Case Law Details
CA Sandeep Kanoi
Allahabad High Court in the case of Tax Lawyers Association Lko. Vs. State Of U.P. as a Interim Measure held that no person whosoever, may be permitted to advertise in the Newspaper or any leaflet, inviting assesses for the purpose of filing of return or arguing before the authority under the VAT Act. Any person, who is not a registered advocate, shall not be permitted to appear before the Authority under the VAT Act. Judgment is a blow for Professionals like Chartered Accountant, Company Secretaries, Cost Accountants etc. who are working in the filed of UP VAT.
Brief Details of the case is as follows :-
Petitioners are aggrieved by the provisions contained in Rule 73 read with Rule 79(2)(f) of the U.P. Value Added Tax Rules 2008 (for short VAT Rules) which permits outsiders to practice in the field of Law before the VAT Authorities under the VAT Act. Learned Senior Counsel invited our attention towards Section 33 of the Advocates Act 1961 which provides that only Advocates are entitled to practice before any Court or authority. Learned Senior Counsel further submits that impugned Rule is ultra vires to the Constitution in view of the provision contained in the Advocates Act 1961 since under the garb of the impugned Rule, outsiders have been permitted to appear before the authorities under the VAT Act to practice in the field of Law. Attention has been invited by learned Senior Counsel to certain leaflets which seem to be advertisement by certain persons who are not registered Advocates inviting assesses with regard to filing of return on payment of Rs.400/- and odd.
Submission is that under the garb of said Rule, persons who are not skilled lawyer or have no knowledge in the field of Law, are appearing before the authority under the VAT Act, are spoiling academic atmosphere of the profession.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Sir,
In criminal cases “Doctors” opinion & evidence always required regarding injury sustained by a person during trail in court. Forensic expert opinion also required during trail. But is the reason, they are not allowed as authorized represented to appear before Police officer or magistrate to get a bail for persons.
Till today, I couldn’t understand, why CHARTERED ACCOUNTANTS are authorize as authorized representatives. They can also be called for witness as like in criminal cases DOCTORS & OTHER EXPERTS are called.
Under the shelter section 288(2) of income tax act, They are doing illegal “PRACTICE OF LAW”for money. This matter should be forward to BCI by every advocate for taking action u/s 45 of Advocate act or for file contempt in A.K BALJI CASE.
OTHER THAN ADVOCATES CAN APPEAR BEFORE VAT AUTHORITIES UNDER CPC/EVIDENCE ACT AGAINST SUMMONS ISSUED. THIS IS STILL PERMITTED UNDER UP VAT ACT.
CA MANOJ GUPTA says:
August 11, 2014 at 9:42 AM
Further in the Court itself all drafting deeds business is done by typists themselves without engaging an advocate. What about that. Why not protest there.
Mr. Gupta,
It means “You also want to become typist by doing that type of work or you do not have much scope in accounting job.. we think…that’s why Non-Advocates (viz. accountants) are doing legal practice by indulging illegally”… Now stop this type of ILLITERACY by all NON-ADVOCATES…
Dear CA
Why are you silent? Please post your learned comment. Here only Advocates are posting their views. Please CA post your views.
Anupam Kumar Adv. Gen. Secretary Tax Lawyers Association Lucknow:-
Give your contact address to spread the movement Sir or give test mail to raoshimoga@gmail.com
Definition[edit]
The definition of “unauthorized practice of law” is variable, and is often conclusory and tautological,[2] i.e., it is the doing of a lawyer’s or counselor’s work by a non-lawyer for money.[1] There is some agreement that appearing in a legally-constituted court in a legal proceeding to represent clients (particularly for a fee) is considered to be unauthorized practice of law.[1][2] But other variations are subject to interpretation and conflicting regulation, particularly as to the scope and breadth of the prohibition.[1] Black’s Law Dictionary defines unauthorized practice of law as “The practice of law by a person, typically a nonlawyer, who has not been licensed or admitted to practice law in a given jurisdiction.”[2]
On behalf of our Bar Association (TAX LAWYERS ASSOCIATION LUCKNOW)I appeal to all the local bar associations to spread our movement against non-advocates practicing before judicial or any quasi-judicial authorities.
IN T.D.VENKAT RAO CASE THE ISSUE WAS INCOME-TAX PRACTITIONRS, CHARTERED ACCOUNTANTS & TAX AUDIT
IN CITATION NOT VISIBLE ON DATE, THE ISSUE IS TAX-ADVOCATES, CHARTERED ACCOUNTANTS & PRACTICE OF LAW
LET US WAIT & SEE THE CITATION
CA CERTIFICATION COURSE IS NOT A DEGREE IN LAW TO PRACTICE THE PROFESSION OF LAW BEFORE COURT, TRIBUNAL & ADMINISTRATIVE AUTHORITIES ETC. IN USA DEGREE GRANTED BY UNIVERSITIES RECOGNIZED & NOT CERTIFICATION COURSES
ABOVE VERDICT OF SC IS AN INITIAL STEP FOR FACE TO FACE BATTLE BETWEEN BCI & ICAI (FINANCIALS)- TAX PROFESSIONALS THROUGHOUT INDIA SHOULD FOLLOW THE ISSUE IN QUESTION AT REGULAR INTERVALS TILL FINALITY
Supreme Court observed recently that the phrase “Practice of Law” under Sub-Rule (xx) of Rule 2 under Bar Council of India Rules means & includes:-
(a) practice before Court, Tribunal, Authority, Regulator, Administrative Body
(b) giving legal advise either individually or from law firm either orally or in writing
(c) giving legal advise to any Govt., International Body or representing any International Disputes Resolution bodies including international court of justice
(d) engaged in legal drafting & participating in any legal proceedings &
(e) representing in Arbitration proceedings or any other ADR approved by law
In view of the above findings of Supreme Court, the interim order of Hon’ble UP High Court holds good in the eye of law.
