1326. Authorised representatives - Discontinuance of practice followed by Appellate Tribunal of permitting power of attorney/vakalatnama/general power of attorney filed in favour of firm or legal body
Section 288(1) permits an assessee to attend by an authorised representative. As per section 288(2) an authorised representative must possess one of the qualifications set out in clauses (i) to (vii) thereof. The qualification set out therein can be possessed by an individual only and not by a firm or any legal body. An authorised representative can, therefore, be only an individual and not a firm or legal body. Two or more individuals qualified to be authorised representatives under section 288 can file a joint power of attorney or vakalatnama. The practice of filing power of attorney/vakalatnama/general power of attorney in favour of a firm or a legal 1[the President, Income-tax Appellate Tribunal, has decided that proper authority in favour of the individual or a joint authority in favour of two or more individuals only should be filed before the Tribunal].
Notification: No. F. 161-Ad(AT)/70, dated 30-12-1971.
In partial modification of the instructions in this office previous note of even number, dated 30-12-1971, the President, Income-tax Appellate Tribunal, has decided that it will also be sufficient if, while filing the power of attorney in favour of a firm in a case, the constitution of the firm is also intimated to the Tribunal when its power of attorney is filed.
Notification : No. F. 161-Ad(AT)/70, dated 8-5-1973.
In view of the limitations placed by section 288 on appearance before the income-tax authorities, only persons entitled to appear for an assessee under that section should be allowed to appear before the Income-tax Officers/Appellate Assistant Commissioners of Income-tax or other income-tax authorities on behalf of an assessee. However, persons who are not authorised to appear under section 288 may be permitted to produce books of account or documents but any explanation of the accounts or documents, should, however, be given by the assessee himself or by a person who is entitled to appear on behalf of an assessee under section 288. There is also no objection to any person who is not authorised under section 288 acting as a messenger for the delivery of letters, etc. The Income-tax Officers should not as a rule give audiance to persons who are not entitled to appear under section 288.
Circular : No. 19-D(XL-62) of 1964, dated 3-7-1964.
A question has been raised whether a person, who is qualified under section 61 of the 1922 Act, but not qualified under section 288 of the 1961 Act, e.g., an Income-tax Officer who after serving three years in the Income-tax Department resigned after April 1, 1962 and in whose case two years have not elapsed since the date of resignation, a graduate in Economics who was not practising before April 1, 1962, etc., can appear before an income-tax authority in the course of proceedings under the repealed Act. The Board are advised that though such a person cannot act as an authorised representative in respect of the proceedings under the 1961 Act, there is no bar to his acting as an authorised representative in respect of proceedings under the repealed Act.
Circular: No. 18-D(XL-61), dated 3-7-1964.
With reference to the letter from the Editor-in-Chief, “Taxation” No. E989/104, dated 16-1-1963, the replies to the various queries made by him are as follows :
1. A brother-in-law or father-in-law of an assessee can appear as authorised representative under section 288(2)(i).
2. A person who works part-time as an accountant for any assessee regularly will be one who is “regularly employed” within the meaning of section 288(2)(i).
3. An employee, who merely holds a power of attorney to represent his employer at every stage in the income-tax or sales tax or any court case, will not be considered as a person “regularly employed” within the meaning of section 288(2)(i). However, if he is qualified to represent an assessee otherwise than as an employee under section 288, he may appear on the basis of a power of attorney executed by a number of assessees.
Letter : F. No. 21/4/63-IT, dated 14-6-1963.
1. In the Board’s Circular No. 12 [R. Dis. No. 58(9)-IT/38], dated 7-6-1939 [printed here as Clarification 2], it is laid down that there is no substantial difference between a vakalatnama or mukhtarnama and authorisation envisaged in section 61 of the 1922 Act, and that being so, if the authorisation happens to be in favour of a lawyer it would be a vakalatnama and chargeable as such with court fees under article 10 of Schedule II to the Court Fees Act, 1870. If the authorisation is in favour of any person other than a lawyer, it would fall within the definition of power-of-attorney and would be as such chargeable with appropriate stamp duty. The following further instructions should be followed in the matter :
1. General authorisation - The question whether a vakalatnama or power of attorney filed in income-tax proceedings before the Income-tax Officer is available also in further proceedings in the same case before income-tax authorities would depend in each case upon the terms of the authorisation itself. If the authorisation expressly covers not only proceedings before the Income-tax Officers but also any further proceedings that may arise in the same case (including appeals, revision, or refunds), no vakalatnama or power of attorney should be demanded in respect of any of the further proceedings in the same case. In other words, all the proceedings in respect of one and the same case constitute one transaction and one power of attorney may be executed in respect of all the proceedings in that case. The stamp duty payable in respect of such an authorisation will be that mentioned in article 48(c) of Schedule I to the Indian Stamp Act, 1899. Similarly, a general power of attorney in respect of all the income-tax cases of the same assessee over specified number of years may be executed in favour of a named representative. A higher stamp fee will, however, be payable in respect of such general power of attorney under article 48(d).
