Ethical Challenges Faced By Professionals In Today’s World – A Panel Discussion

Chamber of tax consultants: Ethical Challenges faced by Professionals in today’s world – A Panel discussion held on July 15, 2020

15th July 2020 marked the 84th birthday of Advocate Shri V.H.Patil (Born on July 15, 1937) who is one of the eminent tax counsel, known for professional ethics and integrity. Shri V. H. Patil is mentor for many professionals, hence the new energetic Membership & Public Relations Committee of Chamber of Tax Consultants (CTC chaired by CA Nishtha Pandya with Co-Chairman, CA Premal Gandhi  arranged a virtual panel discussion on the subject of “Ethical Challenges faced by Professionals in today’s world”.

Mr. V. H. Patil with some distinguished juniors of his Chamber

Speaking on the occasion, Mr. Anish Thacker, President of CTC for the year 2020-21 explained in brief qualities of Advocate Shri V.H. Patil and some of the great advice of Shri V.H.Patil. He also stated that he considers CA Shri Maganlal Thacker and Advocate Shri V.H. Patil as his Gurus.

Summary of the speech delivered by Dr.K.Shivaram, Senior Advocate

Dr K. Shivaram stated that all juniors of Patil Sir, used to refer him as ‘Patil Saheb’, therefore in his talk, he would refer to Patil Sir, as Patil Saheb.

Patil Saheb started his practice in year 1960 before the Hon’ble Bombay High Court in the field of general law. Apart from academic brilliancy (He stood first in his LL.B., won8 out of 9 awards and is considered a Shanker Seth Hindu Law Scholar – LL.M. 1959 in Hindu law from University of Mumbai) Patil Saheb is follower of Gandhian philosophy and a man of immense simplicity.

He highlighted seven important virtues of Patil Saheb which one may not find in any books or articles. He stated that he is very optimistic that if a lawyer or Chartered Accountant follows these seven virtues of Patil Saheb as a role model, nobody can stop him or her from becoming one of the leading tax litigation consultantsin the Country. The seven virtues are:

1. Teaching of law
2.Service to professional organizations without any expectations -Development of the Chamber of tax Consultants
3. Training of juniors
4. Representation before Court
5. Drafting skills of the petition and opinions
6.Courage to fight for upholding the honour and dignity of the profession.
7.Service to humanity

1. Teaching of law

Dr. K. Shivaram stated that his first interaction with Patil Saheb was in the year 1975, when he was studying in the second year of law at Siddharth college of law (which was formed by Dr. Babasaheb Ambedkar on July 8, 1945) where Patil Saheb was teaching the subject of “Income-tax and Sales Tax”. During those days Taxation was a compulsory subject in second year of law. He was a student of the evening batch whereas Patil Saheb was teaching in the morning batch. The then Principal of the College Shri P.G.Borale told the students in one of his lectures that, “We have a professor named Mr. V.H. Patil, and when he teaches you will feel like the goddess Saraswathi is herself teaching you”. Closer to the time of examination, Patil Saheb used to conduct a special combined lecture for the morning and evening batch. Patil Saheb taught in a very simple language and used to give notes on the subject as preparation guide for the examination. Patil Saheb taught the Constitution of India and Taxation laws in Siddharth law college from 1962 to 1976.  Patil Saheb was also professor for Post graduate Studies at the University of Bombay.

When Dr.K. Shivaram completed his third year of law in the year 1976, Patil Saheb told him to join his Chamber. After working in a private company, every evening he used to visit Patil Saheb’s chamber just to understand the tax Practice. When he decided to join Patil Saheb’s chamber, he consulted his former employer, who was one of the leading corporate at that time, and having large number tax litigation matters. The Finance Director of the group being a Chartered Accountant, was knowing the who’s who of the tax litigation practice. He advised Dr. K. Shivaram not to leave the job as it would be a risk in his career.  He gave the long list of tax counsel who could not do well and that he would end up amongst them. Further, he promised a double salary so that he does not leave the job.

It is Patil Saheb who told him to leave the job and join the chamber. It is by the grace and fortune of Patil Saheb that he became a lawyer, otherwise he had no intention of joining the legal profession. Whatever, he is   today it is mainly because of Patil Saheb.