Practicing Law Without a License ?
By Michael A. Gould, CPA/ABV/CFF, ASA, CFE, CVA
September 2, 2011
As the lines of many professional services continue to blur, CPAs are often called upon to extend their roles into practice areas that bump dangerously close into another profession’s turf. The pressure to create “value- added” services has led CPAs to become facilitators for solving just about everything, from technology, capital requirements and real estate, to mergers and acquisitions, insurance and investments. However, when our role as “most trusted advisor” leads to performing services that many consider the practice of law, serious concerns arise. For example, it is not uncommon for CPAs to assist in the formation of new entities, such as corporations, partnerships and Limited Liability Companies (LLCs) using internet incorporation services or directly with the New Jersey Department of Treasury. Some CPA firms even employ an attorney who performs such legal services, as the drafting of wills and trusts.
Are these services crossing the line? Is it wise to have an attorney on staff ? By performing certain legal services for the client, do CPAs put themselves at risk, or are they merely redefining/expanding the role of the profession?
Forming Corporations, Partnerships and LLCs
When it comes to helping a client form or reform a legal entity, the law was modified on June 13, 2011 with the issuance of Opinion 47 from the Committee on the Unauthorized Practice of Law (“Committee”), appointed by the New Jersey Supreme Court. However, while a little gray, still is fairly well-defined on its position regarding CPA restrictions.
Prior to Opinion 47:
The Committee ruled in Opinion 2 (May 15, 1969) on the following question:
“May an accountant, not a member of the bar of New Jersey, acting for another, prepare a Certificate of Incorporation for filing with the Secretary of State of New Jersey?” The opinion states:
“It is the opinion of this committee that such action constitutes the unauthorized practice of law.” The opinion goes on to state, “The preparation of the corporate charter, by-laws and resolutions and related activities such as merging, consolidating and dissolving corporations, issuing corporate securities, increasing and decreasing capital stock all require expert legal skill and knowledge, and constitute the practice of law.”
The answer was clear: CPAs should steer clear of the formation of new entity service, or risk being found practicing law without a license. In addition, using internet services providers for formation services, according to Opinion 2, also violated the New Jersey Supreme Court’s ruling. The Court’s Opinion 2 states:
“The fact that the certificate of incorporation follows a prepared form available to the public generally will not mitigate the offense of unlawful practice, since the discretion and judgment exercised in determining the proper contents and the consequences thereof fall within the province of an attorney.”
The Committee reiterated its Opinion 2 in Opinion 12 (January 4, 1973) when the same Supreme Court Committee was asked “May a corporation, engaged in the business of selling pension plans to professional organizations, offer, for a stated fee, payable to the corporation, to have all incorporation papers prepared by the corporation’s attorney and to complete and file with theInternal Revenue Service a qualified corporation trust agreement ?”
The committee’s response was definitive:
“… it is clear that the offer of a corporation to form a corporation constitutes the unauthorized practice of law. The fact that the corporation may have the incorporation papers prepared by its attorney does not mitigate the offense, as the attorney would be acting for the corporation by which he was retained, not for the principals who were interested in the formation of the corporation.”
This statement is of particular interest, as it infers that even a CPA firm with an attorney on staff — just as the in-house attorney of the pension plan service provider — would be improperly practicing law when forming a corporation for a client other than his employer.
The Supreme Court’s findings under Opinion 2, from a strict reading, also state that dissolving a corporation for a client would be considered an unlawful practice of law.
The Committee issued Opinion 40 on this topic —“Businesses and Individuals Providing Services to the Public in the Preparation and Filing of Paperwork Sold in ‘Do-It-Yourself’ kits,” issued on June 21, 2004. It is interesting to note that the committee explains that the opinion arose “… from multiple grievances received from sitting judges and from other persons who complained about kits, or were given services beyond the mere purchase of the kits, or who were provided with legal assistance or advice by lay persons or non-New Jersey admitted attorneys.” This opinion reinforces opinions 2 and 12 when it states:
“Although non-lawyers who sell ‘do-it-yourself’ kits may help the purchaser by typing, transcribing, or translating, they are not permitted to counsel, advise, analyze, or otherwise help the purchaser complete the forms in the kits.”
In a letter to the New Jersey Society of CPAs in October 2004, the committee referenced Opinion 40, making the following request:
“It is our hope that you would undertake to acquaint your members with the Opinion’s holding. We want to avoid wherever possible having New Jersey Certified Public Accountants brought before our committee charged with the unauthorized practice of law.”
New Rules based on Opinion 47 issued on June 13, 2011 !
Opinion 47 modifies and reaffirms certain portions of Opinion 2. This opinion was issued in response to an inquiry by a New Jersey lawyer requesting an opinion on non-lawyers drafting corporate documents. The lawyer stated that he frequently encounters “poorly drafted operating agreements prepared by accountants or other laypeople.” In “balancing the public interest” the Committee both reaffirmed and modified certain parts of Opinion 2.
