The basic tenets of Profession*
Anil R. Dave Chief Justice, AP High Court
The author lucidly highlights a few basic tenets of the profession which have held the field since the times of Manu Smriti and Chanakya.
My esteemed Brother Justice B. Prakash Rao, Mr. Bharatji Agrawal, Mr. P.V. Subba Rao, Dr. M.V.K. Murthy, V. Narendra Prasad, delegates of the Conference, and distinguished invitees, guests, ladies and gentlemen.
I am very glad to be associated with this National Tax Conference on “Tax Profession, Challenges and Opportunities” organized by All India Federation of Tax Practitioners, South Zone and other Tax Bar Associations connected with this Conference.
I congratulate the organizers for selecting the theme — Tax Profession, Challenges and Opportunitites. In legal profession, in my opinion, the tax practice is a real challenge and it gives ample opportunities to mint money to the professionals.
I say this as a challenge for the reason that one has to be upto date in the subject. Every year, the law is changing. Of course, the society is dynamic and the law is bound to go on changing periodically. But in the case of taxation practice, the law changes very fast every year. Therefore, it is a very good opportunity for all lawyers who are practising on taxation side. With a changed law, in my opinion, normally no assessee will be comfortable with filing his return, He has to approach a tax practitioner and that will be a very good opportunity to a tax practitioner.
I am reminded of Benjamin Franklin who said that in this world, nothing can be said to be certain except death and tax. So even if you have Ram Rajya, where a normal lawyer may not have any practice, there would not be any hesitation to say that taxes would be there and the tax practitioners will go on flourishing as Benjamin Franklin said that in this world, tax is one of the certainties in life.
Franklin Roosevelt has said that taxes are after all the dues to be paid for the privileges of membership in an organized society. We have to pay the taxes because we want to be the members of an organized society. The State functions only when it collects taxes. It becomes necessary for the Head of the organized society, King or Parliament no matter whoever that head be, he has to collect the taxes.
Oliver Wendell Homes Junior has said that ‘taxation’ is the price we pay for civilization, This illuminating comment prompts the reflection that if the price is too high, civilization will be threatened by corruption, if the price is too low civilization will be threatened by violence. What is therefore, required is striking a proper balance.
Kanga and Palkhivala in the 8th Edition, had an occasion to observe in the book “The Law and Practice of Income Tax” that “Taxes are the lifeblood of any Government, but it cannot be over emphasized that the blood is taken from arteries of the tax-payers and, therefore, transfusion has to be accomplished in accordance with the principles of justice and fair play.”
Every Government has a right to levy taxes, but no Government has a right, in the process of extracting tax, to cause misery and harassment to the tax-payer and the gnawing feeling that he was made the victim of palpable injustice.
Perhaps, for that reason, if you look at our history, Manu and Chanakya have stated about the way in which the taxes should be collected by the King from his subjects.
Chanakya has also given due importance to the taxes and said how the tax should be collected. Chanakya said that the tax should be collected in the way in which a honey bee collects nectar from the flower in which the honey bee is satisfied and the flower is not adversely affected. So without adversely affecting the tax-payer, the State has to collect taxes. I think this is a wonderful theme which Chanakya had envisaged.
It has been stated in Manu Smriti that King must collect the taxes from every one and he should not become harsh while collecting the same. It has been stated in Manu Smriti that tax should be collected even from a downtrodden person like vegetable vendor. But tax should be little. So far as unskilled persons are concerned, it has been said by him that they should be asked to work for the State for a day in a month. So according to him, the tax would be about 3 to 4 per cent from even a unskilled worker.
Of course, these are the matters of the past. Now we in the 21st Century may not like to adopt the aforesaid methods, but the principles laid down by Manu as well as Chanakya should be followed.
The role of the professionals who are operating the system has in the recent years become more pivotal in the context of fast changing fiscal scenario. They are required to be knowledgeable with requisite expertise in the chosen fields. In these days of globalization they have got to be well versed not only with the judicial process but also with the dynamics of social and economic changes brought about by the globalization and liberalization. They are therefore expected to keep themselves abreast of not only with the changing laws with which they have to deal with but also with the global laws and international treaties, covenants etc. The Governments collect taxes for the purpose of supporting operation of the Government itself, to influence the Macro economic performance of the economy with the aid of sound fiscal policy and to carry out the functions of the Government, to redistribute the resources among the individuals or classes of the population and to modify the patterns of the consumption or employment within the economy. The tax professionals play a major and vital role in achieving the goals that are intended to be realized though the instrumentality of taxation.
The variety of tax management and advisory services performed by the accountants and lawyers may produce conflicting pressures and objectives. As such the tax practitioners should not forget that they, as Tax Professionals have to maintain the same standards and follow the same professional ethics as those belonging to the legal profession. Of course they are professing a specialized field but they are also part of the same legal system.