First lesson is, the young lawyers or chartered accountants must teach in colleges that gives them the presentation skill, vocabulary and in-depth study of the subject. Patil Saheb taught in colleges for nearly 14 years

2.Service to the professional organizations without any expectations- Development of the Chamber of tax Consultants (CTC)

CTC though it was established in the year 1926,was not very activetill1976. Patil Saheb was elected as President in the year1976 –78. He stated that, it is Patil Saheb who gave the re-birth to the Chamber of Income-tax Consultants (now known as The Chamber of Tax Consultants). It is for the first time a tax counsel who is practicing on direct taxes was elected as the President of the Chamber of Income-tax consultants. It was Shri B. C. Joshi, Shri K.K. Ramani and Shri  P.C.Joshi who deserve to be acknowledged for introducing Patil Saheb to the Chamber of Income tax consultants, as the President.

Patil Saheb commanded the highest respect from and was friendly with the entire tax Bar of Mumbai. It is Patil Saheb who has persuaded Dy. Y.P. Trivedi, Senior Advocate, Shri S.E. Dastur, Senior Advocate, Shri D.M. Harish Advocate and Shri Narayan Varma one of the eminent Chartered Accountants and many more to shoulder the responsibility as President of the Chamber. Patil Saheb is the only one professional who was elected as the President of the Chamber of tax consultants from 1975 to 1977 and 1999-2000 (75thyear of the Chamber of tax consultants Platinum Jubilee)     

Second lesson is, work for the association don’t expect the post or recognition.

3.  Training of juniors

Dr. K. Shivaramstated that he has the great satisfaction of sharing with the participants that Patil Saheb has trained nearly 21juniors from his chamber. This information he could able to compile with the help of Advocate Shri N.R. Jagtap, who is one of the senior most juniors of Patil Saheb.  According to him this is the greatest contribution of Patil Saheb for development of the tax profession.

Three of his juniors have become past presidents of the Chamber of consultants. (Including him other two are Advocate Shri Keshav B. Bhujle and Advocate Shri Vipul B Joshi)

Many of Patil Sahib’s juniors who are practicing on direct taxes are contributing for the development of the tax profession by way of articles, delivering lectures, authoring books etc.

He also shared that as juniors they would sit in the conferences and participate in the discussion, interact with the clients, this gives immense confidence to a junior. When a junior is trained in a chamber, he or she will learn convention and tradition of the profession which one will not find any of the books or publications.

Patil Saheb shared with us a trait he learned from his worthy Senior Advocate Shri Sanat P. Mehta that, when a client comes for a conference, open the Act, read the section in their presence and then answer their query.

Apart from regular juniors there were large number of young lawyers and chartered Accountants who used to meet Patil Saheb regularly for his guidance on various academic issues.  

One of his found memory in the chamber was when all used to have lunch together sharing the food together.

Third lesson is that, share your knowledge and experience, more you share your, your wealth of knowledge increases.

4. Representation before Court

Once, Patil Saheb was arguing before the Hon’ble Bombay High Court it was relating to the issue of partnership and taxation.

Before Patil Saheb could start his arguments, the Hon’ble Judge remarked that this is an issue relating to Partnership Act and that he had read the entire brief and that there was no case to be made. To which Patil Saheb politely submitted, My Lord may be right, but let me put forward my submission and then Your Lordship may decide. After the hearing, the Hon’ble Judge apologized to Patil Saheb for his earlier remarks. This is an example of Patil Saheb’s convincing ability before the Court and in-depth knowledge of general law which Patil Saheb acquired while practicing in Civil litigation practice before the Hon’ble Bombay High Court for about seven years i.e. from 1960 to 1967. Patil Saheb joined the chamber of Advocate Shri Sanat P. Mehta in the year 1967, and was in the Chamber up to 1972.

In the year 1972, Patil Saheb started his independent practice. Patil Saheb is one of the Counsel who has argued many land mark cases on direct taxes as well as indirect taxes (Sales tax).

Fourth lesson is if one desire to excel in the profession and to make better representation he or she should have in depth knowledge of general law.

5.  Drafting skills of the petition and opinions

Patil Saheb’s drafting skill was extraordinary. In a Sales tax matter, the Hotel Association were to challenge certain provisions of the erstwhile law. They consulted one of the retired Judge of the Hon’ble Bombay High Court for, who was earlier heading the tax Bench. Honourable Judge advised them get the petition drafted by Patil Saheb, because the honourable judge had the opportunity of reading some of Patil Saheb’s petitions when the honourable Judge headed the tax Bench. This is an example of Patil Saheb’s ability to draft the petition, in very precise and to the point fashion.Dr. K. Shivaram stated that he has also seen Patil Saheb drafting opinion and advisories with a continuous flow and without referring to any book or paper. This shows the blessing of goddess Saraswathi on Patil Saheb. Patil Saheb has also authored a book titled “Principles of Sales tax” It was meant for beginners and law students.

