Guidelines for engagement of Standing Counsels to represent the Income-tax Department before High Courts and other judicial forums

 Guidelines for engagement of Standing Counsels to represent the Income-tax Department before High Courts and other judicial forums

INSTRUCTION NO. 3/2012, [F. NO. 279/MISC./M-75/2011-ITJ]

DATED 11-4-2012

With a view to improve the quality of representation and to streamline the process of engagement of Standing Counsels for the Department to represent before various High Courts and other judicial forums and in supersession of the existing Instructions of the Board on the subject in general, and Board's letter in F. No. 20/20/67-ITJ (1) dated 08.01.1968, Board's letter in F. No. 20/20/67-ITJ (4) dated 11.01.1968, Board's letter in F. No. 20/20/67-ITJ (13) dated 07.03.1968, Instruction No. 1/273 dated 03.03.1971, Instruction No. 1828 dated 13.09.1989, Instruction No. 1806 dated 03.02.1989/Instruction No. 1986 dated 03.07.2000 and Instruction No. 8 of 2007 dated 30.08.2007, in particular, the following Instructions are issued herewith for compliance by all concerned:

2. Procedure for engagement:

The procedure for engagement of Standing Counsels, renewal of their terms and requisite qualifications and terms and conditions of their engagement shall be as per guidelines at Annexure-I.

3. Schedule of fees, allowances and terms of payment:

The Standing Counsels will be engaged in accordance with the revised schedule of fees and related terms and conditions applicable to them as given in Annexure-II.

4. These guidelines and the revised Schedule of the fee and allowances shall come into effect from 11-04-2012.

5. The Standing Counsels will be paid fee at the old rates in respect of their appearance and other work done by them prior to 11-04-2012 and at the revised rates in respect of the work done by them on or after 11-04-2012. However, the revised retainer fee shall be applicable only in respect of the engagement of Standing Counsels done based upon proposals received from the Counsels in accordance with the terms and conditions laid down in this Instruction.

6. This issues with the concurrence of Ministry of Law and Justice vide their FTS No. 870/Jud.Sec/2012 and the Department of Expenditure I.D. No. 9(4)/2012-E-II(B) dated 10-04-2012.

ANNEXURE-I

PROCEDURE FOR ENGAGEMENT OF STANDING COUNSELS

1. Category of Standing Counsels

The Standing Counsels engaged/to be engaged by the department will fall into the following two categories:

(a)  Senior Standing Counsel

(b)  Junior Standing Counsel

In a station where counsels do not have sufficient experience to be engaged as Senior Standing Counsel, the CCIT may designate a Junior Standing Counsel to perform the functions of Senior Standing Counsel for that station. The Standing Counsel so designated shall perform the function of arguing cases before the Hon'ble High Court/ITAT in the absence of a Senior Standing Counsel.

2. Eligibility Conditions for engagement as Standing Counsel

The eligibility conditions for each category of counsels shall be as under:

2.1. Senior Standing Counsel: In order to be eligible for engagement as Senior Standing Counsel, a person should

(a)  be eligible to appear before the High Court as an advocate and

(b)  have a minimum experience of five years of handling direct tax matters before High Courts or ITAT as an advocate.

OR

have been a Junior Standing Counsel of the Department for three years

OR

have been an officer of the Income-tax Department who is eligible to appear before the High Court as an advocate and has retired/resigned from the post of Commissioner/Director of Income-tax or above or who has been a member of ITAT, provided that he has not been removed/dismissed or compulsorily retired from service on account of disciplinary action and no disciplinary proceeding under service rules or pension rules is pending against him.

2.2. Junior Standing Counsel: In order to be eligible for engagement as Junior Standing Counsel a person should

(a)  be eligible to appear before the High Court as an advocate and

(b)  have a minimum experience of three years of handling preferably direct tax matters before High Courts or ITAT.

