Ethics, Professional Responsibility in Modern Tax Practice and Conventions – Path Forward – by Dr. K. Shivaram, Senior Advocate

1. Introduction.

The centenary of The Chamber of Tax Consultants, Mumbai, one of the oldest and most respected professional bodies in the country, is not merely a celebration of longevity but a tribute to a century-long commitment to integrity, excellence, and service to the tax profession. As tax practice undergoes rapid transformation driven by technology, data analytics, and faceless regimes, the subject of “Ethics, Professional Responsibility in Modern Tax Practice and Conventions – Path Forward” assumes renewed significance. Ethical conduct is not an impediment to effective tax practice; rather, it is its very foundation.

The great jurist Mr. M. C. Chagla, the first Indian Chief Justice of the Bombay High Court, stated:

“The legal profession is a great calling, and it is a learned and liberal profession. Remember always that it is a profession; it is not a trade or business. The distinction between the two is deep and fundamental. In business, your sole object is to make money. You owe no duty or obligation to anyone except to yourself. You determine the means to achieve your aim and there are no standards to limit or restrict your actions. In the profession, making of money is merely incidental. You have traditions to which you have to be true. Like an artist, there has to be a passionate desire to attain perfection. Service to society and justice to fellow men has to be the dominant motive underlying your work.”

Taking inspiration from the words of Justice Mr. M. C. Chagla, this article attempts to examine the ethical obligations of tax professionals in modern times, judicial recognition of professional responsibility, conventions, and the path forward for preserving public trust in the tax profession.

2. Ethics: The Soul of the Tax Profession.

The practice of taxation is intrinsically linked with public finance, constitutional governance, and citizens’ rights and obligations. Every tax professional operates at the intersection of the State’s power to levy taxes and the taxpayer’s right to be treated fairly. Article 265 of the Constitution of India reads:

“No tax shall be levied or collected except by authority of law.”

The taxpayer has an obligation to pay tax that is rightfully due to the State—neither more nor less.

Professional ethics are not ornamental but fundamental, forming the backbone of any learned profession. The legitimacy of a profession depends not only on technical competence but also on moral accountability.

For tax professionals, ethics manifests in:

• Honesty in disclosure
• Independence in advice
• Confidentiality of client information
• Avoidance of conflicts of interest
• Respect for law and institutions

3. Advocates and Chartered Accountants: A Common Ethical Standard.

Advocates and Chartered Accountants, though governed by different statutes and professional bodies, share a common ethical standard. However, for tax practitioners, there is no single statutory body that lays down professional ethics. Many leading tax professional bodies have adopted a Code of Conduct for their members; hence, tax practitioners are also governed by the respective codes adopted by their associations.

The Hon’ble Supreme Court in Mahipal Singh Rana v. State of Uttar Pradesh (2016) 8 SCC 335 observed:

“No judicial system in a democratic society can work satisfactorily unless it is supported by a Bar that enjoys the unqualified trust and confidence of the people, that shares the aspirations, hopes, and ideals of the people, and whose members are monetarily accessible and affordable to the people.”

The Court further observed:

“The legal profession is a solemn and serious occupation. It is a noble calling and all those who belong to it are its honourable members. Although entry to the profession can be had by acquiring merely the qualification of technical competence, the honour as a professional has to be maintained by its members by their exemplary conduct both in and outside the court.”

In P. D. Khandekar v. Bar Council of Maharashtra (AIR 1984 SC 110), the Court observed:

“The Preamble to Chapter II, Part VI of the Rules lays down that an advocate shall at all times comport himself in a manner befitting his status as an officer of the Court, a privileged member of the community, and a gentleman. Rule 36 provides that an advocate shall not solicit work or advertise, either directly or indirectly, whether by circulars, advertisements, touts, or personal communications. It is a well-recognised rule of etiquette in the legal profession that no attempt should be made to advertise oneself or solicit work, directly or indirectly.”

In tax practice, this translates into a duty:

• Not to mislead authorities
• Not to encourage abusive tax positions
• Not to fabricate or suppress material facts

4. Duty to the Client and Duty to the Law: A Delicate Balance.

A tax professional undoubtedly owes a duty of loyalty and competence to the client. However, this duty is not absolute and cannot override the duty to the law. True professionalism lies in having the courage to say “no” when a proposed course of action is unethical or unlawful.

5. Candour and Fairness before Authorities.

With the advent of faceless assessments and digital interfaces, written submissions have replaced oral persuasion. This places a greater ethical burden on professionals to ensure:

• Accuracy of facts
• Fair presentation of law
• Avoidance of misleading citations or selective quotations

The credibility of the profession depends on whether its members are perceived as assistants to justice rather than obstructions to administration.

6. Confidentiality and Data Ethics in the Digital Age.

Modern tax practice involves handling vast volumes of sensitive personal and financial data. Ethical responsibility today extends beyond legal confidentiality to data stewardship.

