INCOME TAX
INSTRUCTION NO. 1986/2000
Dated: July 3, 2000
Subject: Revision of schedule of fees payable to Standing Counsels for the Income-tax Department before various High Courts-Appointment of Counsels Guidelines regarding.
Reference is invited to Board's letter No. 278A/24/87-ITJ dated 3rd February, 1989 through which uniform rates of fees were prescribed for Standing Counsels of the Department appearing before various High Courts.
2. The President is pleased to sanction revised rates of fees and allowance along with terms and condition payable to the Senior Standing Counsels/Standing Counsels and Junior Standing Counsels of the Department, which is annexed. The revised schedule will come into effect from 1.6.2000.
3. For the benefit of the field formations, revised guidelines regarding appointment of the Counsels and renewal of their terms are also enclosed.
4. This issues with the concurrence of Ministry of Law and Justice vide their Disp. No. 1378/2000/Judicial dated 5.4.2000 and may be brought to the notice of all the officers in your region.
F. No. 278/6/95-ITJ
(ANURADHA GOYAL)
Deputy Secretary
Central Board of Direct Taxes
ANNEXURE-1
APPOINTMENT AND RENEWAL OF TERMS OF ENGAGEMENT OF STANDING COUNSEL
1.1 Appointment of counsels
The Standing Counsels are engaged at different High Courts to represent the Department in cases relating to direct taxes. For the purpose of appointment, the Chief Commissioner of income tax should send names of the advocates along with their bio-data, experience in dealing with direct tax matters, his/her consent to the terns of engagement to the Board for making the necessary appointment. The terms and conditions of engagement should be in accordance with the revised terms and conditions applicable to them w.e.f. 1.6.2000. Since large revenues arc, at stake, it is very important and necessary that the best Counsels, who are considered suitable from the Department's point of view, are engaged. The first appointment of Counsels should normally be made for a period of three years. Earlier requirement as outlined in instruction 1.6.2000 seeking the recommendation of the Chief justice is hereby dispensed with.
1.2 Fees and allowances
The fees and allowances for senior Standing Counsels/ Standing Counsels are given in Annexure-II. Retainership is paid to the senior Standing Counsel only. The fees payable to Junior Standing Counsel are 1/3rd of the fees payable to senior Standing Counsel in respect of the work done by the that particular Junior Standing Counsel.
1.3 Renewal of appointment
Fresh proposals for engagement of Standing Counsels or continued engagement of the existing Counsels should be submitted to the Board at least 3 months before the expiry of the existing term. The renewal of a term of a Counsel can be made for a period of three years it his performance is suitable. Before making recommendation for renewal appointment of the Counsel, the Chief Commissioner should necessarily make an evaluation of the performance of the Counsel during the preceding term (normally three years) forward it to the Board along with the proposal.
1.4 Performance Appraisal
The performance of the Counsels should be evaluated every year as per The Proforma prescribed vide Instruction NC) 1780 dated 4th Nov., 87. The performance appraisal should, however be sent to the Board by the, Chief Commissioner only at the time of making recommendation for renewal of appointment of Counsels.
1.5 Allocation of cases to Counsel
The Chief Commissioner of Income-tax will be overall in charge of entire litigation work on behalf of the Income-tax Department in his region before the concerned High Court. In respect of cases assigned in DG (Inv.)'s region, the DG concerned will be the incharge. Allocation of cases to the Counsel may be made by the Chief Commissioner/Director General or by a Commissioner/Director authorised by them or by the senior Standing Counsel, if so authorised.
1.6 Period of appointment/renewal
The term of appointment/empanelment of the Counsel would be for a period of three years in the first instance, which may be extended for a further period not exceeding three years at a time, at the discretion of the Government of India.
The appointment/empanelment of the Counsel would be terminable on one month's notice in writing by either side without assigning any reason.
1.7 Duties of Counsel
The Counsel shall:
(i) appear in the High Court in the cases assigned to him and also appear, if so required on behalf of the Department, before the Supreme Court, other High Courts, Tribunals, Settlement Commission, Commissioner of Income Tax (Appeals) and other statutory bodies;
(ii) 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 officers of 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.