OR

have been an officer of the Income-tax Department who retired/resigned from the post of Additional/Joint CIT or below and is eligible to appear before the High Court as an advocate, provided that he has not been removed/dismissed or compulsorily retired from service on account of disciplinary action and no disciplinary proceeding under service rules or pension rules is pending against him.

3. Procedure for engagement of Standing Counsels

3.1 For the purpose of engagement, the CCIT will call for applications in proforma-A1 & A2 (as applicable), either by advertisement in local newspapers, or from Bar Association of High Court or otherwise. It should, however, be ensured that the process of engagement is transparent and broad based.

3.2 A Screening Committee headed by the CCIT shall be formed for the purpose of evaluation of proposals received. While considering the applications for Jr. Standing Counsels the screening committee should invariably co-opt at least one of the Sr. Standing Counsel. Particulars of the applicants' expertise in handling direct tax matters, aptitude for interpretation and their suitability to represent the cases of the department will be examined by the committee and an evaluation report along with recommendation of the CCIT will be sent to the Board in pro forma-B.

3.3 Sr. Standing Counsels should preferably be taken from amongst the panel of Jr. Standing Counsels of at least three years standing, subject to favourable assessment by the screening committee. In assessing suitability, the quality of drafting, assistance to the appearing counsels and co-ordination aptitude with the officers of the department should be taken into account.

3.4. The First engagement of each Counsel shall normally be for a period of three years.

4. Performance review

4.1 The performance of the counsels shall be reviewed by the jurisdictional CsIT whose cases have been represented by the Standing Counsel, on a quarterly basis and a report in Pro forma-C shall be submitted to CIT(Judicial)/CCIT before 15th of the month following end of each quarter.

4.2 On the basis of the reports received from the CsIT, the CCIT shall review the performance of the counsels for every financial year and send an annual report to the Board in pro forma-D before 30th June of the following year.

5. Renewal of the term of engagement

5.1 Proposals for renewal of Counsels should be submitted to the Board at least 3 months before the expiry of the existing term. In case the orders of the competent authority for renewal of the term are not received in time, the CCIT may extend the term for a period not exceeding 3 months. The CCIT shall immediately bring to the notice of the Board such a case for appropriate orders.

5.2 The renewal of the term of engagement of a Counsel shall be generally for a period of three years if his performance is found to be satisfactory. Before making recommendation for renewal of the term, the CCIT shall make an evaluation of the performance of the Counsel during the preceding term and forward it to the Board along with the proposal for renewal in pro forma-E.

6. Allocation of cases to Standing Counsels

6.1 The CCIT will be the overall in charge of entire litigation work on behalf of the Income-tax Department in his region before the High Court concerned. In respect of cases pertaining to DGIT(Inv.)'s jurisdiction, the DGIT concerned will be the in-charge. Allocation of cases to the Counsels may be made by the CCIT/DGIT (Inv.) or by a Commissioner/Director authorized by them or by the Senior Standing Counsel, if so authorized.

6.2 The Advocate from the panel of Sr. Standing Counsels alone should be authorized to argue cases unless exigency of a particular station requires relaxation of this condition. The CCIT shall be competent to relax this condition and allow Jr. Standing Counsels to argue cases of the department.

7. Termination of engagement/resignation/expiry of term

The engagement of the Counsel would be terminable through written intimation by either side without assigning any reason. The CCIT is authorized to act on behalf of the department for the purpose. On expiry of the term or termination or resignation, the Standing Counsel shall immediately handover the briefs and other related papers to the CIT concerned or the other Standing Counsels nominated by the CCIT for the purpose and the pending bills of the counsel shall be settled within three months of the end of the term.