It is important to first state what Opinion 47 reaffirmed that constitutes the unlawful practice of law without a license. The opinion states:
“The Committee hereby reaffirms this prior opinion [Opinion 2] in part: preparing corporate operating agreements, by-laws, resolutions, and similar legal documents is the practice of law and may only be performed by lawyers.”
The Committee determined that these documents “set forth the internal procedures and rules for the corporation” or any other type of entity. Specifically, Opinion 47 states “Drafting such documents requires discretion and sound legal judgment to anticipate potential problems and protect the client. The legal expertise of a lawyer is required.”
So it is still clear, preparing corporate operating agreements, by-laws, resolutions, and similar legal documents by non-lawyers, including CPAs, is the unlawful practice of law without a license. CPAs should stay away from drafting these documents.
However, Opinion 47 gives accountants some relief to provide certain entity formation services. The Committee modified Opinion 2 by allowing non-lawyers to:
“…present to customers prepared, fill-in-the-blank certificates of incorporation, certificates of formation, statements of qualification, and certificates of limited partnership (collectively referred to as “certificates”) and type, transcribe, or translate the customers’ information in the form documents. Non-lawyers, however, may not advise or counsel the customer as to the appropriate contents of the certificates.”
In addition, Opinion 47 singles out CPAs for what appears to be some additional leeway when it states:
“…accountants who are licensed (i.e., certified public accountants) may advise clients as to the appropriate contents of certificates provided the licensed accountants inform their clients that assistance of counsel in the drafting of such documents is advisable.”
This provision is similar to modified Opinion 10, referenced below, that permits CPAs to prepare and file New Jersey inheritance tax returns as long as the client is notified, in writing and before the CPA commences work on the return, that a review of the return by an attorney may be desirable due to the possible application of legal principles related to the preparation of the inheritance tax return.
The CPA can now provide entity creation services to their clients as long as he/she informs the client that the assistance of an attorney is advisable regarding the preparation of these documents. The CPA should continue to steer clear of preparing corporate operating agreements, by-laws, resolutions, and similar legal documents which the Committee considers the practice of law that can only be performed by lawyers.
Attorneys Employed by a CPA Firm
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.”
While one would expect this finding would permit CPA firms to hire lawyers to serve in practice while at the same time permit law firms to employ attorneys who also hold CPA licenses to serve dual masters, the opinion, unfortunately, does not cover CPA firms who hire attorneys. The opinion specifically addresses lawyers practicing law in New Jersey who are also CPAs and practicing public accounting. If a CPA firm employs an attorney, in order for that attorney — assuming he or she is a member of the New Jersey bar — to perform and bill legal services for clients, he or she must do so under the banner of a New Jersey law firm, not the CPA firm.
Inheritance Tax Returns
While it would appear that our law firm colleagues hold the winning position with respect to dual-practice issues, there is one area where the NJSCPA successfully reclaimed a small square of turf involving tax returns.
In its Opinion 10 (November 1972), the Committee on the Unauthorized Practice of Law ruled that “… the preparation of an inheritance tax return requires the application of a gamut of legal principles, and that its preparation by a non-lawyer, acting for another, would constitute the unauthorized practice of law.”
However, in 1986, in the matter of the Application of New Jersey Society of Certified Public Accountants, 102.N.J. 231, 242 (1986), the Supreme Court modified the ruling to allow a limited exception that permits CPAs to prepare and file inheritance tax returns as long as the client is notified, in writing and before the CPA commences work on the return, that a review of the return by an attorney may be desirable due to the possible application of legal principles related to the preparation of the inheritance tax return.
Conclusion
The CPA is clearly at a disadvantage in regard to extending his or her practice into areas concerning legal matters, with the exception of entity creation services. CPAs should exercise caution and keep to our roles as trusted advisors, discussing options but referring the legal work to a qualified law firm. In the end, distancing yourself from offering legal services will likely yield a referral to your firm, rather than a fine or lawsuit for practicing law without a license.
__________________________________________________________________________
Michael A. Gould, CPA/ABV/CFF, ASA, CFE, CVA, is Director of Litigation Support and Valuation Services at Rotenberg Meril Solomon Bertiger & Guttilla, P.C.. He currently serves on the NJSCPA Professional Conduct Committee. Gould can be reached at mgould@rmsbg.com or 201-490-2077.
it is very simple when you appear before any judicial or quasijudicial authority you must posses law degree
JAIRAM SRIVASTAVA ADVOCATE FORMER GEN. SECRETARY 2013-2014 Says:
Your comment is awaiting moderation.
August 12, 2014 At 12:42 AM
Congratulations to all my brother Advocates all over INDIA those r practicing in the field of Taxation Laws.
This is the first step of TAX LAWYERS ASSOCIATION LUCKNOW in which HON’BLE HIGH COURT LUCKNOW BENCH LUCKNOW considered the facts mentioned in the WRIT PETITION and admitted the same and as interim measure directed the respondents:
” ANY PERSON,WHO IS NOT A REGISTERED ADVOCATE,SHALL NOT BE PERMITTED TO APPEAR BEFORE THE AUTHORITY UNDER THE VAT ACT “.
