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BCI wants to redeem tax practice from CAs for advocates

The Bar Council of India (BCI) wants chartered accountants and auditors banned from advising on income tax matters of values below Rs 60 lakh, therefore leaving the domain exclusively to advocates, reported the New Indian Express.

The regulator has sent a communication dated 11 September to the Central Board of Direct Taxes (CBDT) in Delhi and the Income Tax Appellate Tribunal (ITAT) in Bangalore to delete clauses in Section 288(2) of the Income Tax Act 1995 that allow persons other than advocates from advising on tax matters, if the value of the matter is below Rs 60 lakh.

The BCI was acting on the report of its members S Prabakaran and Rameshchandra G Shah, which was considered at its 28 July meeting.

According to the report:

“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.”

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