8. Duties of the Standing Counsel

A. The Counsel shall

8.1 draft Memorandum of Appeals and related petitions/applications within reasonable time, keeping in view the limitation period;

8.2 file the appeals/other petitions/applications as required, within limitation and communicate the particulars (Diary number, ITA number etc.) to the CIT concerned;

8.3 communicate defects/office objections, if any, in the appeals etc. and take prompt steps to rectify the same with the assistance of the CIT;

8.4 appear on behalf of the department in the High Court/ other judicial forums, as required in the cases assigned to him;

8.5 keep the CIT informed of the important developments in the case from time to time particularly with regard to dates of hearing, conclusion of hearing, date of judgment/order etc.;

8.6 when any case attended to by him is decided against the Department, apply for certified copy of the judgment within two working days of pronouncement and give his opinion regarding the advisability of filing an appeal/SLP against such a decision within three days of taking delivery. He shall send an ordinary copy of the same, as soon as available, to the CIT concerned. In other cases also the same time limits shall be applicable, though opinion will not be required;

8.7 if required, render all assistance to the law officers, Advocate General of the State Government, special or Senior Counsel, who may be engaged in a particular case before the Supreme Court, High Courts, ITAT, etc.;

8.8 give legal advice to the Department on such civil, criminal and revenue matters pertaining to direct taxes and such matters arising in the course of administration of the Department as are referred to him by the Department including:

(a)  examination and settling of drafts of legal nature,

(b)  examination of trust deeds and draft rules of provident funds for recognition, and

(c)  drafting of applications, petitions etc. to be filed in Courts of law and other statutory bodies;

8.9 send the case file and related papers to the CIT concerned after the judgment/order in the case is passed but before submission of the final bill for professional services.

8.10 perform such other duties of legal nature, which may be assigned to him by the Department.

B. Specific duties of Jr. Standing Counsel and related matters

8.11 The duties of Jr. Standing Counsel specifically include rendering meaningful assistance to Sr. Standing Counsel in

(a)  Drafting memo of appeal and consulting assessment records etc., if required.

(b)  Removal of defects / office objections in the cases filed by the department.

(c)  Research for preparation of cases for representation.

8.12 The Sr. Standing Counsels should provide infrastructure facilities to Jr. Standing Counsels such as access to judicial decisions data bank and computers etc. to facilitate effective contribution from them in proper conduct of appeals/cases. However, Jr. Standing Counsels should not be asked merely to attend to clerical work such as filing of appeals or making applications for certified copies etc.

9. Assistance to Standing Counsels by the department

The jurisdictional CsIT/DsIT shall provide all assistance to the Standing counsels such as providing briefs, assessment records, etc. in preparation of a case. In particular, copy of appeal scrutiny report in respect of the impugned order of the ITAT and copy of paper book filed by the assessee before ITAT shall be provided to the counsel for assistance in drafting memo of appeal and preparation of case for representation. The CsIT/DsIT shall respond to communication from the standing counsels promptly and have regular interaction with them in order to keep a close watch on progress of the cases in the Court. The CsIT/DsIT shall, while reviewing the quarterly performance of Counsels, look into the issues, if any, raised by the counsels and ensure their appropriate resolution.

10. Right to private practice

10.1 The Counsel will have the right of private practice, which should not, however, interfere with the efficient discharge of his duties as counsel of the Department but he shall not advise, hold briefs or appear against the Department before any authority, ITAT or Court in matters under the statutes relating to direct taxes.

10.2 If the Counsel happens to be a partner of a firm of lawyers or solicitors, it will be incumbent upon the firm not to take up any case against the Department in the High Court concerned or before any authority/ITAT falling within the jurisdiction of the said High Court or any case against the department in other courts arising out of the matters falling within the jurisdiction of the said High Court.

Note: CCIT referred to in this annexure will mean Chief Commissioner of Income Tax in charge of Judicial work in the CCA region.