In fact excpt REGISTERED ADVOCATE, NO ONE ELSE is entitled to practice of LAW and in my views because:
” advocates Act 1961 is a comprehensive code and regulates all spheres of the practice and profession of law, starting from establishment of institutions for imparting legal education, syllabi and standards for legal education,practice and procedures,professional ethics to be maintained, duties of legal professionals towards the court, opponents,clients and towards themselves,to the creation of regulatory bodies and machanism including machanism for diciplinary control over the legal professionals.
– See more at: https://taxguru.in/goods-and-service-tax/hc-prohibits-advocates-appearing-vat-authorities.html#sthash.W093Kp62.dpuf
Congratulations to all my brother Advocates all over INDIA those r practicing in the field of Taxation Laws.
This is the first step of TAX LAWYERS ASSOCIATION LUCKNOW in which HON’BLE HIGH COURT LUCKNOW BENCH LUCKNOW considered the facts mentioned in the WRIT PETITION and admitted the same and as interim measure directed the respondents:
” ANY PERSON,WHO IS NOT A REGISTERED ADVOCATE,SHALL NOT BE PERMITTED TO APPEAR BEFORE THE AUTHORITY UNDER THE VAT ACT “.
In fact excpt REGISTERED ADVOCATE, NO ONE ELSE is entitled to practice of LAW and in my views because:
” advocates Act 1961 is a comprehensive code and regulates all spheres of the practice and profession of law, starting from establishment of institutions for imparting legal education, syllabi and standards for legal education,practice and procedures,professional ethics to be maintained, duties of legal professionals towards the court, opponents,clients and towards themselves,to the creation of regulatory bodies and machanism including machanism for diciplinary control over the legal professionals.
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.
NOW WE TRY TO UNDERSTAND INTENTION OF THE LEGISLATURE BEHIND SECTION 33
why this word not write as:- Except as otherwise provided in this Act or in any other law for the time being in force,on or after appointed day,no person shall,be entitled to practise in any court or before any authority or person unless he is enrolled as an advocate under this Act.
YOU WILL FIND correct meaning if you read it simultaneously with section 55.
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.
NOW WE TRY TO UNDERSTAND INTENTION OF THE LEGISLATURE BEHIND SECTION 33
why this word not write as:- Except as otherwise provided in this Act or in any other law for the time being in force,ON DAY OR AFTER APPOINTED DAY,no person shall,be entitled to practise in any court or before any authority or person unless he is enrolled as an advocate under this Act
MEANING OF WORD ” FOR THE TIME BEING IN FORCE” means temporary available for present time not permanently.
If we read simultaneously section 55 & 33 of Advocates act 1961. It means that anything contained in this act or other law confined to appointed day of Advocates act 1961. Appointed day means that day when Advocate act 1961 was come into existence. It is apparent clear from interpretation that it relates to the previous period not for present.
CA MANOJ ji 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)
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.
HOW COME AN ACCOUNTANT CERTIFY COMPLIANCE UNDER INDIAN TAXATION LAWS ?
ENOUGH IS ENOUGH, LETS PUT PRESSURE ON OUR CENTRAL GOVT. TO HAVE TAX PRACTITIONERS LAW IN INDIA ALSO IN THE COMMON INTEREST OF ALL TAX LAW PROFESSIONALS. I AM OF THE STRONG VIEW THAT IN THE PRESENT SITUATION OTHER THAN ADVOCATES CAN NOT PRACTICE LAW IN INDIA ANY MORE. LETS ALSO PUT PRESSURE ON BAR COUNCIL OF INDIA TO HAVE PERMANENT COMMITTEE TO WATCH UNAUTHORIZED PRACTICE OF LAW IN INDIA, WHICH IS SIMILAR TO THAT OF ONE PREVAILING IN ALL SUPREME COURTS OF EACH STATE IN UNITED STATES OF AMERICA.
vswami Sir, I can not understand your high std. english, please enlighten me what you are intending to say in all your comments
You are correct Mr.B.S.K.Rao, our esteemed Central Govt. lost heavily on account of Income-Tax in view of Certification from only Chartered Accountants. Therefore, ICAI (Financials) should reimburse around Rs 15 Lakhs Crores x 30 years to Govt. ie, since from the date of introduction of Section 44AB in income-Tax Act. I think the wealth held by ICAI (Financials) & its members on date is sufficient to reimburse the loss incurred by our Central Govt.
Further in the Court itself all drafting deeds business is done by typists themselves without engaging an advocate. What about that. Why not protest there.
In the field like VAT and Income Tax the more knowledge is possessed by CAs and a high percentage of advocates are not in touch with these topics. I myself handle income tax issues of some advocates who admit that we are more equipped then them in these matters. Further Exception provided in section 33 of Advocates Act is very clearly worded if advocates do not want to read it properly then it is up to them. Claiming themselves to be better knowledgable persons of law they should understand this. Regarding National Tax Tribunal the issue is different do not mix that here. There the NTT is by passing High Court. Further as of now files are moving to Non-CA, Non-Tax Lawyers who are simple graduates. We should concentrate on that issue rather than in-fighting.
