Ever increasing population in our India and the opening of numerous modes & avenues for acquiring higher education for the people in India, and lack of means for any investment to take up suitable business-ventures by the Educated Youth hailing from the Economically Weaker Sections, is leading to chronic unemployment problem preferably among educated; and very particularly “Unemployment” is the main problem in our India. Keeping this in mind, our Government is striving to do a lot for curbing the Unemployment Problem in India. One such attempt may be that of creating scope for Lawful Self-Employment, by way of creating certain special provisions for certain professions through the enacted Acts, like Income Tax Practitioners under Income Tax Law, GST Practitioners under GST Law, etc.
It is a well known fact that the following Divisions of the Ministry of Finance, Government of India have been, with a view to assist, support and legitimately defend the Tax Payers, providing scope for representing for & on behalf of Tax Payers by certain categories of professionals, such as Chartered Accountants, Advocates [and those Tax Practitioners who had enlisted under Previous Acts (Repealed Acts)], and even a few categories of Fresh Graduates (Educated Persons) are allowed as “Authorized Representatives” in those respective Acts enacted.
(1) The Central Board of Indirect Taxes & Custom (CBIC), and
(2) The Central Board of Direct Taxes (CBDT),
The CBIC is allowing, as per Section 48 of Central Goods & Services Tax Act, 2017 read with Clause (c) of Sub-rule (1) of Rule 83 of the CGST Rules, Fresh Graduates & Post-Graduates holding Degrees like B.B.A., B.B.M., M.B.A., M.B.M., B.Com., M.Com., B.L.,/LL.B., M.L.,/LL.M., etc., to act as “Goods and Services Tax Practitioner (GSTP)” defined under Sub-section (55) of Section 2 of Central Goods & Services Tax Act, 2017. The Enlistment/Registration process for “Goods and Services Tax Practitioner” is made available ON-LINE, and for this reason it works well, without any harassment to the Applicants.
I humbly submit that the CBDT is allowing the Fresh Graduates possessing a Degree in Commerce or Law, as per Clause (vi) of Subsection (2) of Section 288 of the Income Tax Act, 1961 (read with Rules 49, 51, 54 and 55 of Income Tax Rules, 1962) to act as “Income Tax Practitioners” to represent for & on behalf of Income Tax Payers. As per Clause (vi) of Subsection (2) of Section 288 of the Income Tax Act, 1961 all those who possess a degree or post-graduate degree in commerce like B.Com., or M.Com., respectively & all those who possess a degree or post-graduate degree in Law like B.L., LL.B., B.G.L., B.A.L., B.L.L., or M.L., LL.M., M.G.L., M.A.L., M.L.L., respectively are allowed to take up the profession of Income Tax Practitioner.
The Enlistment/Registration process for “Income Tax Practitioners (ITP)” is purely on Manual Basis. Thus, the concerned Income Tax Authorities are acting as per their own fancies or misinterpretation of Rule 55 of Income Tax Rules, 1962 are causing hardship to the Applicants.
Those Income Tax Authorities, who have failed in proper application of their mind for properly knowing or understanding clear applicability of Rule 55 of Income Tax Rules, 1962 in tune with “Clause (vi)” of Section 288(2) of Income Tax Act, 1961 have automatically widespread their “Wrong Conclusion/Decision” or their “Clouded Judgment”. This sort of diffusion of “Clouded Judgment” has, at its core, spoiling the aspirations of all those applicants interested in becoming ITD Authorized Income Tax Practitioners to represent their Clients/Taxpayers upto the level of Hon’ble ITAT.
In fact, the Clauses (v), (vi), (via) and (vii) of Subsection (2) of Section 288 of Income Tax Act, 1961 allows the qualified to be & become ITD Authorized Income Tax Practitioners.
The present Rule 55 of the Income Tax Rules, 1962 read as –
“If the Chief Commissioner or Commissioner is satisfied that the applicant fulfills the requirements of Clause (v) or Clause (vi) [or *Clause (via)] or Clause (vii) of sub-section (2) of section 288 and has been practicing before income tax authorities for not less than one year on the date of application, the Chief Commissioner or Commissioner shall enter the name of the applicant in the register and issue him a certificate of registration in Form No: 40”.
If the prerequisite/condition/norm laid under Rule 55 [i.e., “and has been practicing before income tax authorities for not less than one year on the date of application”] is applicable to all the Clauses of Section 288(2) of the Income Tax Act, 1961, said Rule 55 ought to be in the following format:
“If the Chief Commissioner or Commissioner is satisfied that the applicant fulfills the requirements in applicable clause of sub-section (2) of section 288 and has been practicing before income tax authorities for not less than one year on the date of application, the Chief Commissioner or Commissioner shall enter the name of the applicant in the register and issue him a certificate of registration in Form No: 40”.
Since the [Clause (via)]* was inserted under Section 288(2) and Rule 55 of Income Tax Law later on, we need to arrive at the probable original statute of the Rule 55 that might be real one prior to amendments made to Section 288(2) and Rule 55 of the Income Tax Law. If the later on added Clause (via) under the Rule 55 is set aside or left behind for a while, then the Rule 55 of the Income Tax Rules, 1962 was to read as –
“If the Chief Commissioner or Commissioner is satisfied that the applicant fulfills the requirements of Clause (v) or Clause (vi) or Clause (vii) of sub-section (2) of section 288 and has been practicing before income tax authorities for not less than one year on the date of application, the Chief Commissioner or Commissioner shall enter the name of the applicant in the register and issue him a certificate of registration in Form No: 40”.
From the above format of Rule 55, any layman can easily understand that since the Clause (vii) of sub-section (2) of section 288 of Income Tax Act, 1961 has prescribed earlier / prior practice for that category of applicants, the suffix “and has been practicing before income tax authorities for not less than one year on the date of application” is applicable to Clause (vii) of sub-section (2) of section 288 only. In fact, the main reason behind numbering a New Clause as Clause (via) [and inserting/placing before the Clause (vii)] might be to avoid repetition/reappearance of the prerequisite like “Prior Practice for One Year”.
Therefore, when considering the Form No.39 (meant for enlistment of name of the Authorized Income Tax Practitioners in the Register of Authorized Income Tax Practitioners) the concerned Income Tax Authority has to verify just as to whether the applicant has fulfilled the requirement/s mentioned in the respective “Clause” of Subsection (2) of Section 288 of the Income Tax Act, 1961, under which the applicant has submitted his Form No.39.
Due to illegitimate insistence for earlier / prior practice from the candidates under “Clause (vi)” of Subsection (2) of Section 288 of the Income Tax Act, 1961, the aspirants of becoming Authorized Income Tax Practitioners are diminishing day by day. In fact, for this reason only, the Educationally Qualified Youth are not evincing any interest in becoming Authorized Income Tax Practitioners. Even if any of the Educationally Qualified submits their Applications in Form No.39, the Income Tax Officers are discouraging them by meaninglessly rejecting those applications with a misconception that the applicant is not having Previous Experience. This is really against the National Policy for Reducing the Unemployment Problem in India.
If the CBDT, New Delhi fails to curb such an anomaly, nobody could be able to enlist his/her name in the Register with his/her Educational Qualification acquired as per Clause (vi) of Section 288(2) of Income Tax Act, 1961.
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Author: Syed Shah Khadri, B.B.A., LL.B., Income Tax & GST Practitioner, Proprietor of Syed Zulfakhar Tax Consultancy Services (Regd.), Anantapur, Andhra Pradesh.
