Revised Guidelines-Standing Counsels Engagement to represent the Income-tax Department before High Courts and other judicial forums CBDT Instruction

Revised Guidelines-Standing Counsels Engagement to represent the Income-tax Department before High Courts and other judicial forums-CBDT Instruction

Guidelines-Standing Counsels Engagement Income Tax

Instruction No. 7/2016

F No 279/Misc./M-75/201 1-ITJ (Part-II)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi the 7th September, 2016

All Principal Chief Commissioners of Income-tax

Sub: Revision of the Guidelines for engagement of Standing Counsels to represent the Income-tax Department before High Courts and other judicial forums; :revision of their Schedule of fees and related  matters- regarding

With a view to ensure improved representation before the High Courts and other judicial forums and in supersession of Instruction No 3/2012 on the subject, Board has laid down following guidelines for engagement of Standing Counsels.

2. It  must  be  ensured  that  the process  for  engagement  of Standing  Counsels should  be  initiated  at  least  6 months  before  the  expiry  of the  panel.  The size of the  panel  should  be carefully decided  based  on  the pendency of appeals (on an average one Senior Counsel can handle 450-500 appeals).  A  buffer  of  at  least  25% of  the required strength or a workable buffer should be considered while determining  the  size  of  panel.  The panel  of counsel s proposed   along with the  buffer  (hereafter  called  “extend ed  panel)  shall  be  forwarded to Board.  It  must be noted that the buffer in the extended panel will not be entitled for any compensation  or remuneration  or retainership etc. The names in the extended panel would be considered in cases of exigencies like resignation, termination etc. of the  counsel  in the panel.  Further, the  names  in the extended  panel  would  be  proposed  by  the Pr. CCIT/ CCIT immediately following such exigency for regular empanelment to  Board.  The  tenure  of  such counsel/s would be valid for the remainder of the tenure  of the  panel.  Having this extended  panel  read y  would ensure that  time  is  not  lost  in  re-doing  the  whole  process  of  advertisement  etc.  for  filling  up  one  or  two vacancies  in  the panel.    It  is  further suggested  that the  ratio  of senior  counsel  to junior  counsel should  normally be  1:1. However,  the  Pr.CCIT/  CCIT may decide otherwise  depending on  the  local  conditions.

3. The proposal of the Pr. CCIT/ CCIT shall invariably include:

(a) Composition of the Screening
(b) Pendency of appeals.
(c) Minutes of the meeting with details of selection starting from placing advertisement to final evaluation.
(d) List of existing Counsels along with number of cases handled by each and their outcome/performance evaluation  and reasons for their non-inclusion  in the fresh panel, if any.
(e) Grading/evaluation list of the fresh panel.

4. The procedure for engagement of Standing Counsel s, requisite qualifications and terms and conditions of their engagement shall be as per guidelines in Annexure-I

5. The Standing Counsels will be engaged  in  accordance  with  the revised  schedule of fees and  related terms and conditions applicable to them as given in Annexure-II.

5.1 These guidelines and the revised schedule of the fee and allowances shall come into effect from 07.09.2016.

5.2 The Standing Counsels will be paid fee at the old rates in respect of their appearance and other work done by them prior to 07.09.2016 and at the revised rates in respect of the work done by them on or after 07.09.2016.

6. This issues with the concurrence of Ministry of Law and Justice vide their D. No J-11019/2/2016- Judl.dated 27.05.2016 and the Department of expenditure I.D. No. 9(4)/2012-E.II(B) dated 1st September,2016.

7. This Instruction may be brought to the notice of all Officers

8. Hindi version of the Instruction will follow.

(D. S. Rathi)



1. Category of Standing Counsels
The Standing Counsels engaged/to be engaged by the department will fall into the following two categories:

(a) Senior Standing Counsel
(b) Junior  Standing Counsel

In a station where counsels do not have sufficient experience to be engaged as Senior Standing Counsel, the CCIT may designate a Junior Standing Counsel to perform the functions of Senior Standing Counsel for that station. The Standing Counsel so designated shall perform the function of arguing cases before the Hon’ble High Court/ITAT in the absence of a Senior Standing Counsel.

