The Bar Council of India (BCI) in New Delhi, the statutory body governing the legal education and profession in the country, has urged the Centre to permit legal professionals alone to practise in matters relating to Income-Tax law involving amount below Rs 60 lakh.
The BCI has sent a communication dated September 11 urging the Central Board of Direct Taxes (CBDT) in New Delhi and the Income-Tax Appellate Tribunal (ITAT) in Bangalore to delete certain words from sec 33 of the Advocates Act, which went against the lawyers community and allowed the auditors and chartered accountants (CAs) to practise in IT law. The appeal followed a report from S Prabakaran and Rameshchandra G Shah, members of the BCI, who have been assigned the task of examining the Advocates Act and Income-Tax Act.
The BCI, at its meeting held on July 28 last, considered the report of Prabakaran and Shah and accepted it. In turn, it urged the CBDT and the ITAT to delete persons other than legal practitioners from practising in IT matters involving below `60 lakh under Sec 288 (2) of the Income Tax Act.
Originally, under sec 44AB of IT Act, persons carrying on business having turn over exceeding Rs 60 lakh per year have to submit Tax Audit Report in Form 3CD duly signed only by CAs. The Act was redefined, and sec 44AD added to it in April, 2011, which included all business class assessees having a turn over `60 lakh and below within the ambit of tax audit. In view of the redefined clause, assessees approaching the CAs can declare less income and pay less tax. If they approach a legal professional, they have to declare fixed percentage of income and pay more tax, because of no authority to attach such Tax Audit Report. Then, nobody will approach the legal professionals and they will be indirectly threatened to extinction from income tax practice. This will amount to virtual withdrawal of the right conferred on legal professionals under Sec 288(2)(iii) of IT Act.
‘‘Hence we are of the opinion that when the legal practitioners are the only class of persons entitled to practise IT law under sec 29 of the Advocates Act, there is no justification for prohibiting them to issue certificates or reports under IT Act,’’ the BCI said.
Prabakaran, also Co-Chairman of BCI, told Express that the demand is well supported by the decision of the SC in the BCI Vs AK Balaji case, in 2012. ‘‘In these modern days, accounts are maintained in computers and the question of checking the correctness of total does not arise. The CAs and auditors are trained in accounts only and not in the interpretation of tax law and procedures, civil procedure code and the impact of furnishing affidavits and sworn statements in the course of IT proceedings,’’ he added.