Pro forma-'A1' of Annexure I

Particulars to be furnished by an advocate applying for engagement as Jr./Sr. Standing Counsel

 1.  Name of the person

 2.  Permanent Account Number

 3.  Father's Name

 4.  Date of Birth

 5.  Address for correspondence including e-mail, Telephone/Mobile No.

 6.  Permanent address

 7.  Educational Qualification *

 8.  Category of counsel for which applied (Jr. Standing Counsel/Sr. Standing Counsel)

10. Date of enrolment as an advocate in the State Bar Council and Registration No. *

11. If a partner in a firm, name(s) of the firm(s) and other partners

12. Number of cases relating to Direct Taxes dealt with during last 3/5(Jr./Sr.)years as an Advocate*

13. Number of cases published in Journals/Newspapers, etc.

14. Income from Professional Practice (copy of the latest I.T. return to be attached)

Verification

I ............ S/o ............., do hereby declare that whatever has been stated in the above application is true to the best of my knowledge and belief.

Signature

Date:

Place:

*Applicant to submit documentary proof with respect to aforesaid items/information.

Undertaking

I............ S/o.............., do hereby declare that if engaged by the department, I shall fully abide by the terms and conditions of the engagement.

Signature

Date:

Place:

Pro forma 'A2'of Annexure 1

Pro forma for application by an officer who has retired/resigned from the Income-tax Department or has been a member of ITAT

 1.  Name of the person

 2.  Permanent Account Number

 3.  Father's Name

 4.  Date of Birth

 5.  Address for correspondence including e-mail, Telephone/Mobile No.

 6.  Permanent address

 7 .*Educational Qualification

 8.  Date of joining Government Service in Income-tax Department

 9.  Designation and office address of the last post held

10. Date of retirement/resignation from the service

11. * Date of enrolment as an advocate in the State Bar Council and Registration No.

13. If a partner in a firm, name(s) of the firm(s) and other partners

14. Category of counsel for which applied (Jr. Standing Counsel/Sr. Standing Counsel)

Verification

I......... S/o ...................., do hereby declare that whatever has been stated in the above application is true to the best of my knowledge and belief. I further declare that I have not been removed from the service due to any disciplinary proceeding and no disciplinary proceedings under service rules or Pension Rules are pending against me as on date.

Signature

Dated:

Place:

*Applicant to submit documentary proof with respect to aforesaid items/information.

Undertaking

I.................. S/o ..........., do hereby declare that if engaged by the department, I shall fully abide by the terms and conditions of the engagement.

Signature

Date:

Place:

Pro forma-'B' of Annexure I

Particulars/evaluation report of a person applying for engagement as Jr./Sr. Standing Counsel

Chief Commissioner of Income-tax

Pro forma- 'C' of Annexure I

Pro forma report to be sent by jurisdictional CIT to CIT (Judl.)/CCIT for standing counsels in respect of appeals/writs represented by him and disposed of during the quarter ending

Overall Remarks for the quarter (satisfactory/unsatisfactory)

Commissioner of Income-tax

*Remarks on quality of drafting, initiatives taken by the counsel, time devoted in interaction with the assessing officers etc. should be given

Pro forma- 'D' of Annexure I

Annual performance report of the counsel for the Fin. Yr. _____

Chief Commissioner of Income-tax

Pro forma- 'E' of Annexure I

Report on the performance of the Counsel for the period ………to……….. for renewal of the term

PART - I

PART-II

PART-III

Chief Commissioner of Income-tax

Note: The evaluation should be based on performance report in pro forma D for the period covered.

Annexure-II

Schedule of Fees and Allowances and Terms of Payment

The fees and allowances payable to Senior Standing Counsels are given hereunder:

1. For appearance in the High Court (subject to exceptions in paras 9 & 10 below)

2. For Drafting

3. For Conference

*A substantial and effective hearing is one in which either one or both the parties involved in a case are heard by the Court. If the case is mentioned and adjourned or only directions are given or only judgment is delivered by the Court, it would not constitute a substantial and effective hearing.

