Advocates are only recognized class for “ Practice of law” under section 29 of Advocate act 1961. But they are regularly facing partiality in taxation matters since 1984.Changes are required in some areas of Income tax law to efficiently protect the interests of assesses and department as mentioned below.
1) Practice of law: – It is a prominent area to efficiently protect the interests of assesses . Authorized Representatives should be specialized in other laws like Local land law, Transfer of property act, Hindu law, Muslim law, Contract act, Power of attorney act, Drafting & pleading, Evidence act, Interpretation of laws, CPC and CRPC etc, study of only Income tax law is not sufficient to represent the assessees before Income Tax Authorities, to solve the disputes related to Income tax matters. How can Authorized Representative efficiently protect the interests of assessee. If he has no knowledge that such agreement is violating the provisions of other laws. Which agreement or affidavit is used to defend the case under income tax law. It is a crystal clear that only skilled persons in law should be Authorized Representatives for efficiently protect the interests of assesses.
2) Legal opinion:- There are number of forms in income tax act and certification of those forms is a part of legal opinion. Advocates are only recognized class for given legal opinion on any Indian laws . Form 3CD of Income tax act is related with the legal opinion on Income tax laws than how can be debarred Advocates from certify form 3CD. How can Non- Advocate give legal opinion on tax laws and this provision need to be amended.
3) Confliction of interests:- “Confliction of interests” is a professional misconduct as decided by Apex court and Advocate may be suspended from practice for two years. If he involves himself to represent conflicted interests. Now we understand what is a “confliction of interests”? Confliction of interests means if an Advocate represents any party in a case before any court and prior to this he was council of opposite party in same case than it is called “ confliction interests” of both parties in litigation.
4) Confliction of interests in Income Tax Act: When a Auditor is auditing the accounts of assessee under statutory obligation on behalf of revenue to find out any concealment in the account books and further he represents same assessee before “ Revenue authorities” than it can be amounted to “confliction of interests”. Due to such act either assesses or Department interest will be effected . No AR can protect interests of both parties equally and ones right must be effected.
5) Difference between “ Vakalatnama” and “ Power of attorney:- Vakalatnama is a power of attorney for “ Practice of law”. Vakalatnama can be executed only in favour of Advocate. Power of Attorney under Powers of Attorney Act 1882 can be executed in favour of any person for “act”. Vakalatnama is not covered under Powers of Attorney Act 1882. It is necessary to mention here right to “ Practice of law” is different from right to “Act”.
6) Audit of financial data:- Same cash book, day book, ledger and stock register is maintained by assessee to keep financial record of his business. What is need to verify same financial data again and again under different tax acts like Income tax, vat, service tax etc. It is an unnecessary financial burden on assesses and strict hurdle to widen genuine tax base.
Conclusion:- Representative clauses need be deleted from different acts and only Advocates should be authorized to represent legal matters related to tax laws before revenue authorities . Auditor should be barred from appear before revenue authority on behalf of assessee, whose accounts are audited by him to avoid confliction of interest under income tax act. It should be deemed proper compliance for other acts, if under any act financial data of the assessee is audited by auditor. These steps should be taken to protect the interests of assessee.
(ABOVE ARE THE PERSONAL VIEW OF AUTHOR)