Economic Times and ET Now reported that the Delhi bar council, after a written complaint by the Society of Indian Law Firms (Silf), has served written notice on the Big Four accountancy firms, PwC, Deloitte, KPMG and EY, for allegedly “engaging in the unauthorised practice” of law:
Following the individual complaints by SILF, the Bar Council of Delhi has issued notice to all four firms seeking replies on or before 7th August. The council has also directed firm representatives to be present in person on 7th August, 2015 failing which ex-parte orders will be passed.
The four chartered accountancy (CA) and consultancy firms all confirmed receipt of the notice to the ET and said they would respond in due course, while PwC said that it did not have a law practice in India.
The report did not specify whether the notice was a notice threatening legal proceedings or a simple warning under internal bar council rules.
The Madras high court ruled in 2012 that:
Oversight of the Bar Council on non-litigation activities of such law firms was virtually nil till now, and exploiting this loop hole, many accountancy and management firms are employing law graduates, who are rendering legal services, which is contrary to the Advocates Act.
No action against the CA firms has been taken to date. The government meanwhile has been making noises about allowing the entry of foreign law firms to India soon, to the chagrin of SILF
Comments
1. It was the Bar Council of India chairman, not the Delhi bar council that 'targeted' us.
2. The target implied was foreign law firms illegally practising law in India. While Modi pushes for liberalisation, SILF have taken the fight to CA firms after 3+ years of relative inaction on CA firms.
Possible speculative reasons?
a) Silf have given up on fighting foreign law firms?
b) They are fighting CA firms so that when / if foreign law firms come, foreign firms can't say, look here, why you singling us out, the CAs are much worse than us?
c) The tipping point has been reached where CA firms are eating so much of SILF members' lunch with transactional, etc work, that the referrals from the Big 4 are outweighed by what they take from law firms...?
Good move as most of these big 4 people employ CA(s) or inexperienced lawyers who have never seen a day arguing in court or written a proper legal opinion. These people only do cut and paste job from old opinions which are reviewed by equally incompetent managers who have no idea of how the law practically works or are possibly not even lawyers (CA(s)/ cost accountant etc).
basically hoodwinking clients (especially foreign clients) to make money by selling snake oil. Immeditetely should be sanctioned.
Gross mischief has been happening for a long time especially in the tax practices and needs to be curtailed asap.
Even recently there have been judgments by ITAT questioning the learnings and ethics of CAs.
One question may be put : Is there any segregation of advisory work of a CA and appearance by them before various tribunals?
Also what are the front end firms in Mumbai and Delhi for (with star litigators using Big 4 e-mail ids) if not for providing litigation services? Also look at comment 11 - in CESTAT / ITAT Vakalatnamas are being filed in the name of Big 4 itself rather than individual lawyers .....
I can count atleast 400 lawyers in 4 major India tax firms alone (80 in NDA, 80 in Vaish, 140 in LKS, 100 in BMR Legal - not to forget about 200+ in other big and small law firms) who not only can read balance sheet but explain you the legal implications pretty well .... Also reading balance sheet / P&L is one thing but suggesting such aggressive tax structures or handling assessments in such a way that it is bound to generate litigation work for your front end firms is another thing .... If USA or other developed country do this - segregation of legal and consulting or auditing and consulting, we will defend the move saying they are addressing conflict of interest... why object when an attempt is being made in India ...
I just wonder if you have received a BIG 4 invoice and if yes, can you still say it is less than "sky-high fees" charged by law firms ... a international law firm is much more affordable and reliable than Big 4 in India ....
Oh I wish us lawyers knew how to draft such engagement letters, disclaiming everything, certifying nothing.
I wish I could give an opinion to a client saying - yes this is possible, this is the maximum liability, but we could be wrong as the tax authority is off its head.
Apart from lawyers work, they are also cornering the magician's markets by selling magic structures that give their clients all they desire, riches beyond their wildest dreams. When dirty regulator uncle or crybaby lawyer says can't do sir, sorry regrets, etc., they make miraculous escape through disclaimer backdoors that lawyers only dream about.
I am reproducing verbatim, the 5-Judge Bench Order of the SC (September 25, 2014) in
TRANSFERRED CASE (C) NO. 150 OF 2006
Madras Bar Association …Petitioner(s)
versus
Union of India and another …Respondents
QUOTE
Keeping in mind the fact, that in terms of Section 15 of the NTT Act, the NTT would hear appeals from the Income Tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) only on ?substantial questions of law?, it is difficult for us to appreciate the propriety of representation, on behalf of a party to an appeal, through either Chartered Accountants or Company Secretaries, before the NTT. The determination at the hands of the NTT is shorn of factual disputes. It has to decide only ?substantial questions of law?. In our understanding, Chartered Accountants and Company Secretaries would at best be specialists in understanding and explaining issues pertaining to accounts. These issues would, fall purely within the realm of facts. We find it difficult to accept the prayer made by the Company Secretaries to allow them, to represent a party to an appeal before the NTT. Even insofar as the Chartered Accountants are concerned, we are constrained to hold that
allowing them to appear on behalf of a party before the NTT, would be unacceptable in law. We accordingly reject the claim of Company Secretaries, to represent a party before the NTT. Accordingly the prayer made by Company Secretaries in Writ Petition (Civil) no. 621 of 2007 is hereby declined. While recording the above conclusion, we simultaneously hold Section 13(1), insofar as it allows Chartered Accountants to represent a party to an appeal before the NTT, as unconstitutional and unsustainable in law.
UNQUOTE
By the above logic, these masqueraders should not be permitted to practice in ANY tribunal..
Hope you will publish this!