Unauthorised sharing of client information, lax cybersecurity practices, or misuse of data for collateral purposes can cause irreparable harm. Professional ethics require tax practitioners to adopt:

• Robust data protection measures
• Clear internal protocols
• Awareness of privacy principles

Confidentiality is not merely a contractual obligation; it is a fiduciary duty.

7. Mentorship, Education, and Ethical Continuity.

Ethics is not inherited automatically; it must be taught, practised, and transmitted. Senior members of the profession carry a special responsibility to mentor younger professionals not only in law and procedure but also in values and conduct.

Institutions like The Chamber of Tax Consultants have historically played a vital role in:

• Promoting ethical discourse
• Encouraging scholarly debate
• Providing platforms for principled advocacy

At a time when commercial pressures are high, institutional guidance becomes even more vital.

8. True Professional: Thoughts of Dr. Nani A. Palkhivala and Shri P. N. Shah.

Members of the Journal Committee of the Bombay Chartered Accountants’ Society interviewed Padma Vibhushan Dr. Nani A. Palkhivala, Senior Advocate, published in BCAJ (September 1988, pages 791–816). At page 799, he stated:

 

“A ‘true professional’ is a person with courage, integrity, and humility. If a Chartered Accountant or a lawyer has intellectual integrity, he will never give an opinion merely to suit the client. Every professional must have that ideal before him when advising clients.”

Shri P. N. Shah, Chartered Accountant and former President of the Institute of Chartered Accountants of India and BCAS, in his article “Role of Professionals in Tax Practice” (Income Tax Review, Aug–Sept 1996, p. 117), laid down seven governing principles:

(i)     Integrity – A professional should be straightforward, honest, and sincere.

(ii)    Objectivity – A professional must remain fair and unbiased.

(iii)    Independence – A professional must both be and appear independent.

(iv)   Confidentiality – Client information must not be disclosed without authority or legal requirement.

(v)    Technical Standards – Duties must be discharged in accordance with applicable standards.

(vi)   Professional Competence – Only work that can be competently handled should be undertaken.

(vii)   Ethical Behaviour – Conduct must uphold the reputation of the profession.

A professional who adopts these principles in daily practice can achieve enduring success and inner satisfaction from service to society and the profession.

9.     Conventions and Duties of Members of the Bar.

Over the years, the Bar has evolved well-recognised conventions that embody dignity, discipline, decorum, and professional tradition. The Mumbai Tax Bar is widely acknowledged as one of the finest tax Bars in the country.

At a farewell function held in Mumbai on 16 November 2019, Hon’ble Mr. Justice Akil Kureshi, then Chief Justice of the Tripura High Court, observed:

“You are an outstanding Bar, having excellent seniors, very competent middle-level advocates, and talented juniors.”

Hon’ble Mr. Justice Akil  Kureshi further stated:

“Some of the finest tax counsel are from the office of Mr. Soli Dastur, Senior Advocate. Mr. Soli Dastur had about 20 to 21 juniors, and today we have at least 5 or 6 quality all-India arguing counsels from just one Chamber. We need more Soli Dasturs in this place.”

Mr. V. H. Patil, Advocate, has mentored and trained  over  21 juniors  in his chambers. Mr. Y. P. Trivedi, Senior Advocate, has mentored and trained over   10 juniors from his chambers. The Chamber of Tax Constantans owes its prestigious standing to the leadership of icons such as Shri V.H .Patil Advocate , Shri .Y.P. Trivedi Senior Advocate  and Shri .S.E. Dastur Senior Advocate .  It is a matter of great distinction for us to belong to an institution shaped by such exemplary stalwarts of the profession.

Many leading members of the Mumbai Tax Bar were fortunate to have trained in renowned chambers of senior advocates/Advocates  who served as role models in professional excellence and ethical conduct. I myself had the privilege of being associated with the chamber of Shri V. H. Patil, Advocate, who was widely respected for his integrity, scholarship, and ethical standards. A senior advocate’s chamber is not merely a place for learning advocacy skills; it is where a young lawyer imbibes the conventions, values, and discipline of the profession.

Over time, however, the traditional chamber culture has been gradually diminishing. Today, a large number of young advocates and Chartered Accountants appear before the Income Tax Appellate Tribunal (ITAT). While many possess excellent command over law and facts, several have not had the opportunity to closely observe and internalise the long-standing conventions of professional conduct before the Tribunal.

We had the privilege of witnessing stalwarts such as Shri R. J. Kolah, Shri N. A. Palkhivala, Shri S. P. Mehta, and several others argue before the High Court and the Tribunal. Any tax professional aspiring to excellence must read the special issue of the All India Federation Journal (AIFTPJ – August 2003) titled “Federation Salutes to the Three Stalwarts of the Tax Bar”, dedicated to Shri R. J. Kolah, Shri N. A. Palkhivala, and Shri S. P. Mehta.

