This article is written by Aditya Singh, from Symbiosis Law School, Noida.
The guest for this seminar was Sumit Kansal, who is a Corporate and Commercial lawyer based in New Delhi and his office name is Kansal Law Chambers, before practicing as an advocate in the Supreme Court he was a practicing Charted Accountant for an almost a decade. He got 96% in his 12th boards and was the State topper after which he completed his Graduation in the year 2010 from Shri Ram College of Commerce pursuing his CA degree along with his graduation in the very first year and completed his CA in 2011 in his first attempt, he is also a gold medalist in his law.
The host for this seminar was Ankit Vaid, who is a Senior Growth Consultant and Startup Growth Hacker at LawSikho which is a leading online company in India providing education through specialized courses and offering specialized and practical training in law. They bridge the gap in legal education between theory and practice through their custom training methods.
Q1. What was his first experience after completing Graduation and Charted Accountancy?
A1. After completing his Graduation, he was preparing for his CA attempt. At the time of his Completion of graduation he had completed his CA-Inter by then, which was known as Professional Competence Course (PCC), his final course was still remaining and his Article ship training was about to end. Once he completed his CA degree, he gave interviews and was campus placed with ICI with EY and he joined Ernst & Young.
He was in the Statutory Audit division of EY in Gurgaon and he worked with them for 1 year. He soon realized that auditing was not his Cup of Tea and since the very beginning he had more inclination towards E-Taxation and Company Law part of CA. It was then when he decided to go for studying full-fledged law. Since he was a young CA therefore, he did his CA practice accordingly, and, in the evening he attended his law classes. Though he had gotten into Delhi University and also got a very good rank in CLC but he later decided to complete his law from Punjab University in Chandigarh only and was a part of the 2013-16 batch there.
Q2. One of the most interesting cases he has encountered to date?
A2. One of his most interesting cases was that he was recently in NCLAT and he was appearing for the insolvency professional and IP of Ahmedabad. His side of the case was very strong and the other Counsel was representing the suspended directors of an insolvent company and the opposite Counsel was begging to the court, he was folding hands, so Justice Mukhopadhyay was there and he said that please don’t beg before the court. he said that you should win with a lot of self-esteem and courage and also to lose with courage. this is important because sometimes we feel that failure is there and we are not able to achieve this but all this is a part of life as at least from this you learn. this is always true especially for Chartered Accountancy and law also. CA study and law profession are both tough, when one group is left many people, he himself thought in the final year that it is a tough and difficult course.
But once you become a chartered accountant it becomes a little comfortable, but the life of a lawyer is very hectic, one might lose certain cases you win certain cases, ups and downs are there in the career, situations like Covid-19 are there which is proving to be very difficult for them and even some are losing courage, but these are all phases of life.
Q3. Is it necessary for litigation to have a CA degree?
A3. If somebody is going for becoming a corporate or a commercial lawyer, the CA course per se is not mandatory but it is recommended as it is useful and CA delves into the hard-core subjects of finance, of Commerce, of Corporate laws, of auditing or of forensics which is very useful. However, if somebody is not a CA it is not a precondition. A student from a science or medical background will obviously have difficulty in reading a balance sheet but if you are a bachelor in commerce or perhaps you are a CS inter that’s why are you can easily go in such kind of practice.
Q4. The most prominent tax lawyers of India such as Mr. Nani Palikhivala or Mr. Arvind P. Datar were not CA’s, so if a lawyer is not a CA how can he take up his taxation or corporate law practice? What is the importance of the commerce stream and Can a student of science or arts stream practice tax law?
A4. A degree which is in CA CS or CMA or any diploma which even LawSikho provides taxation courses contract law drafting courses these are important. but law is a field that includes both procedural as well as substantive law the lawyers are very well versed with the procedural laws but for substantive laws they definitely have to read. Taxation law is not an easy subject you have to delve deep, you have to put into certain years of practice, you have to find your niche, then only you can make a for the difference between a lawyer who is a CA and one who is not.
Tax Law is a difficult kind of law difficult in the sense because you deal with numbers you deal with calculations and at the same time, you deal with an interpretation of the law which in itself is humongous and a very complex law so a student who does not have a Commerce background therefore suggested and will feel difficult to go into tax practice and a student who is a Commerce graduate he will understand much better as to what is a balance sheet, what is a P&L, what are the financial statements, what is the basic procedure or system of audit at least he will have certain idea understand what is the difference between a cash system and an accrual system in this way he gets a good grip and can read some Income Tax also in his graduation.
Q5. What is the importance of an internship, if one wants to pursue tax law or corporate law, as all they do is not litigation part but mostly the compliance or the bookkeeping part?
A5. Compliance part of an internship is the basic groundwork part, for example, if we take criminal law you will be a good lawyer if you know about the trials in the Civil Courts, another example is if you want to do NCLT litigation and if you know how a company is incorporated, what is MOA, what is articles of association, if you know the board minutes then you get a good grasp over NCLT matters. Similarly, tax compliance filing of Returns if it is done or a senior gives you it is a very good kind of thing it should be taken in the right stride and the interns need to have a little patience as they need to learn the nuances of the taxation practice they need to know what are salaries, what are capital gains, what are PGBP, how is a charitable trust functioning, how are the different returns for a Charitable Trust or a company or a salary filed, because the case moves from the assessing officer level which is the income tax officer and then it elevates towards the Commissioner of Income Tax appeals which are the fact-finding authorities wherein the CS go and then it goes to the ITAT and from there to the High Court and Supreme Court so unless they have that base it is very useful which is why the seniors knowingly give these kinds of work to the juniors.