The Junior Standing Counsel rendering assistance to the Sr. Standing Counsel shall be entitled to 1/3rd of the amount specified against each item of work. The Junior Standing Counsels performing the functions of Senior Standing Counsels as per the orders of CCIT shall be entitled to 1/2 of the amount specified above against each item of work.

4. Retainership

The Standing counsel shall be entitled to a retainer fee at the following rates:

No separate establishment charges including telephone, etc. shall be payable.

5. Clerkage

Clerkage at the rate of 10 per cent of the appearance fee shall be payable to the counsel.

6. Out of pocket expense

The amount required for Court fees at the time of filing a case and other miscellaneous expenses including expenses for obtaining certified copies of judgment/order should be paid to the Counsel in advance by the Chief Commissioner. An account of the expenses incurred shall be rendered by the counsel to the Chief Commissioner while presenting the final bill.

7. For appearance before any other Court, ITAT, other statutory bodies, etc.:

The Standing Counsel shall be entitled for fee etc. as under

(a)  At headquarters (the seat of High Court for which the counsel is engaged): Same as payable for appearance before the High Court.

(b)  Out of headquarters: When the Counsel is required to go out of headquarters in connection with any litigation matter, e.g., for conference with a Senior Counsel, Special Counsel or with the Law Officer or for appearance in any Court/ITAT/Statutory Body, etc., outside the headquarters, he will be entitled to a daily fee of Rs. 5,100 per day for the days of his absence from the headquarters including the days of departure from, intervening holidays and arrival back at the headquarters. However, no fee will be paid for the day of departure if he leaves headquarters after Court hours and for the date of arrival if he arrives at the headquarters before the Court hours. The daily fee will be in addition to the normal appearance fee prescribed at para 1 supra.

(c)  Travel/Hotel expenses: In addition to the daily fee, the Counsel will be entitled to travel expenses for travel by air (economy class) or first class AC by train. Road mileage for the journey from his headquarters to the airport/railway station and vice versa and from the airport/railway station to the place of his stay out of headquarters and vice versa will be paid at the rates admissible to Class I officers of the Central Government having grade pay of Rs. 10,000 in case of Sr. Standing Counsels and Grade pay of Rs. 8,700 in case of Jr. Standing Counsels. He will also be paid a lump sum amount of Rs. 900 as conveyance charges for performing local journey while outside the headquarters. He will also be entitled to actual expenses for stay in hotel, subject to a maximum for Rs. 5,000 per day for Sr. Standing Counsels and Rs. 3,000 per day for Jr. Standing Counsels.

8. Appearance fee in special circumstance

The CCIT may entrust specific duties relating to the Departmental work in the High Court for attending to duties which are not specifically covered in this instruction (such duties to be specified) to any Standing Counsel on the panel. The fees for such specified work, however, shall not exceed Rs. 2,000 per day.

9. Appearance fee in connected/covered cases

9.1 When more than one case involving identical questions/issues are heard together and decided by the High Court, the counsel shall be paid full appearance fee in the main case and Rs. 750 in each of the other connected cases.

9.2 Similarly, in covered cases (where the judgment in the relevant case is squarely based upon earlier decision of the same High Court or of the Supreme Court) the counsel shall be paid only Rs. 750 per case as the appearance fee. However, in case the counsel has argued the relevant case to the effect that the case was not a covered one and such arguments duly find a mention in the judgment, the case will not be considered a covered one and the counsel shall be entitled for full appearance fee.

10. Uncontested matters

A case shall be regarded as uncontested, if the same is withdrawn by the plaintiff/appellant or dismissedin limine or otherwise decided by the court ex parte. In uncontested cases, the fee shall be 1/3rd of the appearance fees as applicable to the stage of the case, otherwise payable, but if such a case is later on restored and decided in contest, the remaining 2/3rd of the fee will be payable.

11. General

11.1 The rates specified above are primarily applicable to income-tax cases but will apply, mutatis mutandis, to cases relating to other direct taxes and any other matters assigned by the department. In all cases effective appearance is necessary for the Counsel to claim fee.

