Circular No. 125

879. Court fee or stamp duty payable on power of attorney or vakalatnama filed before Income-tax Officer/on applications or petitions filed before Commissioner and other income-tax authorities

What this is

Circular No. 125 was issued by the Central Board of Direct Taxes on 26 November 1973. Its subject is 879. Court fee or stamp duty payable on power of attorney or vakalatnama filed before Income-tax Officer/on applications or petitions filed before Commissioner and other income-tax authorities.

This is a clarification. The Board is stating how it reads a provision. That reading binds the department; it does not bind a court, and where the section says otherwise the section wins.

What it does

Settles what stamp or court fee a power of attorney filed by a chartered accountant or income-tax practitioner before an income-tax authority must bear. The Board's position, laid down in its circular of 18 May 1958 and reiterated in 1968, is that a document authorising a person who is not a pleader or mukhtar duly appointed under section 7 of the Legal Practitioners Act, 1879 is not a vakalatnama or mukhtarnama at all; it is a power of attorney and must be stamped under the Stamp Act as in force in the area, with its local amendments, and not under the Court Fees Act. On the Institute of Chartered Accountants of India's representation, the Board reconsiders and holds that those instructions continue to apply in all charges except the Punjab charges. In the Punjab charges, the letter of authorisation filed by an income-tax practitioner or chartered accountant before an income-tax authority is to be governed by the Court Fees Act, in view of the decision of the erstwhile Punjab Chief Court in Ganpat v. Prem Singh [1912] 15 IC 122.

Why it was issued

The Institute of Chartered Accountants of India asked the Board to reconsider its instruction that a power of attorney in favour of a chartered accountant must be stamped under the Stamp Act. The Board had earlier declined to change the position after the Bombay High Court decision at Nagpur in L.M. Mahurkar v. STO [1967] 66 ITR 561, which had treated the sales tax authority as a revenue court, and had decided to hold to the 1958 instruction until a contrary decision came.

Who it reaches

Chartered accountants and income-tax practitioners filing authorisations before income-tax authorities
Assessees whose representative's authority is objected to for want of proper stamp
Practitioners in the Punjab charges, who are on the Court Fees Act footing
Income-tax authorities accepting or rejecting a letter of authorisation

