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TMI Blog1956 (7) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounting periods ending on 31-3-1945 and 31-3-1946. THE appeals had been filed through 'Messrs. Orr Dignam and Company, but subsequently. Mr. Basu abandoned that very reputed firm of solicitors for Green & Co., because he was led to believe by a friend that it would be more advantageous to him to requisition the services of. the Chartered Accountants. About the motives which led Mr. Basu to change an Attorney for an Accountant, I shall have to say something later It appears that after Mr. Basu had established contact with Green & Co., which meant, Mr. P.K. Mukherji, he put the terms of the engagement into writing by a letter written by him on 14-1-1953. In that letter he stated that he expected relief to the extent of ₹ 1,45,326-1-9 and that the task of the Accountant would be to "get relief of the above sum." "On your getting the said relief," the letter proceeded to say, "for the above full amount you will be paid a fee at ten per cent of the above sum." Along with that letter s, cheque for ₹ 1,000/- was enclosed. 2A. Mr. Mukherji acknowledged receipt of Mr. Basil's letter by a reply, dated 21-1-1953 and informed him that he w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard on 10-9-1953. That was the date which he gave in his letter to the respondent of 25-11-1954 and also in his letter to the Secretary of the Institute of Chartered Accountants of 10-12-1954. I am not quite sure that the date thus given by the complainant was correct, but whatever the correct date was, the appeals were heard before 12-9-1953, when orders were passed. By the orders, the Tribunal gave the complainant relief to the extent of ₹ 1,08.576,- which was very near to the sum of 1.08.000/- estimated by the respondent and who must be held to have made a remarkably close guess. There were two letters, one from the respondent to the complainant and one from the complainant to the respondent, immediately before the hearing of the appeals to which I shall have to advert later. . At the present moment, I would pass on to the beginning of the dispute between the parties, so far as it appears from the letters on the record. (4.)It appears that on 8-5-1854, which was about eight months after the appeals had been disposed of, the respondent addressed a letter to the complainant by which he recalled his own letter of 11-3-1953 and while referring with evident satisfaction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endance in their order. The respondent then proceeded to give an account of the enormous labour he had undergone in preparing the case and ended by saying that if the complainant was not prepared to pay in accordance with his letter of 14-1-1953, he might let the respondent know whether he would prefer the respondent sending a bill as per the scale sanctioned by the Institute of Chartered Accountants which was ₹ 150/- per diem. The alternative claim thus made, was a claim of fees for eight months, calculated at the rate of ₹ 1507- per day. The complainant's reply to the respondent's letter was dated 25-11-1954. He repeated his charge that the respondent had failed to appear at the 'hearing of the appeals, but was by now using the language of legal accusation. He said that the respondent had failed to fulfil his professional obligations and that having failed in that regard, was not entitled to any payments. There was some reference to what had transpired during two visits paid by the respondent to the complainant at a time when he was lying ill at Barranagorel, but I do not think it necessary to refer to those details. The complainant ended by saying that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the end of the complaint were that the respondent had failed to discharge his professional obligation in handling the complainant's cases and that not only had he obtained a sum of ₹ 8,250/-from the complainant by wrongful representation, taut that he had also tried to obtain a larger sum by holding out threats. On receipt of the complaint, the Institute called for a written statement from the respondent. He filed one in due course. Briefly stated, his case was that he had been engaged in the first week of December to go through the papers with a view to ascertaining whether in his opinion there was any chance of getting any relief from the Income-tax Tribunal. After a preliminary examination had been made, the respondent asked the complainant to state what relief he expected and in reply the complainant had informed him that he expected a total relief of ₹ 1,45,326-1-9 and offered to pay a remuneration of 10 per cent of the expected relief. The respondent it was stated, had protested that he could not accept any remuneration on a percentage basis and ultimately a lump sum fee of ₹ 14,000/- to be paid with the gradual progress of the work had been agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the respondent a second chance o appearing before it after the conclusion of the hearing and fixed 13-8-1955, for the purpose, the respondent did not yet appear. At the hearing before the Committee, the complainant examined himself and Mr. Sukumar Mitra. They were cross-examined at length by Mr. T.K. Ghose who represented the respondent. (8.)The charges which the complainant made against the respondent were that he, having accepted an engagement for good consideration to appear at the hearing of the appeals, had failed to do so and, secondly, that he had not only obtained a large sum of money by false representation, but had been trying to obtain even larger sums by means of threats. To those two charges, the Disciplinary Committee added a charge of its own based on facts which had transpired. It found that according to the complainant, the respondent had charged fees at a certain percentage of the expected relief and that circumstance, the Committee thought, furnished the basis for a further charge of misconduct. In the end, the following three charges were framed:- "(a) The respondent had failed to discharge his professional obligations to the complainant. (b) The resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atute has limited the misconduct contemplated by it to certain specified varieties and if an Accountant is to be found guilty of misconduct as known to the Act, he must be shown to have been guilty of one or another of the specified types of misconduct described in the statute itself. Even a cursory examination of the Schedule would show that it by no means covers all possible varieties of