Hon’ble former Chief Justice of India, Hon’ble Mr. Justice S. H. Kapadia, then a Judge of the Bombay High Court, in his message dated 9 June 2003 titled “My Tribute to the Stalwarts of the Tax Bar”, wrote:

“In the field of Income Tax Law, out of a few luminaries, there were three legends; i.e. late Shri R. J. Kolha, late Shri S. P. Mehta and late Shri Nani Palkhivala, who devoted their professional practice to the field of Direct Tax laws. I deem it a great privilege to have been requested by the All India Federation of Tax Practitioners to forward them my tribute to the above stalwarts in the form of a message for their publication.

All three stalwarts led the Tax Bar in intellect, clarity and integrity. They have provided a valuable legacy in the form of their juniors who today have emulated these three stalwarts in the above virtues and who, in turn, today are leaders of the Tax Bar.

I was lucky to have seen the three stalwarts in action when they were not so young and yet, after hearing them for a few moments, I came out of the court with the following words which flashed across my mind:

‘The spirit knows no youth or age, no fatigue or death.’

These are the qualities and virtues which should inspire our young professional lawyers and I am happy to state that, even today, in the Tax Bar practising in the High Court, there are young professional lawyers who are following in the footsteps of these three legends.”

I appeal to young professionals to read the aforesaid publication, which is also available on the website www.aiftponline.org, to understand the enduring values, ethics, and professional standards upheld by these three stalwarts of the Tax Bar.

With a view to guiding young practitioners appearing before the ITAT, the following conventions deserve careful attention:

1. Follow the Dress regulations for representatives of the parties as prescribed under Rule 17A of Income -tax (Appellate Tribunal ) Rules, 1963.
2. No appearance should be made without written authorisation, which should be filed in advance.
3. Address the Bench as “Your Honours” or “Sir”, and not as “Lordship”, “My Lord”, or “Your Worship”.
4. Adjournment applications should be filed at least three days in advance, with a copy served on the Departmental Representative.

5. Even for adjournments, authorised representatives must appear in the prescribed dress.

6. While seeking an adjournment, be familiar with the basic facts, as the Hon’ble Members often inquire about the issue involved.

7.      Where there is delay in filing an appeal, an application for condonation of delay                  supported by an affidavit must be filed along with the appeal.

8.      Paper books should be filed at least a week before with proof of  service of a copy of          the same on the other side    as prescribed under Rule 18 of  Income -tax (Appellate                    Tribunal ) Rules , 1963.

9. Before arguing the matter, verify whether the contents of memorandum of appeal as per the Rule 8 of Income -tax (Appellate Tribunal) Rules, 1963.

10. Maintain courtesy towards Senior Advocates during mentioning.

11. No reading of newspapers inside the courtroom.

12. No conversations during court proceedings.

13. No drinking water while seated during proceedings.

14. Authorised representative must enter the court with prescribed dress as per the Rules of the ITAT. No coats should be worn during proceedings when the hearing is in progress.
15. No usage of mobile phones in the courtroom.

16     Always face the Bench while addressing the Tribunal.

17. The appellant has the right to begin and reply. [CIT v. Khemchand Ramdas (1933) 1 ITR 309 (Bom) (HC)].

18. Factual corrections may be made only with the permission of the Court.

19     Judgments must be verified before being cited. [Raghubhai Surabhai Bharwad v. Satishkumar Ranchhoddas Patel (2003) Cri LJ 3984 (Guj.) (HC) (para 22)].

20. Change of counsel should not be made without consent. [Balaram Tiwari v. Regional Transport Authority, Varanasi Region (2000) All LJ 2407 (All.) (HC) (para 7)].

21. An accepted vakalatnama binds appearance despite unpaid fees. [Mehbub Ali Khan, In re: AIR 1958 AP 116 / 1958 Cri LJ 155 (FB) (AP) (HC) (para 5)].

22. Laughter in court is improper; at most, a gentle smile is permissible.

23. Even in virtual hearings, dress regulations and courtroom decorum must be strictly maintained.

24. Always keep the relevant assessment year’s Income-tax Act and Rules readily available for reference.

25. When the last matter of the day is being heard and no other representative is present, do not leave the courtroom before the Bench rises.

10. Path Forward.

As the Chamber of Tax Consultants enters its second century, the profession stands at a defining moment. Laws may evolve and technology may transform practice, but ethical values must remain immutable.

Professional success without integrity is fleeting; a reputation founded on ethics endures across generations.

As tax practitioners, we must remain mindful of Article 51A(j) of the Constitution of India- Fundamental duties ,  which  reads as under “to strive towards excellence in all spheres of individual  and collective activity so that the nation constantly rises to higher of endeavour and achievement”.

May the next century of the Chamber of Tax Consultants continue to be guided by learning tempered with humility, advocacy anchored in ethics, and excellence rooted in responsibility.

I am grateful to Mr. Jayant Gokhale, President, and Mr. Vipul Chokshi, Chairman, Centenary Committee, for the opportunity to share my thoughts on this important subject.

My best wishes to the Chamber on this memorable centenary occasion.

Jai Hind.

31-12-2025

[Source : Centenary Year Souvenir – The Chamber of Tax Consultants Page No. 85 to 90 (30th & 31st January 2026)]