By way of clarifying own individual perception and underlying thoughts: on the twin inter-related but opposing aspects of ‘rights’ v ‘responsibilities’,it is worthwhile to summon to focus, and stress: Speaking on the prevailing legal system, wprt the branch of administering justice, in place for long, the renowned top tax counsel and eminent legal luminary, N A Palkhivala, in his lifelong wisdom, identified three grave shortcomings, – 1) the commercialisation of the legal profession,2) the intractable complexity of modern society, and 3) the human weakness of while all the time emphasising ‘our rights’, failure to lay a corresponding stress on our responsibilities. And he had gone on to add,- Part VIA of the Constitution, which deals with Fundamental Duties has been a dead letter from the moment it was enacted by the Forty-second Amendment Act of 1976 (- from the notable speech delivered before an international forum in 1987; Source- published with title,The Judiciary and Legal Profession,Book, We the Nation).
It is a sad commentary that all the related facets or influencing factors, to be precise, the mindset and thinking of the literate and illiterate alike, have remain unchanged, for betterment or improvement of the ultimate aim of social welfare, – according to what well informed but core limited circles of humanists, not barring the very few law experts, are seen to have been advocating for,not changed even a wee bit,- over the two and half-decades since passed by.
By and large,in the result,anyone’s serious quest for true enlightenment has remained unfulfilled as ever before!
CA MANOJ GUPTA ji,
We can’t interpret here section 288(2) gives full right of ” Practice of law” to non advocates. There is not mentioned in income tax or any other act that Chartered accountants are authorized for “Practice of law” before income tax authorities.
Sir in case C. Venkatachalam v Ajitkumar C. Shah and Ors hon’ble Supreme courts given directions to Consumer Forums that forums will confirm THAT NON ADVOCATE REPRESENTATIVES can’t use it as a profession as like Advocates.
But in Income tax & other tax act Non Advocates uses authority granted in section 288(2) as a Law professional same as like Advocates.
A.K BALA JI CASE:- Hon’ble SC clearly declares that Non advocates can’t give opinion in non litigation matters & they cannot defend assessees in litigation matters.
In recent hearing of NATIONAL TRIBUNAL case Hon’ble Supreme court questioned to the Advocate of ICAI that Clerk & stenographer have good knowledge of law. Can be called Advocates to them then how can we allow CHARTERED ACCOUNTANTS to argue before National Tax Tribunal.
Except this VIII & IX th class studends also studied constitution law, Can we called Advocates to them. CA’s can assist to Advocate but not Argue & plead before Tribunal.
Respected Sh Anupam Kumar Adv. Gen. Secretary Tax Lawyers Association Lucknow
Sir, it is very good step taken by your association. Now it necessity of time that same kinds steps need to take in every state. We are not against any Chartered accountants & other professionals but we are against illegal trespass by Non Advocates in Advocate profession.
To enact Advocate act 1961 main intention of the legislature behind it to create special law professional class called as Advocates. It doesn’t mean authorized agents or power of attorney holder can do practice of law as like advocates. If Non advocates are authorized for it then there is no need of legal education & law colleges in india.
To enact CHARTERED ACCOUNTANT ACT 1949 main intention of the legislature behind it to create skilled accountants for practice of accountancy & there was no intention to create law professional class as like Advocates.
Words mentioned in section 33 ( Except anything contained in this act or any other law for the time being in force) doesn’t mean every body become Advocate or equal to Advocates.
ICAI (FINANCIALS) CREATED TO WORK IN THE AREA OF FINANCIAL ACCOUNTS ICAI (COST & MANAGEMENT) CREATED TO WROK IN THE AREA OF COST & MANAGEMENT ACCOUNTS. BUT ICAI (FINANCIALS) ALWAYS WANTS ENTER OTHERS AREA OF OPERATION WHY ? WHO IS GOING TO BELL THE CAT ? THAT IS WHY THE JUDGMENT IN THE INSTANT CASE, WHICH IS HIGHLY APPRECIATED ? I THINK GOD IS GOING TO BELL THE CAT ?
CHARTERED ACCOUNTANTS WHO ALSO STUDY LAW CAN NOT BE A GROUND TO ALLOW THEM TO ARGUE BEFORE ANY AUTHORITY TO PRACTICE ANY INDIAN LAWS. REGISTERED ADVOCATES ALONE ARE ENTITLED TO APPEAR, PLEAD & PRACTICE ANY INDIAN LAWS. THIS IS THE PREROGATIVE POWER VESTED ON REGISTERED ADVOCATES BY LEGISLATURE. WHEREAS PRACTICE OF COST, FINANCIAL & MANAGEMENT ACCOUNTS ARE JUST POWERS VESTED ON MEMBERS OF RESPECTIVE PROFESSIONAL BODY, BUT IT IS NOT THE PREROGATIVE POWER VESTED ON THEM. THERE IS LOT OF DIFFERENCE BETWEEN POWER & PREROGATIVE POWER.
Anupam Kumar Adv. Sir, recently we have formed an association of only tax lawyers at national level in Delhi to work in the common interest of tax lawyers of India. This is the first of this kind in India. Therefore, I hereby request you to give test mail to raoshimoga@gmail.com to know more about its future activity.
From last several years our Bar Association (TAX LAWYERS’ ASSOCIATION LUCKNOW) is fighting against the non-advocates who are not skilled in the field of Law, and appearing in legal matters before assessment and appellate authorities by submitting power of attorney simply on stamp paper of Rs.10.00. Our Association filed writ petition before the Hon’ble court and the court delivered the order by considering the gravity of issue. Undoubtedly this order helps us to spread our movement in vide canvas. Section 33 of the Advocate Act says that Advocates alone entitled to practise…..
