CA Manoj Fadnis
The Institute of Chartered Accountants of India, New Delhi
Ref: Kindly clarify the doubts over appearance of Chartered Accountants before the Income Tax Authorities.
I would like to request you to issue a notification from the Institute regarding the appearance of Chartered Accountants before the income tax authorities. The income tax officials are threatening practicing CAs that they can’t appear before them, Recently Tax Bar Association, Rishikesh has issued a letter to Income Tax Authorities to ban chartered accountants from appearing before them. Earlier , Rajasthan Tax Bar Association have filed a petition before Chief Commissioner of Income Tax (CCIT), Rajasthan and urged him to not to allow anyone else then advocates Registered with state Bar Councils to appear in any proceeding before Assessing Authorities as well as Appellate Authorities of Income Tax.
In my opinion , all such representations are coming out of following two judgments of Madras High Court and Supreme court. i.e 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)
The recent remarks of the Apex court in the case of Madras Bar Association Vs. Union of India on chartered accountants at the time of declaring NTT unconstitutional have also added fire in to it. Now Explanation to Section 288(2) of Income Tax Act on the lines of the definition of Chartered Accountant in the Companies Act is about to land. These amendments will take effect from 1st June, 2015. where following classes of persons are excluded from being called Accountant:
i. Those persons who are not eligible for appointment as an Auditor in the case of a company as per Section 141(3) of the Companies Act, 2013
It will further add the fuel and it shall be a tool in the hands of authorities to harass us. Because of activeness of Social media, now Government is issuing clarifications on day to day basis, what’s a wrong with the ICAI to issue a clarificatory note over the issue? That note shall definitely support us to counter their misrepresentations.
We are aware that Section 288(1) of Income-tax Act provides qualification/eligibility of a person (Authorised Representative, ‘A.R.’, in short) to represent a case of an assessee before Income-tax authorities except where personal presence of the assessee is required. Clause (iv) of sub-section 2 of Section 288 provides that an “Accountant” can also be an A.R. In addition to representing the cases of tax payers before Income-tax Authorities, he is also authorized to prepare Audit Reports in accordance with the provisions under Section 44AB, Section 80-IA, Section 115JB, Section 92E etc. Explanation below sub-Section 2 provides the meaning of term “Accountant” which means a Chartered Accountant within the meaning of Chartered Accountants Act 1949 (38 of 1949) and includes in relation to any state, any person who by virtue of provisions of Section 226(2) of the Companies Act 1956 is entitled to be appointed to act as an Auditor of the companies registered in that State.
An Accountant is barred from appearing before Income-tax Authorities in cases If any person—
(a) who is a legal practitioner or an accountant is found guilty of misconduct in his professional capacity by any authority entitled to institute disciplinary proceedings against him, an order passed by that authority shall have effect in relation to his right to attend before an income-tax authority as it has in relation to his right to practice as a legal practitioner or accountant, as the case may be;
(b) who is not a legal practitioner or an accountant, is found guilty of misconduct in connection with any income-tax proceedings by the prescribed authority, the prescribed authority may direct that he shall thenceforth be disqualified to represent an assessee under sub-section (1).
So, unnecessary a pressure is built up on us and it is going to be problematic for the chartered accountants practicing in small cities. Another fact is that Tax Bar Associations are more or less dominated by the Advocates. It has also come to my notice that The Tax association which are having Chartered accountants as their member are being declared illegal by the bar councils.
I also request you to form a national policy to have association of Chartered Accountants with a centralized affiliation and to get the national recognition from the CBDT for the same. Some years ago Luck now has established its own Chartered accountant association for the Income Tax and High court directed them to delete the name of BAR from the name. If it is possible to use the present going on system of branches to serve as association, it shall not be a very good idea. I fail to understand why ICAI is ignoring these developments because it is very clear that the survival of Chartered accountant is on the definition of accountant in section 288.
CA AMRESH VASHISHT, Meerut