Patil Saheb has written many articles papers, addressed various seminars etc and was editor of Income-tax Review and editorial Board of several journals and magazines.

Few days back,Dr. K. Shivaram had the occasion of reading a paper on the subject of “Natural Justice” which Patil Saheb had presented in the 24thRRC of BCAS in the year 1991, even till day, it is very relevant and deals with first principle of Natural Justice.

Fifth lesson is that, one has to develop their writing skill.

6.Courage to fight for upholding the honour and dignity of the profession.

a. Editorial of the Journal

Once Patil Saheb wrote an editorial against the corruption. At that time the Income Tax Department was subscribing to the journal of the Chamber of Income tax Consultants. The then Chief Commissioner called the President of the Chamber of Income Tax Consultants and told him that, when an editorial is written it represents the view of the Association and informed the President to request Patil Saheb to tender an apology in the next month’s editorial. The entire Managing committee of the Chamber of the Income tax consultants supported Patil Saheb and assured him that if any action is taken by the Income Tax Department, they would stand by Patil Saheb. No action was taken by the  Income Tax Department. 

b. Wrong observation against a Reputed Chartered Accountant in an order

One of the senior and highly respected member of the Chartered Accountancy profession, appeared and succeeded in the matter before the Appellate Tribunal. However, in the text of the Order some remarks were made stating that, the Chartered accountant misrepresented the facts. Patil Saheb requested the Chartered Accountant to file a Miscellaneous Petition for removing (expunging) the particular sentence from the Order. Ultimately, the rectification of the order was made and the said sentence was expunged from the order.

Sixth lesson is that whatever may be circumstances one should be very firm on professional ethics and no compromise should be made.

7.Service to humanity 

Dr. K. Shivaram stated that Patil Saheb always believed and practiced that Service to humanity is the purpose of life. When Patil Saheb used to go for morning walk, at 7.AM and Patil Saheb would feed the street children regularly for number of years and used to celebrate Republic Day and Independence Day with them. Patil Saheb has also donated substantial amount to night school at Mumbai where the under privileged would attend the evening classes.

Patil Saheb used to give free advice to needy people. Patil Saheb in one of his articles which is reported in AIFTP Journal May, 2004 wrote as under “The idea of taking up a profession is not at all with a view to make lots of money, but to render useful services to the needy ones.  There is a sharp distinction between a profession and a business. Whereas in the case of business, profit motive is predominant. In the case of the profession what is really important is rendering professional service which is service oriented and not profit oriented.”

In the said article,Patil Saheb also referred the advice which he received from his worthy senior Advocate Shri Sanat.P. Mehta, who described the relationship between a lawyer and his client is like trustee and beneficiary of a trust. A Lawyer is a trustee and your client is a beneficiary of such trust. This precious advice of his worthy senior has always remained as a guiding star throughout Patil Saheb’s professional career. Patil Saheb in the last part of his article   wrote as under “Have infinite patience and success is yours … Work, work and work only for the good of others – that is life”

Patil Saheb followed a simple life in his chamber any professionals were welcomed to visit to discuss their personal matters or for guidance, without prior appointments.

Seventh lesson is that, service to humanity is service to the god and the purpose of life.

Going forward
Going forward, as the ITAT Bar Association Mumbai, ITAT Bar Association Ahmadabad and All India Federation of Tax Practitioners have adopted a Code of Ethics to members. Dr. K. Shivaram made an appeal to the President of the Chamber of Tax Consultants to consider the proposal of adopting the code of ethics to the members of the Chamber of Tax Consultants which would, in his opinion, help the institution.

Dr. K. Shivaram stated that ,former Chief Justice of India, Hon’ble Justice S.H. Kapadia (Then as a senior Judge of Bombay High court,) when his lordship has inaugurated the National Convention of AIFTP at Mumbai, His lordship, was pleased upon reading the code  of ethics of the All India Federation of Tax Practitioners (AIFTP) his lordship’s concluding remarks were,“Mr. Shivaram, all clauses are fine but what about Article 51A of the Constitution of India i.e. Duty to the nation, please consider the same”. Dr. K. Shivaram also made a request to the President, to include of Article 51A of the Constitution of India if the Chamber is proposing to adopt the code of ethics to its members.