2.  Eligibility Conditions for engagement as Standing Counsel
The eligibility conditions for each category of counsels shall be as under:

2.1 Senior Standing Counsel: In order to be eligible for engagement as Senior Standing Counsel, a person should

a. be eligible to appear before the High Court as an advocate and
b. have a minimum experience of five years of handling direct tax matters before High Courts or ITAT as an advocate.
have been a Junior Standing Counsel of the Department for three years
have been an officer of the Income-tax Department who is eligible to appear before the High Court as an advocate and has retired/resigned from the post of Add!. Commissioner/Director of Income-tax or any equivalent post after occupying such post for at least three yea rs or any higher post or who has been a member of ITAT, provided that he has not been removed/dismissed or compulsorily retired from service on account of disciplinary action and no disciplinary proceeding under service rules or pension rules is pending against him.

2.2 Junior Standing Counsel: In order to be eligible for engagement as Junior Standing Counsel a person should

a. be eligible to appear before the High Court as an advocate and
b. have a minimum experience of three years of handling preferably direct tax matters before High Courts or ITAT.
have been an officer of the Income-tax Department who retired/resigned from  the  post  of Additional/Joint CJT or below and is eligible to appear before the High Court as an advocate, provided that he has not been removed/dismissed or compulsorily retired from service on account of disciplinary action and no disciplinary proceeding under service rules or pension rules is pending against him.

3. Procedure for engagement of Standing Counsels

3.1 For the purpose of engagement, the CCIT will call for applications in Proforma -A1 & A2 (as applicable), by advertisement in 1 (one) national and 2 (two) local newspapers, and from Bar Association of High Court. The advertisement shall also be placed on the notice boards in all the income-tax offices of the Region as well as Department’s Official It should, however, be ensured that the process of engagement is transparent and broad based.

3.2 A Screening Committee headed by the CCIT and including at least two Officers not below the rank of PCIT/PDIT/ClT/DIT and CIT (J), wherever possible, shall be formed for the purpose of evaluation of proposals received . As far as possible, suitable representatives from fields like IT/TP/ Exemptions shall also be included. ln Delhi, Mumbai, Kolkata (WB & Sikkim), Chennai (Tamil Nadu) and Bangalore (Karnataka & Goa), a Joint Secretary Level Officer from Ministry of Law and Justice (MoLJ) may be requested to be part of the Screening Committee. In case there is no timely response from the MoLJ, the Screening Committee may proceed without any further delay.

3.3 Particulars of the applicants’ expertise in handling  direct tax  matters,  aptitude  for  interpretation  and their suitability to represent the cases of the Department will be examined by the Committee in an interview conducted for the purpose and an evaluation repo11 along with recommendation of the CCIT will be sent to the Board in Proforma-B. The evaluation shall be clone on the parameters enumerated in Proforma B-1 and B-2 whereby marks would be awarded to each candidate. The Committee shall fix a minimum benchmark for selection of candidates at the beginning of the process. Candidates who are below the benchmark  are not to be considered  irrespective of the number of vacancies.

3.4 Standing Counsels should preferably be taken from amongst the panel of Jr. Standing Counsels of at least three years standing, subject to favourable assessment by the Screening Committee . In assessing suitability, the quality of drafting, assistance to the appearing counsels and co-ordination aptitude with the officers of the Department should be taken into account.

3.5 The engagement of panel shall normally be for a period of three

4. Performance review

4.1 The performance of the counsels shall be reviewed by the jurisdictional PCIT/CIT whose cases have been represented by the Standing Counsel, on a quarterly basis and a report in Pro forma-C shall be submitted to CIT(Judicial)/CCIT before I 5th of the month following end of each quarter.

4.2 On the basis of the reports received from the CsIT, the CCIT/ CIT (J) shall review the performance of the counsels for every financial year and send an annual report to the Board in Pro forma-D before 30th June of the following year.

5. Allocation of Standing Counsels to PCIT/CIT Charges

5.1. The CCIT will be the overall in charge of entire litigation work on behalf of the Income-tax Department in his region before the High Court concerned. Allocation of panel of standing counsels to PCIT/CIT charges has to be done by the CIT (J) under instructions from/ approval of the CCIT. In places where post of CIT (J) is not provided for, this work should be undertaken by the Add!. CIT (J)/Technical work ing in the 0/o Pr.CCIT under instructions from/ approval of the CCIT. Equitable distribution of 450-500 appeals to each Senior Standing Counsel must be ensured.

5.2 Normally,  the Advocate from the panel  of Sr. Standing Counsels should  be authorized  to argue cases. However, the CCIT concerned may authorise Junior Standing  Counsels to argue in such matters  as deemed fit. It must be ensured that 20% of cases are assigned to such Junior Standing Counsels, who have at least 1 year experience as Junior Standing Counsel, to be argued independently by him/her.

