The appearance before the Authorities established under the Income-Tax Act does not amount to ‘practice of profession of law’ ICAI to PrCCIT Chandigarh

Institute of Chartered Accountants of India (ICAI) has, on 27-11-2015 submitted a representation to Principal Commissioner of Income Tax (PrCIT), Chandigarh on the proposal of not allowing Chartered Accountants/ Non- Advocates for practice of law in the course of proceedings before revenue authorities.

ICAI has stated that it would inappropriate to consider the said proposal and has sought an opportunity to present its case in person before any final decision in this regard taken by PrCIT.

It is notable that on 25-11-2015, ABCAUS circulated an update on the subject with the letter of PrCIT in this regard.

In its representation, ICAI has brought out the importance of the Institute and the specialization of its chartered accountant members in the field of direct/ indirect taxes. Apart from highlighting the education and training programme of the Institute, taxation including Indirect Taxes has been claimed as one of the core-competence areas of Chartered Accountants. Attention has also been drawn to the code of conduct/Ethics which are required to be followed by its members.

It has been highlighted that matters before the Income Tax Authorities involve issues and/or questions mainly concerning accountancy which require knowledge and expertise in accounting matters. Also it has been pointed out that since 1940 with the setting up of Tax Appellate Tribunals Chartered Accountants are regularly appearing before it.

It has specifically been stated with reference to relevant section/rules and statures that they permit Chartered Accountants to appear before various authorities and Tribunals. Reference has also been made to Section 288 of the Income Tax Act, 1961 read with Rule 50 of the Income Tax Rules, 1962 whereby CAs are allowed to appear before Income tax Authorities.

Apart from above, on the scope of the term, ‘practice of profession of law’ it has been pointed out that the term has not been defined under the Advocates Act, 1961. It has been specifically represented that The appearance before the Authorities established under the Income-Tax Act does not amount to ‘practice of profession of law’. Reliance has been placed on the following judgments:

1. C. Venkatachalam vs. Ajitkumar C. Shah & Ors. [6 (2011) 9 SCC 707] - related to the provisions of the Consumer Protection Act, 1986.

2. R.D. Nagpal v. Vijay Dutt [(2011) 12 SCC 498] - related to the provisions of the Consumer Protection Act, 1986.

It is notable that in both the above cases, the Hon’ble Supreme Court has dealt with the question of appearance of authorized agents before Consumer Courts.

3. Tax Lawyers Association, Lucknow Throu General Secry.& Anr. vs. State of U.P-Allahabad HC -related to appearance of CAs before Trade Tax Authorities.

In the above case, the Court observed that, “ The embargo which is enacted in Section 33 of the Act of 1961 upon persons, who are not advocates practicing in any court or before any authority or person is, therefore, clearly subject to a provision to the contrary in the Act or except as otherwise provided in any other law for the time being in force. Hence, where a provision is contained in any other law for the time being in force, entitling persons who are not advocates to practise in any court or before any authority or person, its effect would be to lift the embargo which is imposed by Section 33 of the Act of 1961.”

4. Rajkot Engineering Association and Ors. And Tax Advocates Association and Ors.v. Union of India MANU/GJ/0019/1986- related to selection of the authorized representative by the assessee.

Download Full ICAI Representation to PrCIT, Chandigarh Click Here >>