In our society, the profession of law commands great respect and therefore a member of this profession must make himself equal to the task. The profession calls for great knowledge, high mental capacity, and wide culture. Every lawyer owes a solemn duty to uphold the integrity and honour of the profession; to encourage respect for the law, the Courts and the Judges; to observe the Code of Professional Responsibility; dedicated to pubic service; to act so as to reflect credit on the legal profession and to inspire confidence and respect of litigants and of the public. He has to strive to avoid professional impropriety.
In the field of taxation he has to take due care to see that his client remains fair to the Government and pays taxes honestly. We all know that tax avoidance and evasion are quiet different and a lawyer should never be a party to evasion of law.
Meyer who has investigated the origin and progress of judicial institutions in Europe has said about the relationship between the advocate and the public thus:
“He who has devoted himself to that profession which is as difficult as it is honourable; who receives in his chamber the most confidential communications; who directs by his counsel those who come to ask his advice and listen to him as though he were an oracle; who has the conduct of causes the most important; who constitutes himself the organ of those who claim the most sacred rights, or the defender of those who find themselves attacked in their persons, their honour or their fortune; who brings forward and gives efficacy to their demand, or repels the charges brought against them; he, I say, who does all this, must necessarily require the support of the public. By his knowledge, his talents, his morality, he ought to endeavour to win the confidence and the goodwill of his fellow citizens”.
A basic tenet of the professional responsibility of lawyers is that every person in our society should have ready access to his independent professional services. Maintaining the integrity and improving the competence of the Bar to meet the highest standards is the ethical responsibility. Members belonging to this profession have not to encourage dishonesty and corruption but have to strive to secure justice to their clients in all legally possible manners. The credibility and reputation of the profession depends upon the manner in which the members of the profession conduct themselves.
Another basic tenet of this profession is devotion and commitment to the profession, which pay him all the dividends. A lawyer should, not only be physically and mentally brave but courageous as well. The glory of a lawyer is his strength, knowledge and acumen.
Law is a deep science; its boundaries, like space, seem to recede as we advance, and though there may be as much of certainty in it as in any other science, it is proper that a lawyer should be modest in his opinions. The lawyer should obtain full knowledge of his client’s cause before advising thereon and give an candid opinion of the merits and probable results of pending or contemplated litigation. The lawyer can neither predict nor assure the event; he can at the best expect and hope. He should endeavour by all fair and honourable means to obtain for his client the benefit of any and every remedy and defence, which is authorized by law. The attitudes and habits of truthfulness and integrity are sine qua non for any professional including tax practitioner. The perception and determination to exhibit and perform the best should be ventilated from the lawyers. They should maintain objectivity and integrity and should be free of conflict of interest and should not knowingly misrepresent the facts. The practitioner should not disclose any confidential client information without specific consent of the client. Loyalty is essential to the Attorney-client relationship. Attorneys are prohibited from representing a client to adversity affect another client.
Lately there is seen erosion in the values and the legal profession has also not remained unaffected. The major challenge of the new millennium is to tackle the erosion of values in the profession. The Advocates Act, 1961 has prescribed high standards in the profession and laid down Code of conduct to regulate and maintain the status and standard of the profession. An Advocate has to assume onerous responsibilities involved in the discharge of the public duties by securing maintenance of the requisite standard of discipline and conduct. So at this juncture, it is the duty of lawyers to see that all efforts are made to see that professional standards are raised to the expectations of the society.
There have been spectacular developments in the fields of computers, microelectronics and communications that have given rise to a wholly new age for humanity – the age of informatics. Advocates have to update themselves to utilize maximum use of computer and other electronic devices. Today, information can be store electronically and worked upon. This will lead to an enormous increase in efficiency as well as in the speed of processing. In order to encourage Information Technology and computer related activities, deductions and allowances are provided to such businesses. I am sure that lawyer friends would not only see that their clients take due advantage of tax benefits but they too should try to modernize with help of all useful electronic equipments.
The complicated tax structure and policies of the country and the plethora of judicial decisions on tax laws have given rise to uncertainty and confusion in the minds of assessees. To add to these are the frequent amendments to the laws relating to Income Tax and Companies Act. An Advocate, as a guide and ready reckoner to the fast changing tax laws, has to remain upto date and always equipped with all the necessary knowledge. Maintenance of a well-equipped library and regular use of books and periodicals on relevant subject can in a way help one to update knowledge of law and tax policies. Continuing professional education through Conferences, workshops and Seminars is the need of the hour.
In the present scenario, the subjects chosen for the technical sessions are of high order and I am sure that your deliberations would be carried to logical conclusions. Organizing such Conferences would be of immense help to the society.
I hope that the members of the Tax Bar Associations will rise to the occasion and meet the challenges of the times ahead of us with vigour and enthusiasm to strive hard to maintain the public confidence in our economic system. For this, you will have to maintain a strong sense of identity, solidarity and commitment. A better public image can be built up through hard work and sense of values.
I once again thank the organizers of this Conference for having given me the opportunity to meet all of you and talk to you on the subject.
*Reproduced with permission from the AIFTP Journal – August 2008 issue.