Role model

Dr.K.Shivaram, stated that, Patil Saheb is a role model to many professionals, and today’s panel discussion may inspire many young professionals to follow the value and ethics followed by Patil Saheb. Dr. K. Shivaram, made an appeal to the President to consider the proposal of holding a yearly lecture on 15thJuly of every year on general subjects (Other than tax) as a respect to Patil Saheb for the development of Tax profession and especially for the development of CTC, Mumbai.

Dr. K. Shivaram also requested the President, to consider publishing the writing of Patil Saheb which are relevant to todays practice, the same could bein the form of an e-publication or regular printed publication. It could be joint publication of the CTC, BCAS and AIFTP or exclusive publication of the CTC.

Dr. K. Shivaram expressed his gratitude to the CTC for giving him this opportunity to share the great qualities of  his senior Advocate Shri V.H. Patil.

Dr. K. Shivaram made an appeal to pray together for good health and long life of Patil Saheb, so that many young professionals can have the blessing and guidance of Patil Saheb in the years to come.

Summary of the speech of Shri Saurabh N. Soparkar, Senior Advocate.

Shri Saurabh N.Soparkar, Senior Advocate shared his great experience with Patil Saheb when he has presented the paper to the CTC about 20 years back.

He stated that is yet to see an unassuming, simple and a gentleman in the profession as Patil Saheb. Around three decades back, when he was invited for the RRC by CTC at Lonavala, Mr. Patil welcomed him and put him at  ease very affectionately, which Mr. Soparkar would always remember

He threw light on morals & acceptable behavior within the four corners of law. Ethical challenges faced even within the four corners of law, as the same might conflict with client’s interest, duty towards the courts etc.

The Bar Council has set ethical standards for lawyers viz. towards the Court, towards the Client and towards the other-side.

Duty towards Court

Firstly, a lawyer is expected to behave in a dignified manner. Secondly, a lawyer has to respect the Court; this has to be understood differently from being submissive to a Judge. Where he believes that it is the duty as a lawyer to be firm on his stand by way of submission and communicate his view to the Judge. It is important to be respectful while communicating to the Judge.

He explains an incident where the counsel appearing before the Ahmedabad Tribunal on behalf of the taxpayer cited an order a favorable order of the same Tribunal and a decision of the Hon’ble Bombay High Court. However, the Tribunal felt that there is an order by the same member which has taken a contrary view, and the decision of the Hon’ble Bombay High Court has not considered an earlier contrary decision of the same High Court which got approved by the Hon’ble Supreme Court.

Relevant portion of the decision of the Tribunal’s order in the case of Dy. CIT vs Elitecore Technologies Private Limited [2017] 80 taxmann.com 6 (Ahd) (Trib.)is usefully extracted as under:

Any other approach, he very politely tells us, would be violate fundamental principles of judicial discipline and cannot, therefore, meet approval of Hon’ble Courts above. He reminds us that the Tribunal decision in the case of Tata Sons (supra) is authored by one of us and suggests, in very decorous manner- which is his hallmark anyway, that we should not become so attached to our labour of love that the cause of justice is sacrificed.”

He then discussed a few ethical standards that a lawyer must adhere to:

  • A lawyer should not discuss the matter with the judge.
  • A lawyer must not be a part to any illegal action.
  • A lawyer should not accept brief of a client who insists on unfair means.
  • A lawyer should appear in an appropriate dress code.
  • A lawyer is expected not to take up a brief of a company/ trust/ firm of which the lawyer is a part of the management.

However, it is not the duty of the lawyer while citing judgement to cite decisions held against him. On this regard, the Ahmedabad Tribunal in the case of Elitecore Technologies Private Limited (Supra) further held as under:

“Perhaps we cannot hold learned counsel for the assessee responsible for this situation, as it will perhaps be too utopian to expect such an unrealistic degree of fairness in the conduct of the assessees. It is not for them, as they would certainly argue, to find out every conceivable argument in support of the revenue authorities and to demonstrate that such arguments are unsustainable in law.”