Particulars of Total Income-tax admitted in tax audit cases for Asst. Year 2012-13 & 2013-14 that relates to return filed in ITR-4, 5 & 6 as provided by CPC, Bangalore as at 28.05.2014 are as under:-
Particulars……………Asst. Year 2012-13….Asst. Year 2013-14
ITR-4 Income-Tax Admitted Rs…..23,986 Crores..Rs…..23,952 Crores
ITR-5 Income-Tax Admitted Rs…..20,712 Crores..Rs. 21,556 Crores
ITR-6 Income-Tax Admitted Rs…2,92,266 Crores..Rs…2,34,456 Crores
Margin derived by farmers is not taxed in Income-Tax Act, but margin derived by next sellers of such agricultural output is taxed in their hands in Income-Tax Act. Presuming the output of corporate assessees reach the ultimate consumer in three stages & considering tax admission in corporate case & 50% of such corporate assessees do business with non-corporates covered by tax audit, who are in between the corporates & retailers and also considering non-corporates engaged in service sector, I am of the strong view that combined Income-Tax admission as per return filed in ITR-4 & 5 covered by tax audit U/s. 44AB should have crossed at least Rs. 15,00,000/-Crores. (Basis being 80:20 ratio of Ag. & Ind. Output).
From the above information, it is clear that our esteemed Central Govt. lost heavily on account of Income-Tax in view of Certification from only Chartered Accountants. Therefore, ICAI (Financials) should reimburse around Rs 15 Lakhs Crores x 30 years to Govt. ie, since from the date of introduction of Section 44AB in income-Tax Act.
To Add-
Key Note: In one’s longstanding conviction, founded on common sense, – should the narrated principle(s) be borne in mind and be imbibed /adopted as the uppermost influencing factor behind anyone’s thinking, then most of the controversies would get sorted out on own, pale into insignificance in the normal course, with no need for any external clue or guidance.
BECAUSE OF 46 PLUS CERTIFICATES FROM ONLY CHARTERED ACCOUNTANTS IN INCOME-TAX ACT, QUESTION ALSO RAISED IN MY MIND THAT HOW COME ACCOUNTANTS CERTIFY COMPLIANCE UNDER INDIAN TAXATION LAWS. IN FACT, THERE IS NO SUCH TYPE OF CERTIFICATION IN REVENUE SIDE THROUGHOUT THE WORLD. THEREFORE, I AM OF THE STRONG VIEW THAT 46 PLUS CERTIFICATES INSERTED IN INCOME-TAX ACT TO PROVIDE FULL EMPLOYMENT TO CHARTERED ACCOUNTANTS.
To share a few random thoughts:
Without having to go necessarily into the merits or demerits of any view on contra view in such controversies,in own perspective, -volunteered for an insightful consideration with an altruistic frame of mind and incisive deliberation- is THIS: What at the end of the day is the likely or certain impact, or how or to what extent it is going to impact the ultimate interests of the ‘serviced’ (the clientele)who are accustomed to go to a lawyer or CA or any other professional, with the belief and expectation of a useful but upright guidance or advice so as to endearingly serve his purpose; but at the same time, without tarnishing his image as a human obligated to live life in a society and as an inherent part of it to the end. No doubt,if not mistaken, the nation’s basic charter unequivocally guaranties as a fundamental right to practice any profession of individual choice or option. That is not to say, that it could be sans or de hors or in violation of the governing rules or norms being standards laid down by the legislature, in its wisdom, for the “common good” of all, as opposed to individual’s. Further,as repeatedly underlined by Palkhivala,- a world renowned Expert of his own caliber,on the strength of his lifelong conviction, through writings and speeches, – what ought not to be over sighted is the crucial criterion that every constitutional right so laid down has attached to it, rather necessarily entails, what are known or expected to be known, as ‘responsibilities'(in its sublime and profound sense),to the benefit of the “society”, of anyone seeking to claim such a right.
Section 29 – Advocates to be the only recognised class of persons entitled to practice law.—Subject to the provisions of this Act and any rules made thereunder, there shall, as from the appointed day, be only one class of persons entitled to practice the profession of law, namely, advocates.
Section 30 – Right of advocates to practice.—Subject to provisions of this Act, every advocate whose name is entered in the 1[State roll] shall be entitled as of right to practice throughout the territories to which this Act extends,—
(i) in all courts including the Supreme Court;
(ii) before any tribunal or person legally authorised to take evidence; and
(iii) before any other authority or person before whom such advocate is by or under any law for the time being in force entitled to practice.”
CA PRIYANK NAGORI MADAM, before interpreting any law, we should understand the intention legislature, which stands right before court of law
Section 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.”
Further Section 55 of the Act provides that:
Section 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;
In a case supreme court observed that dispute regarding quality of goods not a “practice of law” actually it is “practice of fact”. If we common mind applies then there is no question of interpretation of laws exist & it is only related with actual fact.
But on other hand practice before tax authorities normally actual fact converts in ” Practice of law” regarding interpretation of laws.
