary jurisdiction of the above said authorities. 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 & take action for professional negligence. Chartered Accountants neither licensed to practice law to enable his/her professional body to take action for professional misconduct against 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 Section 288(2)(iv) of Income-Tax Act..

    Non-Advocates can not practice the profession of law in India any more

    B.S.K.RAO, B.Com, LL.B, MICA,
    Auditor & Tax Advocate, BDKRAO,
    Beside SBI, Tilak Nagar,
    Shimoga-577201,(Karnataka)
    Mo : +91 9035089036 E-Mail : raoshimoga@gmail.com

    • P. R. Mehta, Advocate says:

      You are Very much right BSKRAO SIR…. IN MY OPINION ONLY ENROLLED ADVOCATES CAN DO THE PRACTICE OF LAW, AS ALL THE REVENUE AUTHORITY HAS ALL THE POWERS OF CIVIL COURTS AND PROCEEDING OF REVENUE AUTHORITY IS CIVIL PROCEEDINGS COVER UNDER CIVIL PROCEDURE CODE OF INDIA….

  30. CA. Ashwani Kumar Garg says:

    The individuls who got qualifed as LL.B and C.A shuold also be made elegible to enroll as a Advocate and Practising CA under both the regulators. What is harm if a person is qualifed both and holds dual membership, what damage it would cause to the society if it is allowed to practice both , nothing. Now, the old traditions and provisions need to be relooked and revisited with broad mind.

  31. Amit Bajaj Advocate says:

    Regular Practice of law and appearance before authorities both are all together different. Nobody can bar Non Advocates from appearing before authorities, it’s their right. But claim that Non Advocates have right to practice law is totaly against the provisions of Section 33 of Advocates Act and the verdict of SC In A K Balaji’s case.

    Section 33 allows practice of law if so Authorized under some other law, but income tax law or any other law has never Authorized non Advocates to practice the profession of law, similar to What Advocates Act so Authorizes. Merely because appearance by non Advocates is allowed that would not mean regular practice of law is also authorized. The term practice of law has already been well explained by SC in A K Balaji’s case.

  32. N.D.Jain says:

    Very good representation.

  33. T.Srinivasa says:

    While noting with great concern on this development, May I convey my sincere Thanks to all concerned in trying to address the issue before it gets implemented. While fully concurring with the views expressed as above, I may request ICAI to make a similar submission to seek permission to represent before DRTs, where code of civil procedure are not applicable, which opens up a huge opportunity to CA professionals and we can surely raise to the expectation and bring about early resolutions.

    Regards
    CA. T. srinivasa

  34. R.B.Popat says:

    Excellent submission. List of laws where agent can practice like consumer laws other such laws needs to be highlighted.

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