misconduct for which' a professional man would seem to deserve reprobation or punishment, but the statute has thoughtfully provided a residuary clause in item (v) of the Schedule and given the Council itself power to add to the types of misconduct which the Schedule enumerates and sets out. It might be useful for the Council to pay some attention to this matter and try to specify as many other varieties of misconduct as might together with those described in the Schedule, reasonably cover all types of unworthy conduct that could ordinarily be expected to be met with in the profession. Be that as it) may, the comment I desire to make on the present occasion is that the Council's finding is of very little assistance to this Court. According to it, the respondent has been guilty of "mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mitra himself stated that if the respondent had been present at the hearing of the appeals, he would not have known him. Neither was the respondent present before the Disciplinary Committee, so that it was not as if he was pointed out to Mr. Mitra and Mr. Mitra was asked whether he had seen that person at the hearing of the appeals. To ask Mr. Mitra whether he had seen a man, totally unknown to him before the Appellate Tribunal, was to ask a question which was almost comical. All that Mr. Mitra, in my view, could possibly say was that he did not sec anyone at the hearing of the appeals, who, in his View, could possibly be the respondent. It is to be noticed that besides naming certain persons who were present. Mr. Mitra adds that there might have been one or two trainees. The trainees, if there were any there, would not "be known to Mr. Mitra personally and if there was thus the possibility of there having been one or two persons, not known to Mr. Mitra, the respondent might well have been one of them. I am, therefore, of opinion that Mr. Mitra's evidence, although the whole of it must be accepted, is by no means conclusive. At the same times, it appears to me that It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeals. I would now refer to them in detail. According to the complainant, the appeals were heard on 10-9-1953. About a week before that or at least three or four days earlier, he had come to know that the respondent had let him down and he had been forced to seek the assistance of Counsel on his own account at considerable expense to himself. If that story be true, the respondent bad by that time thoroughly condemned himself in the eyes of the complainant as a man who had broken his professional faith and who had landed the complainant into a terrible difficulty. Yet, one finds that On 8-9-1953, the respondent was coolly addressing a letter to the complainant and asking him for a payment of ₹ 1750/- which, he said, would be the balance of ₹ 10,000/- that would be his due, even if a relief of ₹ 1.00.000/- only was granted. The letter states that the writer is convinced that a relief of a minimum amount of ₹ 1,50,000/must be obtained and he adds that the judgment is likely to reach the Calcutta Bench from Allahabad by the end of the current Week. This letter, written on 8-9-1953, gives one the impression that the hearing of the appeals had already tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason or other, the complainant had broken off with the respondent and no longer expected him to appear at the hearing of the appeals. Similarly, the respondent did not think that he was any longer required to appear before the Tribunal. There might have been previous defaults on the part of the respondent which had brought about that change in the relationship between the parties, but in view of the complainant's letter of 9-9-1953. I find it wholly impossible to believe that he was still expecting the respondent to appear on his behalf or that, in his view, the respondent had played false with him at the last moment. If then the respondent was no longer expected or required to appear, whatever might have been the reason which created that position, there could be no charge against him of having failed to discharge his professional obligations to the complainant by failing to appear at the hearing of the appeals. The first charge against the respondent must, therefore, be held to have not been proved. The Disciplinary Committee, in coming to a contrary finding, did so without considering the significance of the two letters of the 8th and 9th September. 1953. With regard to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier than one day before the 14th of January, 1953. Yet, the power of attorney executed by him in favour of the respondent bears his signature over the date, 29th of December, 1952, put down by himself. aS regards the date when he came to know that the respondent had let him down, he put it as the date immediately preceding the day on which the appeals were due to be heard in his letter to the Secretary. In his deposition before the Disciplinary Committee, ha stated that he had seen Mr. H.L. Sarkar two or three days before the hearing of the appeals and that Mr. Sarkar had said that he had already-read the papers. Unless he had gone to Mr. Sarkar even earlier, I cannot see why Mr. Sarkar should have read his papers at all. It is true that he had been in the case at the earlier stages, but if, as the complainant himself would insist, he had entrusted the charge of the appeals to the respondent and was relying on him for appearing in and arguing them, there could be no reason for Mr. H.L. Sarkar gratuitously reading his paper for no purpose at all. It would, therefore, seem that the complainant was not giving a wholly correct or truthful account as to the time when he came to know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the offensive basis of calculation was adopted for fees charged by a Chartered Accountant for his own services. 