That said, it is the duty of the Counsel to not cite overruled judgements. An observation of the Hon’ble Supreme Court in the case of State of Orissa vs Nalinikanta Muduli 2004 (7) SCC 19. Relevant portion of the decision is usefully extracted as under:

“It is strange that a decision which has been overruled by this Court nearly quarter of a century back was cited by the Bar and the court did not take note of this position and disposed of the matter placing reliance on the said overruled decision. It does not appear that the decision of this Court reversing the judgment of the High Court was brought to the notice of the learned Single Judge who was dealing the matter. It is a very unfortunate situation that learned counsel for the accused who is supposed to know the decision did not bring this aspect to the notice of the learned Single Judge. Members of the Bar are officers of the Court. They have a bounden duty to assist the Court and not mislead it. Citing judgment of a Court which has been overruled by a larger Bench of the same High Court or this Court without disclosing the fact that it has been overruled is a matter of serious concern.” 

The ethical challenge lies in a situation where a decision is not expressly overruled rather impliedly overruled. The Hon’ble High Court of Bombay in the case of Prakash ShrawanDeore vs Scheduled Tribe Certificate Scrutiny Committee, Nashik (2009) (5) Mh.LJ. 228 observed as under:

12. No doubt that the learned AGP relied on the judgment of the Full Bench of this Court in the case of Shilpa Thakur (supra) that the claim cannot be decided only on the basis of the documentary evidence but the affinity test also plays an important role. However, it is to be noted that the judgment of the Full Bench in the case of Shilpa Thakur is dated 7th May, 2009, whereas the judgement of Anand Kathole is delivered by the Hon’ble Apex Court on 8 th November, 2011. In the case of Rashmi Metaliks Limited and anr. vs. Kolkata Metropolitan Development Authority and ors. 5, the Hon’ble Apex Court has frowned upon the practice of lawyers citing multiple judgments in support of a proposition of law. Any sincere student of law, leave aside a practising lawyer, who has put a number of years at the bar, is expected to know that the judgment of High Court, including the judgments delivered by the Full Bench, which has taken a view, which is contrary to the view taken by the Hon’ble Apex Court, subsequently, the earlier judgment stands impliedly over-ruled. We do not understand the propriety in citing the judgment which is impliedly over-ruled.

Therefore, the Hon’ble High Court has clarified that even impliedly overruled judgements cannot be cited. Therefore, as a duty the Court it would be advisable to disclose the fact of an order which is possibly impliedly overruled and then distinguish it. This would not only be a display of your honesty and duty towards the court but also tremendously improve a counsel’s face value.

Duty towards the Clients

A lawyer argues the matter as a representative of the Client. Therefore, he owes his first duty to put side any personal convictions, personal views should not interfere with professional duties. A lawyer should accept all cases, irrespective of the nature of the case, otherwise the lawyer would be failing in his professional obligation and professional ethics.

Further a lawyer is duty bound to make full disclosure, not to supress evidence, he/she must uphold client’s interest. A lawyer may not be supressing the facts and he/she is not duty bound to bring out facts which are against their client’s interest.

With respect to be risky tax planning for a Client, would be to bring out all the facts, to explain the upsides and downsides, and then leave the strategy making to the Client. The ethical component is only with respect to disclosure.

Similarly, at an instance where the counsel believes further proceedings are futile on the basis of merits. Again, ethical component is only with respect to disclosure to the Client, with respect to the merit. Ethics does not require a counsel to convince the Client to opt in or opt out of the appeal. This issue is pertinent while evaluating for the Direct Tax Vivad Se Vishwas Act, 2020

In a situation where a matter’s outcome in the interest of your client would adversely affect another’ client’s interest in another case. In another situation, where the Client consults, doesn’t pay for your services and approaches another advocate to file a case; could the unpaid counsel take up the matter as an opposing counsel in the same case.

The Hon’ble Supreme Court in the case of R. Muthukrishnan vs The Registrar General of The High Court of Madras (2017) SCC OnLine SC 1791has observed as under:

“23. The role of Lawyer is indispensable in the system of delivery of justice. He is bound by the professional ethics and to maintain the high standard. His duty is to the court to his own client, to the opposite side, and to maintain the respect of opposite party counsel also. What may be proper to others in the society, may be improper for him to do as he belongs to a respected intellectual class of the society and a member of the noble profession, the expectation from him is higher. Advocates are treated with respect in society. People repose immense faith in the judiciary and judicial system and the first person who deals with them is a lawyer. Litigants repose faith in a lawyer and share with them privileged information. They put their signatures wherever asked by a Lawyer. An advocate is supposed to protect their rights and to ensure that untainted justice delivered to his cause.