11.2 No fee will be payable in cases where no legal work is required to be done. For example, cases in which the interest of the department is to be watched pending instructions, the cases involving transmission of records to the Supreme Court, inspection of the Court record for ascertaining the position of the case or other information needed etc.

11.3 No fees for adjournment - No fee will be payable to the Counsel if an advance notice about the adjournment has been circulated or the case has been adjourned at his request due to the reasons personal to him.

11.4 If the Counsel appears at the instance of the Union of India or for parties other than the Union of India whose scales of fee are not inconsistent with that of the Union of India, he will be entitled to only one set of fees.

11.5 When the Counsel does not argue the case himself but assists the Law Officer or any other special Counsel, he will be entitled to the same fee as is payable to him as if the case has been argued by him.

11.6 When cases argued before a Single Judge are referred to a Division Bench or to a Full Bench, separate fee at the rates prescribed at para 1 of this Annexure will be paid for appearance before each Bench.

11.7 Late submission of certified copies of the judgment.

11.7.1 20% of the appearance fees would be deducted if the application for certified copy is not made within two working days, excluding the date of pronouncement of the judgment.

11.7.2 Further, 20% of the appearance fees shall be deducted if certified copy of the judgment is not handed over to the jurisdictional Commissioner/Director of Income-tax within three working days of the judgment being ready for delivery. In case where the jurisdictional Commissioner/Director of Income-tax is stationed at a different city/town from the one where the High Court bench is located, the time limit for delivery of certified copy of judgment would be, five working days of the judgment being ready for delivery :

Provided clause 11.7.2 shall not be enforced if the counsel intimates the Commissioner/Director concerned or the officer nominated by him, of the conclusion of hearing giving particulars of appeal and makes available to him an ordinary copy of the judgment as soon as the same is available (but before the date of judgment being ready for delivery) alongwith the copy of receipt of making application for certified copy within period stipulated at 11.7.1 above.

12. Procedure for submission and payment of bills to Standing Counsels

12.1 The Counsel should submit professional bills in proforma 'X' of this annexure by the 10^th of every month:

12.1.1 Bills for drafting should be submitted in the month succeeding the month in which the appeal etc. was filed.

12.1.2 Bills for appearance for admission and regular hearings as referred in para 1 of annexure II should be submitted in the month succeeding the month in which relevant orders/judgments are received.

12.2 Bill claiming retainer fee as referred in para 4 of annexure II should be submitted in the month succeeding the month of retainership.

12.3 Wherever Jr. Standing Counsel has assisted a Sr. Standing Counsel, a combined bill should be submitted by the Counsels.

12.4 The bills shall be scrutinized within 30 days of receipt and deficiency or excess claim if any shall be communicated to the counsel within a week of such scrutiny. The scrutiny of bills should not be kept pending due to non-availability of funds.

12.5 After passage, the Bill should be arranged in seriatim of receipt, for payment.

12.6 The cheque should be sent to the counsel concerned giving particulars of bills covered by the payment.

12.7 In order to resolve any issues pertaining to bills, the CITs should have periodical, preferably quarterly meetings with the counsels.

Proforma-'X' of Annexure II

Bill for claim of professional fees by Standing Counsels (case-wise) to be submitted to the CIT concerned/CIT(J)

PRE-RECEIPTED

* In case Junior Counsel has assisted the Senior Counsel in a case, both the names should be mentioned and combined bill to be submitted.

PART A (Bill for Drafting), as applicable

(Amount in Rs.)

PART B (Bill for appearance etc.), as applicable

(Amount in Rs.)

Certified that the above information is correct and in accordance with the terms of engagement. The above claims have not been made earlier.

For office use only

Total Bill

*The counsel shall be intimated of the deductions made before payment of the bill.

Signature and Name of the D.D.O.