(iii) when any case attended to by him is decided against the Department, give his opinion regarding the advisability of filling an appeal from such a decision;
(iv) render all assistance to the Law Officers, Advocate General of the State government, Special or Senior Counsel, if required to do so who may be engaged in a particular case before the High Courts, Tribunal, etc.;
(v) keep the Department informed of the important developments in the case from time to time particularly with regard to drafting, filing of papers, dates of hearing of the case, supplying copies of judgement etc.;
(vi) furnishing to the Department periodical statements and reports/returns which may be called for from time to time, and
(vii) perform such other duties of legal nature, which may be assigned to him by the Income Tax Department.
1.8 Right to private practice
The Counsel will have the right of private practice, which should not however, interfere with the efficient discharge of work of the Department but he shall not advise, hold briefs or appear against the Department before any authority, tribunal or court in matters under the statutes relating to direct taxes.
If the Counsel happens to be a partner of the firm of lawyers or solicitors, it will be incumbent on the firm. not to take up any case against the Department in the same High Court, before any authority, tribunal or any case arising in other courts out of those cases e.g. appeals and revision in the High Court or the Supreme Court.
1.9 Discontinuation of practice of appointment of solicitor
To bring uniformity, the practice of appointing the Solicitor is hereby discontinued. The term of any solicitor shall not be renewed after the present term expires. The field officers should be encouraged to interact with Standing Counsels who actually defend the cases of the Department before the High Court.
(ANURADHA GOYAL)
Deputy Secretary
Central Board of Direct Taxes
ANNEXURE-II
SCHEDULE OF FEES AND ALLOWANCES
The fees payable to the Standing Counsel would be as follows subject to general guidelines:
1. For appearance (on disposal) in the High Court
|
Appeals us/260A of the
Income Tax Act |
Rs.2,250/ |
However, if there are more than three substantial hearings, an additional fees of Rs.450/- per every additional substantial hearing (not exceeding three in number) may be paid as refresher fees.
|
2. Certificate of fitness |
Rs.750/- for each application. |
|
3. For Civil Miscellaneous application |
Rs.750/- per case |
|
4. For Civil or Criminal revision petition |
Rs.1,050/- per case. |
|
5. For drafting pleadings,
written statements in suits, counter affidavits/returns/answers to the writ
petition, grounds of appeal, etc. |
Rs.750/- per pleading |
If substantially identical affidavits, written statements etc. are drafted in connected cases, only one drafting tee will be payable in the main case and no separate drafting fee will be payable in connected cases.
6. Written option
|
Other than what is referred in Para 1.7(iii) of Annexure I |
Rs.450/- per case |
7. Retainership
The senior Standing Counsel will be entitle to a retainership of Rs.3,000/- per month which will include charges for staff, office rent, postage and all other establishment charges. The other Standing Counsels will not be entitled to any retainership.
8. Clerkage
Clearkage at the rate of 10% of the hearing fee subject to a maximum of Rs. 1,800/- in a case or batch of cases before the High Court.
9. Out of pocket expense
The amount required for court fees at the time of filing a case and other miscellaneous expenses should be paid to the Counsel in advance by the Chief Commissioner. An account of the expenses incurred should be rendered to the Chief Commissioner while presenting the final bill.
10. Perquisite
The Standing Counsel will be allowed the facilities of telephone for conducting the case on behalf of the Department. The Standing Counsel should submit details of the calls made along with dates, duration etc. and indicate the details of the relevant case. The reimbursement of telephone expenditure shall be made by the Chief Commissioner after satisfying that the calls have been made in connection with Departmental litigation matters only.
11. For appearance before any other Courts, ITAT, other Tribunals/statutory bodies, etc.:
(a) at headquarters: 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 Office or for appearance in any court/Tribunal/Statutory Bodies etc. outside the headquarters, he will be entitled to a daily fee of Rs.1,800/- 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.
(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 will be paid and from the airport/railway station to the place of his stay out of headquarters and vice-versa at the rates admissible to Class I officers of the Central Government. He will also be paid a lump-sum amount of Rs.300/- 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.600/- per day
12.1 General
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.
12.2 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.
12.3 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.
12.4 Appeals, revision or petitions arising from one common judgement or order will be considered together as one case if they are heard together.