Q6. Where does the role of a Chartered Accountant and a Lawyer differ and which practice is more rewarding?
A6. A Chartered Accountant can go to the Income Tax Appellate Tribunal and the CSTAT now which is the GST Tribunal we cannot go to the High Court for which there is a license which is the license of Bar Council of India and CA has the certificate of practice (CA-COP). So, a CA would be having very good knowledge about return filing about assessment procedures what is Section 142 its working and all the ground level part and he can argue in its favor and if he has a good knowledge about the law part then it is effective. As far as the lawyers are concerned, he knows well about the laws what is the Indian Evidence act, what is the limitation act, how to peruse the judgments so he can be instrumental there.
As regards to the question as to what is more rewarding according to the guest speaker none of the practices are good none of the practice is bad both are very esteemed professions you can gain a lot of money and lot of ethical work you can do it solely depends upon your competency and upon your skillset.
Q7. Is the company secretary also a good option for law students to pursue?
A7. As far as CS is concerned, we can do the compliance part well he can do the filings on the MCA, formation of company, preparation of memorandum, articles, registration din which is the director identification number. it is again not mandatory but only recommendatory but if you have an inclination towards the company law side of the corporate practice then go for CS if you have an inclination towards taxation side then CA would be preferable because in CA both the direct and the indirect taxes are dealt with at vast and the SEBI regulations, FEMA guidelines and the matters related to shareholders are dealt by CS.
Q8. Tax and crimes relating to black money and money laundering.
A8. For white-collar crimes we have the Benami law we have PMLA we have black money, in these laws if you have a good base with taxation then only you can very well function in the black money act. money laundering is something which is earned through some illegal activity and then that money is Routed into something which is shown as legal for example in a Hawala transaction there is some illegal activity going on and tomorrow that money is invested in a plot or a residential house and rent is earned out of it would seem as if it is a legal kind of thing. Here the knowledge of Income Tax, knowledge of legalities, knowledge of the prevention of money laundering act, all culminates into one which is why taxation and legal knowledge go hand in hand here.
Q9. What is the importance of drafting in tax matters?
A9. It is very instrumental and important many CA struggle at this as there are notices coming from income tax officers to which they are not able to reply in a good manner, as they are good with numbers they know the technical skills well but to write it on paper in a simplified language which is in consonance with the question put up by the AO gets difficult for them and here lawyers can play a good role. drafting is a thing which is learned over time and with practice and this is not the case with just taxation drafting but with any kind of law, for example, the matter on hand is about Professional misconduct of Chartered Accountants, lots of CAs these days are getting notices from the Institute of Chartered Accountants of India. So, in these kinds of matters the drafting is done in a different manner because it is not a court as such it is an administrative body. Therefore, knowledge of what is professional misconduct, what is merely a negligence whether it amounts to professional misconduct or not all this comes into play and is necessary to have knowledge about drafting.
Q10. If a lawyer has to give an opinion to a client on tax-related matters what should be the basics of those drafts?
A10. First, understand what is the matter, for example, a client of the guest speaker had a matter relating to the merger of two entities and he wanted to know about the MAT applicability which is the Minimum Alternate Tax as given under the Income Tax Act so it’s such a matter is in hand start reading the bare act and see where it falls further read the rules connected to it and the commentaries explaining them and then make your opinion it can be for one page or half page. then read some good articles on that opinion compare that article with your opinion see what is the difference in the opinion see if your opinion is legally correct and if it is legally correct and your belief system says that it is good for your client to go with that opinion.
Q11. How a can lawyer without any CA or CS qualification can understand finance as most of the lawyers do not have such qualifications?
A11. It will become difficult if you don’t have any kind of background and if you don’t know what is the difference between cash and accrual system web between profit and loss account what is authorized capital what is issued capital, subscribed capital, paid-up capital. In this situation, a lawyer can do some courses on these subjects of 2-3months course.
At LawSikho for example in their corporate taxation course, they are very comprehensive from basic to advanced level and they have included all the parts like compliance, drafting and litigation related to both indirect and direct taxes so a student will have an interlinked study between the direct and the indirect taxes as they have designed their corporate taxation course in that way.
Q12. If a law student wants to get into a law firm what are the various areas in Corporate law in which he/she can practice?
A.12 There is corporate advisory, mergers, and acquisitions which also includes restructuring, then there are matters relating to IPR which is broadly covered under corporate practice only and under Intellectual property rights also there are several fields such as trademarks, copyrights, and patents and then there is Banking Law under which Banking and Insurance matters relating to IRDA then there is capital markets advisory these are matters relating to the SEBI regulations which are the Securities Tribunal Act matters this can be the different practice areas as far as Corporate law is concerned.
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