B.S.K. RAO

b-s-k-rao

It would be difficult to have a well-functioning tax system without tax advisors. Because most taxpayers are not familiar with the intricacies of the tax laws, tax advisors are needed so that taxpayers can fulfill their complicated tax obligations. As informed members of the public, tax advisors also provide input to the formulation of legislation and regulations.

By counseling taxpayers on how to comply with their legal obligations, tax advisors serve an important public interest; the state has an interest in fostering and protecting this role. The role of tax advisors, however, differs from that of the tax authorities in that their primary loyalty is to their client, not to the state. An important function of the regulation of tax advisors is to help strike an appropriate balance between loyalty to the system and loyalty to the client.

Regulation also has the goal of protecting clients from unscrupulous or incompetent tax advisors. Here, the regulatory interest of the state is similar to that in other areas of consumer protection. The danger is that such regulation might serve instead to protect the economic interests of those permitted to act as tax advisors, or might strangle the free exercise of the profession by creating undue bureaucratic control.

Different countries have adopted different regulatory approaches. Tax advice is typically given by different types of professional’s viz. Lawyers, Accountants & Tax Practitioners – each of which may be subject to independent regulation of its profession. Tax advice covers multitudes of different activities, which can be performed by professionals with different qualifications have different regulatory approaches. Tax Advice involves preparation of statements, filing of returns and acting & pleading before revenue authorities. Professional misconduct in the course of all these three activities are not covered by independent regulation of any professional body in India to make Tax Advisers accountable to the revenue Deptt. It means that, when they are not licensed for all such activity involved in tax practice, such independent professional body restrained to take action on members for professional misconduct. In India following five class of Tax Professionals are working in the area of Tax Advice.

(1) Legal Practitioners

(2) Chartered Accountants

(3) Cost & Management Accountants

(4) Company Secretaries

(5) Registered Tax Practitioners in the respective taxation statutes.

In GST regime, many new assesses will be add up to the compliance requirement under Goods & Service Tax Act, demanding the assistance of more Tax Professionals. Hence, it is right time to have unified control & regulation of all players practicing taxation law 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. On date, there is no required number of Tax Professionals in India to fully support compliance under proposed GST regime. “More persons in the line of tax practice leads to improvement in quantum of compliance & more revenue to the Government”. Therefore, I am of the strong view that India requires separate law for Tax Professionals to enjoy legitimate revenue collection in GST regime.

(Author is an Auditor & Tax Advocate and can be reached E-Mail: raoshimoga@gmail.com Mobile No. +91-9035089036)

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13 responses to “Regulation of Tax Professionals in the Indian Context”

  1. Tax.Adv.BSKRAO says:

    GST LAW PRACTICE IS THE ONLY BREAD & BUTTER FOR TAX PROFESSIONALS. THEREFORE WE HAVE GET AUDIT POWER IN GST AT ANY COST OR EFFORTS

  2. Tax.Adv.BSKRAO says:

    In view of coverage of both litigious & non-litigious matter within the definition of practice of law as per the verdict in the case of A.K.Balaji (SC), other than advocates can not appear before any administrative authorities in non-litigious matter also. Now only option left to us is to knock the doors of law court to delete all appearance clauses present in all Indian statutes so that only Advocate could appear before administrative authorities also. I hope that everyone will support the issues.

  3. Tax.Adv.BSKRAO says:

    Our FM is in favour of CAs, hence nothing works in favour of related Professionals was felt on personal meeting

  4. GOVINDARAJAN says:

    Excellent Article.

  5. SAIJU RAJA C says:

    First of all, we have to approach the Finance Minister for accepting the Registered Tax Practitioner as an Auditor at least non-corporate assessee. The revised GST draft laws-November, there is no provision to appear before the GST Authority as a Tax Practitioner.

    What will happen in future if this GST law finalized. There is a big question mark to Practicing tax practitioner in India.

  6. SUNIL MINOCHA says:

    The views of Mr.Rao are noteworthy.Besides,as the fundamental right to practice any profession or carry any occupation is enshrined in the Constitution of India,the existing tax practitioners’ fraternity, that is expanding enormously by the day,practicing in the field of indirect & direct tax from decades,are in dire need of a professional body regulated by an Act of Parliament,fortifying the true motto of the democratic establishment,i.e “of the people,by the people and for the people” Its inclusion in the GST regime on the anvil will bolster the spirit of Article 19(1)(g)of our Constitution that guarantees to all citizens the right to practice any profession or occupation aimed as a means to earn livelihood & to do an economic activity and facilitate more tax revenue and correct and timely compliance in GST law.

  7. सुरेश शुक्ला says:

    Good

  8. सुरेश शुक्ला says:

    बहुत अच्छा

  9. pradeep says:

    I fully agree with the view of Shri BSK Rao in the article. being accountant in industry, I face the CAs, CMAs, CSs & Tax Practitioners, Labour Law Practitioners for their specific requirements and information from same set of books of accounts. Therefore if separate laws for each class of legal practice like taxation profession can serve as uniform practices, disclosure, verification or audit all over the country, various educational qualifications can be recognized for the specific law practice. This will make special law practice uniform and issues of supremacy, recognition, authority etc under professional laws of CA,CS, CMA & Advocates Act will end. In my opinion legal profession can not compete with each other

  10. Advocate Rakesh Bansal says:

    (1) Legal Practitioners are also authorized to prepare return of income & represent assesses U/s.288(2) of Income-Tax Act read with Rule 12A. Rule 12A inserted by Notification No.2029 Dt.13.6.1962, require Legal Practitioner covered U/s 288(2) to furnish report on the examination of assesses account books & documents in the assessment proceedings. Here question arises when such audit clause already present in Rule 12A of IT Rules, why once again Section 44AB inserted in Income-Tax Act.

    (2) When Legal Practitioners are authorized to prepare return of income under 12A of Income-Tax Rules, it is presumed that such persons possess knowledge of Income-Tax law read with accounting principle prescribed U/s 145 of Income-Tax Act. Information to be furnished in Certificates/Reports under Income-Tax Act amounts to practice of law as it require interpretation of law more & basic accounting knowledge sufficient.

    (3) When Legal Practitioners are the only class of persons entitled to practice law U/s 29 of Advocates Act, 1961 (Law Professionals), there is no justification in
    prohibiting Advocates to issue Certificates or Reports in Income-Tax Act. (This is well supported by Bar Council of India Vs. A.K.Balaji SLP (Civil) 17150-17154/2012)

  11. Advocate Rakesh Bansal says:

    Other than Advocates can not appear before revenue authority on own motion by the strength of power of attorney against the notice issued to the client. But other than Advocates can definitely appear before revenue authority against specific summons issued to him.

  12. Advocate Rakesh Bansal says:

    I do 100% agree with the view of B.S.K.RAO in this article. I am of the further opinion that such orders passed under proposed GST Law can not be appealed before the appellate authority.

    • CA B S GHADAGE says:

      rao sir
      I agree with register tax practitioner should come under legal sanctity but simultenously they have to strict follow the code of conduct this area is lacking inrespect of tax practitioners

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