Since the landmark judgment of Hon’ble Supreme Court declaring the National Tax Tribunal (NTT) as unconstitutional in September, 2014, the peril of loosing right of appearance before income tax authorities is lurking over chartered accountants enjoying such privilege by virtue of the provisions of section 288(2)(iv) of the Income Tax Act, 1961.
In the said judgment delivered in the case of
Madras Bar Association vs Union of India
, the Supreme Court had the occasion to observe as under:
Earlier, the Apex Court in the year 2012, in the case of Bar Council of India vs. A. K. Balaji had clarified the expression, “to practice the profession of law” under the provisions of the Advocates Act, 1961. Since then adverse inferences were drawn with respect to the appearance of chartered accountants before income tax authorities.
Amidst these judgments, a letter dated 08-09/09/2015 written by Chief Commissioner of Income Tax, Amritsar has come into circulation which is addressed to CIT Amritsar, Bhatinda/Jammu, which suggest that Pr. Chief Commissioner of Income Tax, Chandigarh has invited comments from CITs on the subject of,
“Only enrolled Advocates are licensed to practice law in India and not to allow Chartered Accountants/Non-Advocates for practice of law in the course of proceedings before revenue authorities coming under the supervision and control of your good office”
The said letter however does not mention the reason for such an exercise started by PrCIT, Chandigarh, but it is notable that from time to time various association of advocates are representing the issue before the tax authorities and this exercise could be out of any such representation. It is also a fact that tax authorities are bound by the provisions of the Income Tax Act, 1961 and lack powers to override section 288. In view of the above, unless the matter is decided by a competent court, such exercise of PrCIT, Chadigarh for the time being is not likely to achieve anything.
Interestingly, in the month of August, 2014, a similar issue came up before Allahabad High Court in the case of Tax Lawyer Association vs State of UP & Others wherein a petition was filed to restrain chartered accountants/other professionals from appearing before Trade Tax Authorities. The Court however held in favour of chartered accountants.
The petitioner in the above case relied
on the section 33 of the Advocates' Act 1961 which reads as under:
However, the High Court in its interim order observed as under,
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