Plea challenges commercial property tax on lawyers' offices; HC seeks MCDs' stand

The court also asked DHCBA to advise its members to file tax returns for their residential properties.

Published: 07th October 2020 02:11 PM  |   Last Updated: 07th October 2020 02:11 PM   |  A+A-

Tax, Fraud, Property Tax, Income tax

Image for representational purpose


NEW DELHI: The Delhi High Court Wednesday sought response of the three municipal corporations here on a plea by a lawyers' association challenging commercial property tax on advocates' offices.

A bench of Chief Justice D N Patel and Justice Prateek Jalan issued notice to the three local bodies -- South Delhi Municipal Corporation, East Delhi Municipal Corporation and North Delhi Municipal Corporation -- seeking their stand on the petition by the Delhi High Court Bar Association (DHCBA).

The court also asked DHCBA to advise its members to file tax returns for their residential properties.

The petition has challenged the municipal authorities' decision to treat the use of premises by an advocate as 'commercial activity' and impose taxes accordingly.

The plea, filed by DHCBA through its President Mohit Mathur and Secretary Abhijat, has challenged an assessment order passed by SDMC in November 2018 and any other notice issued thereafter by the three MCDs for self assessment of property tax returns of lawyers offices under provisions of the Delhi Municipal Corporation (DMC) Act.

It has said that under the DMC Act, 'use factor' system was introduced in the new method of assessment of property tax and for advocates, there is no specific category but they are being charged on the basis of methods applicable on commercial properties which attract the highest tax.

"All the professionals form one class but the legal profession has been treated as part of commercial activity, which is illegal, arbitrary and contrary to the law laid down by this court," the plea has said, adding that the office of legal professionals should be 'use factor' 1 which is for residential and public purpose.

It has also said that the Bar Council of Delhi sent a representation to the municipal corporations on July 21 for reduction of the 'use factor' 4 to 1 for levy of property tax in respect of offices of advocates in Delhi.

 'Use factor' 4 is for business buildings which attracts the highest tax.

"Lawyers appear before the court to represent their clients but in effect assist the court to dispense justice and this cannot be a business or any commercial activity," the plea, filed through advocate Nikhil Mehta, has said.

As an interim relief, the plea has sought to stay the operation of november 2018 notice issued by the authorities for self assessment property tax return of the lawyers office.


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