If we try to defend the case on fact than huge loss can be beard by assessee. Here we can’t ignore “practice of law”
Other things need to be take care by forum when it will authorize Non-Advocate to appear for consumer:-
70. Specifically, Regulation 16 inter alia makes provision to ensure that the agents do not indulge in any malpractice or commit misconduct. The relevant part provides as under:- “(6) A Consumer Forum has to guard itself from touts and busybodies in the garb of power of attorney holders or authorised agents in the proceedings before it.
(7) While a Consumer Forum may permit an authorised agent to appear before it, but authorised agent shall not be one who has used this as a profession: Provided that this sub-regulation shall not apply in case of advocates.
(8) An authorised agent may be debarred from appearing before a Consumer Forum if he is found guilty of misconduct or any other malpractice at any time.”
very good intial steps and the directions by Hon’ble courts
SITUATION RESULTING IN UNEMPLOYMENT OF NON-CA TAX PROFESSIONALS & FULL
EMPLOYMENT TO CHARTERED ACCOUNTANTS IN INDIAN TAX LAW PRACTICE
REQUIRING THE GOVT. TO HAVE TAX PRACTITIONERS LAW IN INDIA
(1) 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 of persons 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) Income-Tax Practitioners
(2) Original Income-Tax Act, 1961 was well drafted by learned officials in Finance Ministry & it was capable of meeting the expectation of the Govt. in all future events, except requiring amendments for events/changes taking place in this 21st Century. Disturbance to the original intention of legislature in Income-Tax Act, 1961 started in 1984 by the intervention of Institute of Chartered Accountants of India by way of inserting mandatory Tax Audit Certificate U/s 44AB by only Chartered Accountants. This was also cautioned by Sri.P.C.Padhi, former Chairman, Central Board of Revenue and Deputy Controller & Auditor General of India, Sri.D.K.Rangnekar former Editor, Economic Times, who were the members of Direct Taxes Committee, popularly known as Wanchoo Committee & gave dissenting note on the issue. The word “Chartered” of The Institute of Chartered Accountants of India denotes some thing of a dominion state of affair as against Sovereign Independent Republic of India, eagle emblem of ICAI is self explanatory. On date, there are 46 Plus Mandatory CA Certificates in Income-Tax Act, which were inserted on the behest of ICAI since 1984. Because of 46 Plus mandatory CA Certificates in Income-Tax Act, Non-CA Tax Professionals viz. Legal Practitioners, Cost & Management Accountants, Company Secretaries & Income-Tax Practitioners can not exercise the authority granted in the statute fully & independently. Hence new Non-CAs are not entering tax practice. Here, crux of the matter is CAs enjoy both the power of certification & representation, but Non-CAs are authorized only to represent assesses. This is practically causing strict hurdle for voluntary compliance & assesses prefer to approach only CAs for tax compliance, resulting in unemployment of Non-CA Tax Professionals & full employment to CAs. This position of Non-CA Tax Professionals is comparable to decree of court which can not be executed.
(3) Audit means “verification”, depending on the purpose they are classified as Energy Audit, Environment Audit, Product Audit, Process Audit, Legal Audit in USA & Tax Audit in Indian Income-Tax Act. Here, person conducting audit should be specialized in that subject. Hence, the word “Audit” is not the domain of Chartered Accountants. Assessing officers of Income-Tax Deptt. who come from different streams conducting audit in scrutiny proceedings are not Chartered Accountants. In conclusion, person specialized in Income-Tax law should issue Certificates/Reports in Income-Tax Act. On careful study of Section 288(2) of Income-Tax Act read with Rule 12A of Income-Tax Rules, it has to be presumed that all five class of persons referred in Para No.1 above possess knowledge of Section 145 read with 14 Accounting Standards of CBDT, required for Income-Tax Practice. Because certain qualification has been fixed in Income-Tax Act for these five class of persons. Accounting standards are clarificatory in nature & can not override Accounting System & Principles. Further, Accounting Standards framed by ICAI (Financials) & IFRS not yet all required for Income-Tax Practice. Here the question is, when such other four class of Non-CA Tax Professionals are authorized to prepare return under Rule 12A of Income-Tax Rules, there is no justification to prohibit them for issue of Certificates/Reports in Income-Tax Act. Therefore, it is clear that on introduction of Certificates from only Chartered Accountants in Income-Tax Act, original intention of legislature in Section 288(2) of Income-Tax Act read with Rule 12A of Income-Tax Rules has been struck down.
(4) As per the latest information provided by Directorate of Income-Tax (Systems), New Delhi against application filed U/s 6(1) of Right to Information Act, it is evident that only 65,570 CAs are practicing (See Exhibit-1), who are unevenly spread throughout India. India is highly populated country, existing number of practicing CAs does not meet the requirement of our economy. Due to ceiling on number of tax audit, Non-CA 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. In another 10 years, Non-CA’s who entered the Tax Practice in 1980’s will all eliminate & Govt. has to relay on only CA’s for seeking compliance under all Indian taxation laws.
(5) Indian legislature provided special class of persons called Advocates in Advocates Act, 1961 to practice all Indian laws. Therefore, appearance clause not yet all required in any Indian statute. 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, 1961. Our esteemed Central Govt. should come out with subordinate legislation; introduce Tax Practitioners Bill covering all tax law professionals in 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 SC verdict Treasury Department Circular No.230 for regulations governing practice before the Internal Revenue Service in USA & Tax Agent Service Act of Australia are very good examples for kind 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.