6.  Termination of engagement/resignation/expky of term
The engagement of the Counsel would be terminable through written intimation by either side without assigning any reason. The CCIT is authorized to act on behalf  of the Department for the purpose under intimation to the Board. On expiry of the term or termination or resignation, the Stand ing Counsel shall immediately handover the br iefs and other related papers to the PCIT/CIT concerned or the other Standing Counsels nominated by the CCIT for the purpose and the pending bills of the counsel shall be settled within three months of the submission of the bill.

7.  Duties of the Standing Counsel

(A) The Counsel shall

7.1 draft Memorandum of Appeals and related petit i ons/applications within reasonable time, keeping in view the limitation period;
7.2 file the appeals/other petitions/applications as required, within limitation and communicate  the particulars (Diary number, ITA number etc.) to the PCIT/CIT concerned;
7.3 communicate defects/office objections, if any, in the appeals etc. and take prompt steps to rectify the same with the assistance of the PCIT/CIT;
7.4 appear on behalf of the department in the High Court/ other judicial forums, as required in the cases assigned to him;
7.5 keep the PCIT/CIT inf0rmed of the important developments in the case particularly with regard to dates of hearing, conclusion of hearing, date of judgment/order etc.;
7.6 when any case attended to by him is decided against the Department , apply for certified copy of the judgment with in two working days of pronouncement and give his opinion regarding the advisability of filing an appeal/SLP against such a decis ion within three days of taking He shall send an ordinary copy of the same, as soon as available, to the PCIT/CJT concerned. In other cases also the same time limits shall be applicable, though opinion will not be required ;
7.7 if required, render all assistance to the law officers, Advocate General of the State Government, special or Senior Counsel, who may be engaged in a particular case before the Supreme Cou rt, High Courts,  ITAT, ;
7.8 give legal advice to the Department on such civil, criminal and revenue matters pertaining to direct taxes and such matters arising in the course of administration of the Department as are referred to him by the Department including :

a) examination and settling of drafts of legal nature,
b) examination of trust deeds and draft rules of provident funds for recognition , and
c) drafting of applications, petitions etc. to be filed in Courts of law and other statutory bodies;

7.9 send the case file and related papers to the PCIT/CIT concerned after the judgement/order in the case is passed but before submission of the final bill fur professional services.
7.10 perform such other duties of legal nature, which may be assigned to him by the Department.
7.11 A monthly report shall be submitted by the Counsels as prescribed in the Proforma

B.  Specific duties of Jr. Standing Counsel and related matters

7.12 The duties  of    Standing  Counsel   specifically   include  rendering  meaningful  assistance  to  Sr. Standing Counsel in

(a) Drafting memo of appeal and consulting assessment records etc., if required.
(b) Removal of defects I office objections in the cases filed by the Department
(c) Research for preparation of cases for representation.
(d) Assist the Counsel in preparation and submission of the Monthly report.

C.  Non- compliance/ non- adherence to the duties and responsibilities by the Standing Counsels

The CCIT may take appropriate action against the erring counsels in case of non-compliance and non­ adherence by the Counsels.

8.   Assistance to Standing Counsels by the Department
The CCIT has to ensure that the Judgment  Database of the NJRS is made available to all Standing Counsels. The jurisdictional PCsIT/PDsIT/CsIT/DsIT shall provide all assistance to the Standing counsels such as providing briefs, assessment records, etc. in preparation of a case. In particular, copy of appeal scrutiny report in respect of the impugned order of the ITAT and copy of paper book filed by the assessee before ITAT shall be provided to the counsel for assistance in drafting memo of appeal and preparation of case for representation. The PCsIT/CsiT/PDsIT/DsIT shall respond to communication from the standing counsels promptly and have regular interaction with them in order to keep a close watch on progress of the cases in the Court. The PCsIT/CsIT/PDsIT/DsIT shall, while reviewing the quarterly performance of Counsels, look into the issues, if any, raised by the counsels and ensure their appropriate resolution.

9.  Right to private practice

9.1 The Counsel will have the right of private practice, which should not, however, interfere with the efficient discharge of his duties as counsel of the Department but he shall not advise, hold briefs or appear against the Department before any authority, ITAT or Court in matters under the statutes relating to direct taxes.

9.2 If the Counsel happens to be a partner of a firm of lawyers or solicitors, it will be incumbent upon the firm not to take up any case against the Department in the High Court concerned or before any authority/ITAT falling within the jurisdiction of the said High Court or any case against the department in other courts arising out of the matters falling within the jurisdiction of the said High Court.

Note: CCIT referred to in this annexure will mean Chief Commissioner of Income Tax in charge of Judicial work in the Pr. CCIT region.

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