2. Partners of a firm - Partners of a firm who are being assessed in their individual capacities cannot execute a joint power of attorney because they have no common interest in the separate proceedings in respect of each partner. The Explanation to article 48 of Schedule I to the Indian Stamp Act, 1899 does not apply to such a case because the power of attorney is not executed by each of the assessees in his capacity as partner of a firm but in his individual capacity. The Explanation will apply if the firm as such authorises a person or another firm to represent it in proceedings in which the first named firm figures as an assessee.
3. Banks - There is no distinction between a bank applying for refund on behalf of its customers and of a firm of accountants so applying on behalf of its clients. In either case a power of attorney will be necessary if the claim for refund necessitates the bank acting for the customer. But in a case where a refund is clearly due and payable to a person, the mere authorisation of a bank to collect the amount due will not amount to a power of attorney.
4. Adhesive stamps - In the case of instruments chargeable with stamp duty, the use of adhesive stamps is permissible only in the case of instruments specified in section 11 of the Stamp Act and a power of attorney not being one of them, the use of adhesive stamps in respect thereof is not permissible. If “impressed stamps” are not available in any particular place, assessees should make representation to the Provincial (State) Government.
2. In any case of doubt it is open to the income-tax authorities to obtain a binding decision from the Collector of Stamps by impounding document under section 33 of the Stamp Act and forwarding the same to the Collector under section 38(2) for his determination under section 40 of the Act. In the alternative, the executant of the authorisation may be asked to obtain adjudication by the Collector under section 31. It is also open to the executant to move the Chief Controlling Revenue Authority [defined in clause (10) of section 3 of the General Clauses Act] to have the question referred to the High Court under section 57 of the Indian Stamp Act.
3. A misapprehension seems to exist in certain quarters that the income-tax authorities demand stamp duty on the letter of authorisation in pursuance of the provisions of the 1922 Act. That is not the case and it does not rest with them to determine whether stamp duty is leviable on any particular documents. the Indian Stamp Act, 1899 contains definite provisions for the purpose and the income-tax authorities are merely insisting on compliance with the requirements of that Act. Further, stamp duty on power of attorney not being one of the stamp duties or fees mentioned in entries 57 and 59 of the Federal Legislative List, the Central Government is not competent to remit such duty nor is the Central Legislature competent to reduce the rate of such duty. If, therefore, any assessee wants the duty on power of attorney to be remitted by executive order or reduced by legislation, he should approach the Provincial (State) Government in the matter.
Circular: No. 28 [C. No. 589-IT/38], dated 22-8-1939.
1. The person authorised by an assessee in writing to attend on his behalf before any income-tax authority in connection with any proceedings under the Indian Income-tax Act becomes the agent of the assessee for the purposes of those proceedings. Statements made and explanations given by the person so authorised attending on behalf of an assessee in the course of assessment proceeds are clearly binding on the assessee, even if the instrument authorising such person to attend does not expressly say so. There is no substantial difference between a vakalatnama or mukhtarnama and the authorisation envisaged in section 61, and that being so, if the authorisation happens to be in favour of a lawyer it would be vakaltnama and chargeable as such with court fees under article 10 of Schedule II to the Court Fees Act, 1870, and would, therefore, be excluded from the definition of a power of attorney by virtue of the words included within brackets in that definition. If it is in favour of any person other than a lawyer, it would fall within that definition and would as such be chargeable with appropriate stamp duty.
2. The above instructions supersede those contained in paragraph 142(iii), page 324 of the Income-tax Manual (7th Edition). It should be noted that they apply to persons authorised to act for the assessee. They are not to be read as preventing an Income-tax Officer from allowing a representative to appear without acting for the assessee, e.g., to produce documents, to produce or explain accounts, etc.
Circular: No. 12 [R. Dis. No. 58(9)-IT/38], dated 7-6-1939.
1331. Whether term “any Indian university incorporated by any law for the time being in force” applies to universities of Part B States - Rule 46 of the 1922 Rules corresponding to rule 51 of the 1962 Rules
1. The question has been raised whether the term “any Indian university incorporated by any law for the time being in force” applies to the universities of Part B States. These universities are as below :
1. The Osmania University,
2. The Mysore University,
3. The Travancore University,
4. The University of Rajputana,
5. The Jammu and Kashmir University.
2. The Osmania University was incorporated by a Charter of the Nizam, while the universities of Mysore, Travancore, Rajputana and Jammu and Kashmir were incorporated by Acts of Legislature of former Indian States. The Charter and these Acts are continued in force by virtue of article 372(1) of the Constitution and all the five universities must now be deemed to be “universities incorporated by any law for the time being in force”.
Circular: No. 2 [C. No. 21(25)-IT/50], dated 23-2-1951.