12.5 Uncontested matters
In uncontested cases, the fee shall be 1/3rd of the fees 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. A case shall be regarded as contested when a decision is given after hearing arguments on both sides. The case shall also be deemed to be uncontested if the court decides that the case is a covered one. For example if the court follows its own judgement or judgement of the Supreme Court, the case is considered to be a covered one. In case of any dispute, the Chief Commissioner/Director General/Commissioner/Director shall decide whether the case is uncontested or not.
12.6 No fees for adjournment
No fee will be payable to the Counsel if an advance notice about the adjournment has been issued or the case has been adjourned at his request due to the reasons personal to him.
12.7 Late submission of certified copies of the judgement
30% of the fees payable to the Counsel shall be deducted if the Certified copy of the judgement is not handed over to the Commissioner/Director of the Income tax within fifteen days (excluding the time taken by the Court) from the date of judgement.
12.8 Where there are two or more cases (but not more than 10 cases) involving substantially identical questions of law or facts, one such case will be treated as the main case and the others as connected cases. The fees in such cases will be regulated as provided in succeeding paras, irrespective of the fact whether or not such cases are heard together.
12.8.1 When the Counsel files separate and materially different affidavits, applications or grounds of appeal etc. in more than one case but the argument is heard in the, main case and the other cases are decided accordingly, the Counsel shall be paid the full fees in the main case and Rs. 100/- for each of the connected cases.
12.8.2 When the main case has been heard as in para 12.8.1, but in the connected cases either affidavit or grounds of appeal or petition similar to the one in the main case has been drafted, the Counsel shall be paid the full fees in the main case and Rs.75/- only in each of the connected cases.
12.8.3 When Substantially different affidavits are drafted in connected but uncontested cases, the Counsel shall get 1/3rd fees in the main case and Rs.150/- in each of the connected cases.
12.8.4 When the Counsel has drafted the affidavit, petition or ground of appeal in the main uncontested case and has not drafted them in the connected but uncontested cases or the drafts in the connected but uncontested cases are substantially similar to the one in the main case, the Counsel shall get 1/3rd fees in the main case' and Rs.75/- in each of the connected cases.
12.9 The fees to the Counsel will be paid on presentation of a stamped receipt, and on submission of a copy of the document drafted, if it is a drafting fee and submission of minutes or gist of proceedings, or a copy of order/judgement where it is necessary in case the claim is for appearance fee. The Counsel shall submit his bills within three months from the date on which the fees have accrued.
12.10 The fees will be payable in two stages, 1/3rd fees after substantial work has been carried out and the remaining 2/3rd fees after the case has been decided. If the high court decides that no question of law is involved only 1/3rd of the fees shall be payable to the Counsel.
12.11 Where during the pendency of a proceeding, there is a change of Counsel, a fee commensurate to the work carried out by the outgoing Counsel, not exceeding 1/3rd of the total fee admissible for the case, may be paid to him. In such an event, only the balance of fee payable in the case will be paid to the new Counsel after completion of the case.
12.12 When the Counsel does not argue the case himself but only assists the Law Officer or any other special Counsel, he will be entitled to the same fee as is payable to him as it the case has been argued by him,
12.13 No fee will be admissible for preparation of cases but the Government may consider payment of separate fee for preparation in special cases involving arduous work.
12.14 When cases argued before a single judge are referred to a division bench or to a full bench, separate fee at the prescribed rates will be paid for appearance before each bench.
13. The various terms used in these guidelines will have the following meaning:
13.1 Effective hearing
An 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 judgement is delivered by the Court, it would not constitute an effective hearing.
13.2 Uncontested case
Cases shall be deemed to be uncontested if these are withdrawn by the plaintiff/appellant or are dismissed inlimine or are otherwise decided by the Court ex-parte. Covered cases shall also be deemed to be uncontested cases.
13.3 Covered cases
Where an identical issue stands decided by the same High Court or by the Supreme Court and the judgement in the relevant case is squarely based on such earlier decision of the same High Court or by the Supreme Court, the case shall be deemed to be a covered case.
13.4 Substantial work
Hearing of applications u/s 256(2) and admission matters u/s 260A(3) of the Income tax Act shall be treated as substantial work. Where a case has been admitted by the court after hearing of preliminary objections or filing of affidavits/counter affidavits etc. by the Counsel, substantial work will be deemed to have been carried out.
(ANURADHA GOYAL)
Deputy Secretary
Central Board of Direct Taxes