(6) Opinion No.50 Dt.12.03.2013 issued by Committee on Unauthorized Practice of Law appointed by Supreme Court of New Jersey 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 Professionals in USA. 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 with an exception Clause No.10.32, which reads as under:-
“Nothing in the regulations in this part may be construed as authorizing persons not members of the bar to practice law”
(7) Among Legal Practitioners, Cost & Management Accountants, Company Secretaries, Chartered Accountants and Income-Tax Practitioners, who wants to practice tax law in India, should mandatory seek registration under Tax Practitioners Law, whatever their parent body say is immaterial & Tax Practitioners Law should recognizes the qualifications acquired by all five class of tax professionals mentioned above. Population wise India is a large country, Govt. can not relay on one professional body for seeking voluntary compliance under Indian taxation laws. Tax Practitioners Bill is well suited to India, required for India & need of the hour. I hope Finance Ministry will consider this suggestion of mine working in the interest of all tax professionals and Govt. revenue since from 2001.
B.S.K.RAO, B.Com, LL.B, MICA,
Auditor & Tax Advocate,
BDKRAO, Beside SBI,
Tilak Nagar, Shimoga-577201,
KARNATAKA STATE.
MO : 0-9035089036
E-Mail : raoshimoga@gmail.com
C. Venkatachalam v Ajitkumar C. Shah and Ors
Direction issued by hon’ble Supreme court regarding representation by Non-Advocate please read carefully direction no. 110
Directions
109. In order to ensure smooth, consistent, uniform and unvarying functioning of the National Commission, the State Commissions and the District Forums, we deem it appropriate to direct the National Commission to frame comprehensive rules regarding appearances of the agents, representatives, registered organizations and/or non-advocates appearing before the National Commission, the State Commissions and the District Forums governing their qualifications, conduct 52
and ethical behaviour of agents/non- advocates/representatives, registered organizations and/or agents appearing before the consumer forums. The National Commission may consider following suggestions while framing rules
110. The Commission may consider non-advocates appearing without accreditation – A party may appoint a non-advocate as its representative provided that the representative – 1) is appearing on an individual case basis 2) has a pre-existing relationship with the complainant (e.g., as a relative, neighbour, business associate or personal friend)
3) is not receiving any form of direct or indirect remuneration for appearing before the Forum and files a written declaration to that effect
4) demonstrates to the presiding officer of the Forum that he or she is competent to represent the party. Accreditation Process
Appearing before Courts may be very exclusive preserve of lawyers – art of advocacy is not. There are any number of advocates whose skill of arguing and pleading is far from being satisfactory. There are several tribunals and quasi-judicial forums and arbitral tribunals, where professionals who are lawyers appear. So long as statute contains such enabling provisions, such appearance cannot be barred on the basis of Section 33.
The above ruling though by way of an interim order is directly in conflict with SC decision in C. Venkatachalam v Ajitkumar C. Shah and Ors. AND Bar Council of India v Sanjay R Kothari and Ors. 2011(9)SCALE479 in which SC had analysed Section 33 of the Advocates Act and had held as follows:
“The legislature in its wisdom has granted permission to the authorized agents because most of the cases before the Consumer Forums are small cases of relatively poor people where legal intricacies are not involved and great legal skills are not required, which may be handled by the authorized agents”.
“The other reason is that a large number of litigants may not be able to afford heavy professional fees of trained advocates, therefore, authorized agents have been permitted”.
“In our considered view the High Court was fully justified in observing that the authorised agents do not practice law when they are permitted to appear before the District Forums and the State Commissions”.
It is important to note both “for” and “against” arguments were made only by lawyers. They pursue their field of activity with their clients in focus. CS in Practice must emulate them. Fearlessly one must learn to raise issues so long as they are valid, logical and in accordance with law.
KSR
even this interim order comes, first we have to analysis the advocate act:
As per section 29 of Advocate act, 1961 says “Advocates to be the only recognised class of persons entitled to practise law.—Subject to the provisions of this Act and any rules made thereunder, there shall, as from the appointed day, be only one class of persons entitled to practise the profession of law, namely, advocates.”
and Section 33 of Advocate act, 1961 says “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.”
Points to be noted:
1. As per section 29, it specifies the word “Subject to the provisions of this Act……..” and Section 33 specifies “Except as otherwise provided in this Act or in any other law for the time being in force……”
2. that means if any provision contains in any other act which permits any person to appear before any authority or any person, then this act does not applies.
3. hence this doesn’t affect chartered accountant professionals.
This is not fair for assessee and also try to spoil the VAT professional’s life. Already advocate play in many issues. Court could permit to argue in court without lawyer.
Section 33 of Advocates Act 1961 which is basis for this decision reads as under
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.
It says” Except as otherwise
provided in this Act or in any other law for the time being in
force”
Since VAT laws provide CAs to appear before VAT authorities hence section 33 does not bar CAs to appear before VAT authorities.
It is very good order of Hon’ble high court. Recently Hon’ble Supreme court questioned to the Advocate of ICAI that Clerk & stenographer have good knowledge of law. Can be say Advocates to them then how can we allow CHARTERED ACCOUNTANTS to argue before National Tax Tribunal.
Except this VIII & IX th class also studied constitution law, Can we say Advocates to them. CA’s can assist to Advocate but not Argue & plead before Tribunal.