24. The high values of the noble profession have to be protected by all concerned at all costs and in all the circumstances cannot be forgotten even by the youngsters in the fight of survival in formative years. The nobility of legal profession requires an Advocate to remember that he is not over attached to any case as Advocate does not win or lose a case, real recipient of justice is behind the curtain, who is at the receiving end. As a matter of fact, we do not give to a litigant anything except recognizing his rights. A litigant has a right to be impartially advised by a lawyer. Advocates are not supposed to be money guzzlers or ambulance chasers. A Lawyer should not expect any favour from the Judge and should not involve by any means in influencing the fair decision­ making process. It is his duty to master the facts and the law and submit the same precisely in the Court, his duty is not to waste the Courts’ time.

25. It is said by Alexander Cockburn that “the weapon of the advocate is the sword of a soldier, not the dagger of the assassin”. It is the ethical duty of lawyers not to expect any favour from a Judge. He must rely on the precedents, read them carefully and avoid corruption and collusion of any kind, not to make false pleadings and avoid twisting of facts. In a profession, everything cannot be said to be fair even in the struggle for survival. The ethical standard is uncompromisable. Honesty, dedication and hard work is the only source towards perfection. An Advocate conduct is supposed to be exemplary. In case an Advocate causes disrepute of the Judges or his colleagues or involves himself in misconduct, that is the most sinister and damaging act which can be done to the entire legal system. Such a person is definitely deadwood and deserves to be chopped off.

40. …
A lawyer is supposed to be governed by professional ethics, professional etiquette and professional ethos which are a habitual mode of conduct. He has to perform himself with elegance, dignity, and decency. He has to bear himself at all times and observe himself in a manner befitting as an officer of the Court. He is a privileged member of the community and a gentleman. He has to mainsail with honesty and sail with the oar of hard work, then his boat is bound to reach to the bank. He has to be honest, courageous, eloquent, industrious, witty and judgmental.”

A lawyer has an onerous obligation & challenging task but an interesting life. The Hon’ble Delhi HC held that citing an overruled judgement is contempt of court only of there is an element of malice and intention to mislead the court.

Summary of the speech of CA. Jayant P. Gokhale .

He considers Patil Saheb as a Guru who laid the standard of conduct and taught us valuable life lessons, that he is forever indebted. Patil Saheb nurtured this organization and it is good to see the heights it has reached.

He shared his experience with Patil Saheb two decades ago, when Patil Saheb appeared before the Disciplinary Committee of the Institute of Chartered Accountants of India, when he was the member of the Committee. During the break, Patil Saheb asked him to perform his duty towards the chair he was holding. Patil Saheb never discussed the matter until the Order was pronounced. Subsequently, the Order was held against Patil Saheb’s Client; which was overturned at the appellate stage.

From Holy texts such as the Bhagwat Gita, two topics on ethical challenges viz Detachment to the field i.e. Nishkam Karma, and that ethical challenges are faced by everyone. The Bhagwat Gita itself starts with the dilemma faced by Arjun and the guidance provided by Lord Krishna.

As of July 1, 2020, ICAI has introduced a new code of ethics, referred to as the revised code of ethics. Given the amount of literature a profession has to read & refer to, such guidelines are easily overlooked and there is always a presumption to whatever is being done is ethical. He believes that a code of conduct is a minimum standard of norms to be followed by consultants. Further he said beyond this, there is always the personal conscious that needs to be clear and not clouded.

Further, on technical grounds certain loopholes can be found to escape violation under the code of ethics. The level of ethical norms to be followed is individualistic and subjective.

Discussing some of salient features and amendment brought in the Code of Ethics are:

  • With respect to NOC and method of communication
  • Volume 1 of the Code deals with the Principles, Volume 2 pertains to the regulatory and procedural aspects, and Volume 3 is a case law reference.

Another issue that concerns professionals is with whether they should focus on performing the duties towards their Clients or delivering success to their Clients. Self-interest is a threat to the code of ethics i.e. the fees should not have any nexus with the success. Self-review threat for those performing an attest function; one cannot take a different stand as an auditor and another as a return preparer, it will hamper his independence. Familiarity threat, while having interested parties or familiar parties as a client or as an authority. The same is subjective and has to be evaluated by oneself. Finally, there is the intimidation threat i.e. when thethere is an influencing factor which affects one’s judgement.

