Revised schedule of fee of standing counsels and guidelines regarding their appointment appraisal etc. - Income Tax - 1806/1989

INSTRUCTION NO. 1806/1989 Dated: February 3, 1989 Reference is invited to Board's letter No.C.18015/70/78-Ad. IX dated 15.3.1980 by which uniform rates of fees were prescribed in respect of standing counsels of I.T. Department before various High Courts. Several representations have been received regarding revision of schedule of fees, pointing out that the fees payable to the counsels at present are inadequate and hardly compensate for the labour time and energy consumed in defending the cases. Also the fees for other Central Government counsels have already been revised by Ministry of Law. Therefore, the Ministry of Law have been consulted in the matter and their concurrence obtained to the revised schedule of fees. 2. The President is pleased to sanction *revised terms and conditions of fees and allowed payable to the Senior Standing Counsel/Standing counsel and Junior Standing Counsel of the Department, as annexed hereto. The revised schedule will come into effect from 1..1.1989. 3. This issues with the concurrence of Ministry of Law and Justice vide their Disp. No.3837/88 dated 17.10.1988, Judicial Section. 4. For the benefit of the field formations *guidelines regarding appointment of the counsels, renewal of their terms and *the appraisal of their performance, are enclosed herewith. These guidelines may be brought to the notice of concerned officers in your region. ANNEXURE-I APPOINTMENT AND RENEWAL OF TERMS OF STANDING COUNSEL. Appointment of counsels 1.1 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 request the Chief Justice of High Court concerned to propose names of 3 or 4 advocates for making appropriate selection. The Chief Commissioner shall then forward to the Board the names of the advocates proposed by the Chief Justice, their bio-data alongwith his own recommendations in order of preference. The proposal for engagement must give particulars of age, standing and experience of the advocate, his consent to terms of engagement and opinion of Chief Justice about his suitability. The terms and conditions of engagement should be in accordance with the revised terms and conditions applicable to them w.e.f. 1.1.1989. Since large revenues are at stake in Revenue cases, 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 counsel is normally made for a period of one year. FEES AND ALLOWANCES 1. 2 The fees and allowances for senior standing counsels/standing counsels are given in Annexure-II, counsel only. The fees payable to junior standing counsels are 1/3rd of the fees payable to senior standing counsel in respect of the work done by the particular Junior Standing Counsel. RENEWAL OF APPOINTMENT 1.3 Fresh proposal 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 existing terms. The renewal of the terms of counsel can be made for a period of 3 years, if his performance is otherwise suitable, before making recommendation for renewal of appointment of the counsel, the Chief Commissioner should invariably make an evaluation of the performance of counsel during the preceding term. The opinion of Chief Justice and the concerned High Court should also be taken before sending the proposal for renewal of terms. It should be noted that the time limit for sending proposals for engagement of counsels or continued engagement of existing counsels is now fixed as three months before the expiry of term of present incumbent. The Finance Minister and also the Law Minister is not in favour of giving post facto approval. PERFORMANCE APPRAISAL 1.4 The counsel before the various high Courts defend our cases involving large stakes of revenue. It is necessary that all assistance is given to them in respect of cases to be defended by them. The performance of the counsels should also be evaluated every year. The Board has prescribed a proforma for the annual review of appellate orders for the period ending on 30th June every year vide Instruction NO 1780 dated 4th November, 1987 which gives an idea about the success rates and also about the cases requiring prompt attention with a view to reduce litigation. The Chief Commissioners are required to send the performance appraisal of the standing counsel in the proforma given in Annexure-III for the period ending on 30th June every year, by 30th September so that it could be utilised at the time of renewal and their suitability evaluated. INCHARGE OF LITIGATION AND ALLOCATION OF CASES TO COUNSEL : 1.5 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 to DG (Inv), the DG concerned will be incharge. Allocation of cases to the counsel may be made by the Chief Commissioner/DG or by a Commissioner authorised by them or by the senior standing counsel, if so authorised. PERIOD OF APPOINTMENT/RENEWAL : 1.6 The term of appointment/empanelment of the counsel would be for a period of one year in the first instance, which may be extended for a further period not exceeding 3 years, at the discretion of the Government of India. The appointment/empanelment of the counsel would be terminable on one month's notice in writing on either side. DUTIES OF COUNSEL : 1.7 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 Supreme Court, other High Courts, ITAT and the CsIT (Appeals). 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 : 1. Examination and settling of drafts of legal nature. 2. Examination of trust deeds and draft rules of provident funds for recognition, and 3. 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 filing 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 Court, 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 judgment etc. vi. Furnishing to the Department periodical statements and reports/returns which may be called from time to time. RIGHT TO PRIVATE PRACTICE: 1.8 The counsel will have the right of private practice, which should not however, interfere with his efficient discharge of the work of the Department but he shall not advise, hold brief or appear against the Department, before any authority, tribunal or court in matters under the statutes relating to direct taxes. ANNEXURE - II SCHEDULE OF FEES AND ALLOWANCES 2. The fees payable to the Standing Counsel would be as follows subject to general guidelines : A. For appearance in the High Court of Judicature For Reference: Rs. 750/- per case irrespective of number of appearances. For applications: Rs. 350/- for each application or a batch of applications involving indentical question under section 256(2) of the Income-tax Act, 1961. Writs : Rs. 750/- per case. However, if