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.7	s.7

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

879. Court fee or stamp duty payable on power of attorney or vakalatnama filed before Income-tax Officer/on applications or petitions filed before Commissioner and other income-tax authorities
CLARIFICATION 1
1. The Institute of Chartered Accountants of India have represented to the Board requesting for reconsideration of its earlier instructions that a power-of-attorney in favour of chartered accountants was required to be stamped in the manner prescribed in the Stamp Act.
2. The issue raised by the Institute of Chartered Accountants of India was considered earlier in the Board’s Circular No. 9 (XL-48) of 1958, dated 18-5-1958 and No. 3-P(LX-69) of 1968, dated 20-2-1968 [printed here as Clarifications 3 and 2]. In the Circular of 1958 the Board directed, after a very careful consideration of the question whether accountants and income-tax practitioners should file vakalatnama or power-of-attorney and, if the latter, what were the scales of court fees or stamp duty leviable thereon:
"A document purporting to authorise a person who is not a pleader or mukhtar duly appointed under section 7 of the Legal Practitioners Act, 1879, is not a vakalatnama or a mukhtarnama and requires to be stamped as a power-of-attorney under the Stamp Act. Therefore, the power-of-attorney in favour of registered accountant or an income-tax practitioner or any other person who is not a duly appointed mukhtar under section 7 of the Legal Practitioners Act is a power-of-attorney (and not a vakalatnama or mukhtarnama) and requires to be stamped not under the Court Fees Act, but under the provisions of the Stamp Act as in force in the particular area, i.e., subject to the local amendments."
These instructions were reviewed in the light of the judgment of the Bombay High Court (Nagpur Bench) in the case of L.M. Mahurkar v.STO [1967] 66 ITR 561, wherein it was held that the sales tax authority was a revenue Court and the letter of authorisation presented before it should be governed by the Court Fees Act and not by the Indian Stamp Act. The Board were advised that no reconsideration of the earlier instructions was necessary and that the instructions contained in Circular of 1958 may continue to be followed till there was a contrary decision from the Courts. In the Circular of 1963, therefore, the earlier instructions were reiterated.
3. In the light of the representation made by the Institute of Chartered Accountants of India the matter has again been considered carefully. The Board are advised that the existing instructions may continue to be followed in all charges except the Punjab charges. Insofar as the Punjab charges are concerned the letter of authorisation presented by the income-tax practitioners and chartered accountants before the income-tax authority may be governed by the Court Fees Act in view of the decision of the erstwhile Punjab Chief Court in Ganpat v. Prem Singh [1912] 15 IC 122 wherein it was held that the power-of-attorney empowering any person to represent another in a civil court should be governed only by the provisions of the Court Fees Act and not by the Stamp Act.
Circular : No. 125 [F.No. 274/1/73-ITJ], dated 26-11-1973.
CLARIFICATION 2
1. In the case of L.M. Mahurkar v. STO [1967] 66 ITR 561, the Nagpur Bench of the Bombay High Court have held that as sales tax authority is a revenue court, the letters of authorisation presented before it should be governed by the Court Fees Act and not by the Indian Stamp Act. A question has been raised whether following this decision, letters of authorisation to be presented by income-tax practitioners and chartered accountants before an income-tax authority should be governed by the Court Fees Act or by the Indian Stamp Act.
2. The Board are advised that the instructions contained in Circular No. 9(XL-48), dated 18-5-1958 [printed here as Clarification 3] may continue to be followed until there is a contrary decision from the Supreme Court.
Circular : No. 3-P(XL-69), dated 20-2-1968.
CLARIFICATION 3
After the issue of the Board’s Circular No. 50 (XL-43) of 1956, dated 28-12-1956 [printed here as Clarification 5], the question has been raised whether accountants and income-tax practitioners should file vakalatnamas or powers-of-attorney and if the latter, what the scales of court fees or stamp duties were leviable thereon.
The Board have been advised that a document purporting to authorise a person who is not a pleader or mukhtar duly appointed under section 7 of the Legal Practitioners Act, 1879, is not a vakalatnama or a mukhtarnama and requires to be stamped as a power-of-attorney under the Stamp Act. Therefore, the power-of-attorney in favour of a registered accountant or an income-tax practitioner or any other person who is not a duly appointed mukhtar under section 7 of the Legal Practitioners Act is a power-of-attorney (and not a vakalatnama or mukhtarnama) and requires to be stamped not under the Court Fees Act, but under the provisions of the Stamp Act as in force in the particular area, i.e., subject to the local amendments.
Circular : No. 9 (XL-48), dated 18-5-1958.
CLARIFICATION 4
A question has been raised as to which of the applications or petitions presented before the Commissioner of Income-tax and the Central Board of Revenue are liable to Court fees as per item No. 3 of the Schedule annexed to the Board’s Circular No. 50(XL-43), dated 28-12-1956 [printed here as Clarification 5].
The Board have been advised that all applications or petitions or representations which invoke any jurisdiction, authority, power, discretion, etc., whether real or supposed, vested in the Commissioner of Income-tax or the Central Board of Revenue under the Income-tax Act or any other Act, shall be liable to court fee under article 1(c) of Schedule II to the Court Fees Act, 1870. Applications or representations which are in the form of complaints such as excessive delay in disposal of any matter, ill-treatment, etc., which are not strictly referable to any provisions in the Income-tax Act or any other Act, would not be liable to court fee. There would, of course, be borderline cases when allegation regarding misconduct, etc., form the grounds of an application or a petition for exercising any jurisdiction, etc., vested in the authority concerned under the Income-tax Act. Such cases would be liable to court fee under article 1(c) of Schedule II to the Court Fees Act, 1870.
In order to illustrate the above classification, the following illustrations are given :
A. Liable to court fee :
(a) applications for stay of recovery or for grant of instalments for payment of tax ;
(b) applications for compromise assessments or for issue of directions to Income-tax Officers when assessments are pending ;
(c) applications for transfer of cases from one Income-tax Officer to another ;
(d) applications for hearing or for adjournment in connection with sections 33A and 33B proceedings ;
(e) applications under section 23A and subsequent applications for adjournments, etc. ;
(f) applications for recognition of provident funds ;
(g) applications for rectification of mistakes, under section 35 of the Income-tax Act, in the orders of the Commissioner or Income-tax ; and
(h) applications for remission of post-certificate interest (or cost) demanded by the Certificate Officer.
B. Not liable to court fee :
(a) petitions requesting for directions to the Income-tax Officer about undue delay in the issue of refunds ; and
(b) complaints and representations against harassment caused by the Officers of the Income-tax Department.
The above illustrations are by no means exhaustive. The Commissioners, however, need not be unduly meticulous in this matter and in doubtful cases the discretion should always be exercised in favour of the assessees.
So far as petitions under section 33A are concerned, the exemption from court fees, as mentioned on page 542 of the Income-tax Manual, Part III (10th edition), will continue.
Circular : No. 36 (XL-52), dated 19-11-1958.
CLARIFICATION 5
A question has been raised as to what are the current amounts of court fees payable on applications and other documents presented before the various income-tax authorities. The Board have been advised that court fees on documents presented before the income-tax authorities are chargeable according to the scales laid down in the Court Fees Act, 1870 and the amendments made in different States are not to be taken into consideration. The amounts of court fees payable at present on various documents filed before the various income-tax authorities in all the charges of the Commissioners of Income-tax are shown in the Schedule annexed hereto.
SCHEDULE
SHOWING THE AMOUNTS OF COURT FEES PAYABLE ON VARIOUS DOCUMENTS PRESENTED BEFORE THE INCOME-TAX AUTHORITIES