Unlike Lawyers, Chartered Accountants do not have immunity in terms of client confidentiality. The new code of conduct deals with this issue. Therefore, it is important to evaluate the nature in which such details have been discovered by the auditor.

Advocate Mr. K. Gopal moderator of the technical session shared his experience with Patil Saheb and the encouragement which he got from Patil Saheb.

Questions &Answers with the Panel

Question: What do you understand by ethical challenges?

Answer: Something which is legally permissible but restricted by moral consciousness.

Question: There is a perception that to become a successful professional, ethics is a stumbling block.

Answer: It is important to define ‘success’, in the event it is defined in monetary terms, ethics would not bring you the same amount of money as much a dalal would. Unethical practices might make you some money, but would that be considered as success or a greed. A successful-ethical person would never be ashamed of any deed done by them in the past. The ethical norms are a shield and not a sword.

Question: What matters more, the quality of the services or the outcome of the services?

Answer: As a lawyer it is important to act in the best interest of your client. However, the outcome is in the hands of a 3rd person. Therefore, the outcome is immaterial. A detachment needs to be maintained.

From an Audit perspective, success and failure are subjective. What is right according to you may not be so to the regulatory authorities and vice versa. It is the reasoning and justification to your answer that hold value. Therefore,the outcome should not be focused upon at all.

Question: While working in large firms as a group, one becomes a part of the organization. There is no personal opinion rather one works in the interest of the firm, sometimes compromising on their ethical values.  

Answer: It is important to have an organizational policy and the same should be made keeping in mind the ethical standards. Blind targets should not be made and targets should be achieved ethically.

Question: Role of visiting cards vis-à-vis code of ethics

Answer: In the event the counsel is approached by a second party, who requests for the counsel’s visiting card. The same is not equivalent to a counsel going to a trade seminar and distributing his/her business card, and trying to solicit work. The latter is unethical.

There are different ways of projecting your skills and knowledge i.e. by delivering lectures etc. However, it should be done with a view to solicit clients.

Question: Should ethics be codified or inherent in a person?

Answer: A code is necessary to avoid ambiguity. A code is the beginning and not the end. The values have to be built on the code.

Question: Will non-receipt of audit fee for more than a year affect the auditors independence

Answer: As per the new code the same can be construed to affect independence. However, it doesn’t expect the Auditor to immediately cease the work. The work can be performed and then reviewed by an unaffected third party.       

Question: What if the court asks the counsel to update them with the position of law?

Answer: When the court expects a counsel to do so, he has to take the role of an amicus curie and not a counsel for the party. He needs to perform his duty towards the court and cite all the judgements to the best of his knowledge. In his submissions for the Client, he is at will to distinguish the cases and exhibit its non-applicability.

Question: Are they abetting in crime, while structuring murky tax plantings? 

Answer: As long as there is no element of illegality, there should be no ethical problem. Advising a Client on Havala transactions or Bogus share capital, then the consultant has engaged in unethical practice.

Question: Does a lawyer require to retain a copy of his advisory?

Answer: No

While Concluding, Mr. Anish Thacker President of the CTC also thanked Advocate Mr. Keshav Bhujle who was instrumental in arranging this program.

Editorial Note: Summary of the lecture is prepared by Advocate Mr. Shashi Bekal, Advocate, Mumbai for the benefit of Young lawyers, Chartered Accountants, law students and tax consultants who desire to develop tax litigation practice.

Source: We acknowledge CTC for organizing a lecture on the subject of “Ethical Challenges faced by Professionals in today’s world” – A Panel discussion. The video recording of the session can be viewed at the link https://youtu.be/CLHZaHTqUEw


2 comments on “Ethical Challenges Faced By Professionals In Today’s World – A Panel Discussion
  1. chetan karia says:

    Perfectly described by Shivram.

  2. S.G,Hegde Advocate says:

    I am also student of Sidhartha college of law . Patil sir has taught me the taxation subject . Initially I started practice on general law . It is because of Patil sir I had the opportunity to practice taxation . Patil sir has introduced me to H. S .Parikh & co Chartered Accountants . Now I am practicing independently on taxation . I consider Patil sir as my Guru. I admire great qualities of Patil sir . He is a true professional and role model to young generation of tax professionals who desire to practice without compromising on value and ethics of the profession

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