the hearing goes on for more than 3 days, an additional fees of Rs. 250/- per day for every additional day (not exceeding three in number) may be paid as refresher fees. Certificate of Fitness : Rs. 300/- for each application. For civil or criminal revision petition : Rs. 350/- per petition. For drafting pleadings, written statements in suits, counter affidavits/returns/answers to the written petition, grounds of appeal, application for leave to appeal to Supreme Court : Rs. 250/- per pleading etc. If substantially identical affidavits, written statements etc. are drafted in connected cases, only one drafting fee will be payable in the main case and no separate drafting fee will be payable in connected cases. Written opinion : Other than referred in para 1.7(iii) of Annexure I : Rs. 150/- per case. Retainership : The senior standing counsel will be entitled to retainership of Rs. 750/- per month. The additional standing counsel will not be entitled to any retainership. Interlocutory matters : A fees equal to 5% of the fee admissible per case will be paid in connection with interlocutory matters relating to the case. Clerkage : Clerkage or incidental expenses at the rate of 10% of the hearing fee subject to a maximum of Rs. 450/- in a case or batch of case before High Court. B. For Appearance before other courts, ITAT etc. a). At headquarters : Same as payable before the High Court, b). At other places : Entitled to a daily fee of Rs. 400/- plus travel expenses for travel by air/rail fare as admissible to Grade I/Class I officers of the Government. Rs. 100/- as conveyance charges for local journey and actual expenses for stay in hotel subject to a maximum of Rs. 200/- per day. 3. General : The rate specified above are primarily applicable to income-tax cases but will apply mutatis mutandis to cases relating to other direct taxes. In all cases effective appearance is necessary for the counsel to claim fee. 3.1 No fee will be payable in cases where no legal work is required to be done, for example, cases in which interest of Department is to be watched pending instructions or the cases regarding transmission of record to the Supreme Court, inspection of the Court record for ascertaining the position of the case or other information needed. 3.2 If the counsel appears at the instance of Union of India/for parties other than Union of India/whose scales are not inconsistent with that the Union of India/he will be entitled to only one set of fees. 3.3 Appeals, Revision, or petitions arising from one common judgment or order will be together considered as one case if they are heard together. 3.4 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. 3.5 No fee will be payable to the counsel if an advance notice about the adjournment has been issued or the adjournment of the case has been made at his request due to the reasons personal to him. 3.6 When two or more cases involving substantially identical questions of law or facts, any one of such cases will be treated as a main case and the others as connected cases and the fees in such cases will be regulated as under, irrespective of the fact whether all the cases are heard together or not :- a. 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 fee in the main case and Rs.25/- in each of the connected cases. b. when the main case has been contested as in (a) above, but in the connected cases either affidavit or grounds of an appeal or petition similar to the one in the main case or nothing at all has been drafted by the Counsel, he shall be paid the full fee in the main case and Rs.50/- only in each of the connected cases. c. when substantially different affidavits are drafted in each connected case but all the cases are disposed of without contest, the Counsel shall get 1/3rd fees in the main case and Rs.50/- in each of the connected cases. d. when the Counsel has drafted the affidavit, petition or ground of appeal in the main case and has not drafted them in the connected cases or the drafts in the connected cases are substantially similar to the one in the main case and the cases are disposed of without contest, the Counsel shall get 1/3rd fee in the main case and Rs.25/- in each of the connected cases. 3.7 The fee 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 / judgment where it is necessary in case the claim is for appearance fee. The Counsel shall submit his fee bills within three months from the date on which the fee has accrued. 3.8 The fee will be payable in two stages : firstly, 1/3rd fee after substantial action has been taken i.e. first stage and secondly the remaining 2/3rd fee after the case has been decided i.e. second stage. Provided, however, where during the pendency of a proceeding a Counsel is changed for some reason or the other a fee commensurate to the work done by the outgoing Counsel, not exceeding 1/3rd of the total fee admissible for the case, may be paid. In such an event the balance of fee payable in the case will be paid to new Counsel after completion of the case. 4. The various terms used in the scheme will have the following meaning : 4.1 Effective hearing : A hearing in which either one or both the parties involved in a case are heard by the Court is an effective hearing. If the case is mentioned and adjourned or only directions are given or only judgment is delivered by the Court, it would not constitute an effective hearing but will be termed as non-effective hearing. 4.2 Uncontested cases : All cases are deemed to be uncontested if these are withdrawn by the plaintiff / appellant or are dismissed in limine or are otherwise decided by the Court ex parte before the final hearing. No writ petition / revision petition / 2nd appeal (including any interlocutory application connected therewith) will be considered as uncontested if it is decided by the Court on preliminary legal objections or is withdrawn by the petitioner / appellant at or during any stage of the final hearing or is withdrawn by the Government at the time of its admission. 4.3 Substantial work : When the case has been admitted by the Court after hearing of preliminary objections or filing of the affidavits / counter affidavits etc. by the counsel, substantial work will be deemed to have been done. 4.4 Identical cases : Identical cases mean two or more cases in which substantially identical questions of law or facts are involved and when the main difference is in the names, addresses of the parties concerned, amount of money involved etc. or where the common or identical judgments are delivered irrespective of the fact whether all the cases are heard together or not.