Sl. No.

Nature of the Document

Income-tax authority

Provision of Court Fees Act, 1870

Amount of court fees payable Rs

1

2

3

4

5

1.

Vakalatnama

Income-tax Officer,

Art. 10(a)

8/-

Inspecting Assistant Commissioner, Appellate Assistant Commissioner, Commissioner of Income-tax, Central Board of Revenue

Of Sch. II

1/-

2/-

2.

Application obtaining copy of any order passed by IT authorities or any other document on the record of the IT authorities

Art. 10(b) of Sch. II Art. 10(c) of Sch. II Art. 1(a) of Sch. II

1/-

3.

Application other than an application for copy of any order (passed by IT authorities) or of any other document on the record of the IT authorities when presented to the CIT or CBR

Commissioner of Income-tax, Central Board of Revenue

Art. 1(c) of Sch. II

1/-

4.

Certified copy of any order of the IT authorities (not for private use nor intended for filing before the ITAT)

Art. 6 of Sch. I

8/-

5.

Certified copy of any other document on the record of the IT Department (not for private use)

Art. 9 of Sch. I

8/- for every 360 words or fraction thereof

6.

Memorandum of Appeal

Appellate Assistant Commissioner of Income-tax, Central Board of Revenue

Art. 11(a) of Sch. II

8/-

2/-

Circular : No. 50(XL-43) of 1956, dated 28-12-1956.

What to watch

Stamp duty is a State subject in effect here: the circular says the Stamp Act as in force in the particular area, subject to local amendments, so the amount is not uniform across the country.
The Punjab charges are the single exception carved out, and it rests on a Punjab Chief Court decision that the circular itself names.
The distinction turns on the representative not being a pleader or mukhtar appointed under section 7 of the Legal Practitioners Act, 1879; a lawyer's vakalatnama is a different document.
The instruction is built on the 1958 and 1968 circulars it reproduces and on the statutes as they then stood, including the Legal Practitioners Act, 1879, so check the stamp law of the State as it now reads before acting on the amount.

Where you meet it

At the counter when a letter of authorisation is returned for insufficient stamp before an Income-tax Officer or a Commissioner.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 42/2022 [F. No. 370142/10/2022-TPL] / GSR 309(E) — Ministry of Finance 22 April 2022
Notification No. 72/2021 [F. No.300196/15/2020-ITA-I] / SO 2246(E) — Ministry of Finance 9 June 2021
Notification No. 79/2018 [F.No.370149/194/2017-TPL] / SO 5675(E) — 6598 Gi/2018 (1) 12 November 2018
Notification No. 80/2018 [F.No.370149/194/2017-TPL] / SO 5676(E) — New Delhi Bench of the Adjudicating Authority appointed under section 7 of the said Act shall exercise jurisdiction unde 12 November 2018
Notification No. 8/2016 [F.No.196/32/2014-ITA-I] / SO 530(E) — Ministry of Finance 19 February 2016
Notification No. 12/2012 — Section 10(46) of the Income-tax Act, 1961 - Exemptions - Statutory Body/Authority/Board/Commission - Notified body or a 28 February 2012

← Circular No. 126 · Circular No. 124 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.