30a. I do not think that the fees charged by the respondent in the present case can at all be dissected in the manner suggested by Mr. Moitra. As between the complainant and the respondent, the stipulation was that the respondent would receive 10 per cent, of such relief as might be obtained and even if the high percentage had been agreed to in recognition of the fact that Counsel would have to be paid for, the stipulation still was that the respondent would receive 10 per cent, by way of his fees and the fact that out of those fees he would nave to incur expenditure in order to procure further assistance from another branch of the profession, would not alter the nature of the bargain at all. What we have to pay regard to is the stipulation as between the complainant and the respondent; how much was the respondent charging from the complainant for the services proposed to be rendered by him and on what basis was he charging it? It might be that in reaching the figure charged or the scale at which the fees were to be charged, the parties had taken into account expenses wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was not functioning as a Chartered Accountant, he could not possibly have claimed from the complainant fees at the rate of ₹ 150/- per diem as per sanctioned scale of the INstitute of Chartered Accountants, as he did by his letter of the 10th of November, 1954. Really, it is not open to Mr. Moitra to raise that contention at the present stage. Before the Institute, when filing his written statement and before the Disciplinary Committee in the course of the enquiry, there was not the slightest hint at: any time that the respondent was making the case that he had not purported to function and had not in fact functioned as a Chartered Accountant in the transaction with the complainant but had done so in some other capacity. Indeed in paragraph 5 of the annexure to the complaint in Form P, the complainant alleged that the respondent's firm had "failed to discharge their professional obligation in handling my cases". The respondent dealt with that paragraph of the complaint in paragraph 5 of his additional written statement and nowhere did he seek to controvert the allegation--apart from whether he had failed to discharge his professional obligations--that the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It will be noticed that the various types of representatives whom Section 61(1) of the Income-tax Act recognises are recognised because of the particular character they bear or the particular profession to which they belong. An Accountant is recognised as a competent representative on the ground that he is an Accountant, from which, to my mind, it follows that when representing an assesses before the Appellate Tribunal or any other Income-tax authority, a Chartered Accountant practises his profession of accountancy in one of its, aspects. The word 'accountant' is defined in Clause (iii) of sub-s. (2) of Section 61 and it is somewhat curious that !n spite of the enactment of the-Chartered Accountants Act, the definition given there has not been amended. In any event, the definition contains a reference to 'Accountants enrolled under the Auditors Certificate Rules, 1932, and the res pondent before us was an Accountant, so enrolled, before he became a Chartered Accountant by the operation of the Act. It is thus as an Accountant that he figures in the contemplation of the Income-tax Act. If one turns next to the Chartered Accountants Act and tries to find out from there wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t;There is nothing in this rule", I said, "to indicate that duties in connection with the various offices in the approved list, when performed, will be performed in the professional capacity of Chartered Accountants". That remark is undoubtedly correct so far as a liquidator, trustee, executor, arbitrator or receiver is concerned, but on further consideration I think that it requires to be modified in so far as it relates to functioning as a representative in a taxation matter. Such functioning would be in the capacity of an Accountant by reason of the express provision contained' in Section 61(1) of the Act and accordingly it seems to mp that there is no room for MR. Moitra's contention that the respondent had not functioned in; his professional capacity of an Accountant. Indeed, it would seem clear from Sub-section (3) of Section 61 that any Accountant who may be guilty of misconduct in connection with Income-tax proceedings will be amenable to the jurisdiction of the Institute of Chartered Accountants and such misconduct would thus be within the ambit of the Chartered Accountants Act. The sub-section provides that if any Registered Accountant is found gui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the respondent, but hold, in agreement with the Council, that the third charges has been established. (18.)The only question which remains is the order we ought td make. Under Section 21(3) of the Act, we arc to pass such, final orders as we think fit to pass. Mr. Moitra pleaded that there were several extenuating circumstances in the case and as instances of such circumstances, he referred to the volume of work which, according to him, the respondent had done in the interest of the complainant. There is no evidence before us of what work had been done by the respondent, but as isuming he had done a large amount of work, the volume of such work does not, in my view, constitute any extenuating circumstance at all. THE respondent, it ought to be remembered, is not being charged for having demanded excessive fees. The whole charge against him is that he charged fees on a basis which the Act forbids and which the profession disapproves. The evil which Clause (m) o the Schedule aims at striking down is not the charging of exorbitant fees from persons who require the services of Accountants, but the adoption of methods in charging fees, which involve a purchase by the Accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch he spoke. I . wonder if the complainant realised that the statement he was making was grossly defamatory of the Income-tax Appellate Tribunal and not very complimentary to himself. The picture he was painting of himself was that, as an assessee to income and excess profits taxes and an appellant against certain assessments, he was not prepared to trust merely the open method of submissions made by competent representatives on the merits of the cases, as they were, but he was capable of trying to harness underground forces which he believed might be profitably brought under requisition for influencing the Tribunal. When one remembers that admission, one begins to feel that the high fees agreed to be paid to the respondent were not offered, because they were intended to include fees of Counsel, as alleged, but because the complainant thought that he was buying underground influence which is always highly priced. The terms mentioned in the letter of the 14th of January, 1953, are not that the respondent would get 10 per cent, of whatever relief he might obtain, but that if the respondent succeeded in procuring the named relief of Rs, 1,45,326-1-9. he would be paid 10 per cent, of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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