The general counsel for the NAACP asked a House subcommittee yesterday to abolish the Civil Rights Division of the Justice Department because it is failing to enforce anti-discrimination laws.

Thomas Atkins charged that "the Department of Justice has become a department of injustice as it relates to victims of discrimination." He proposed that the Civil Rights Division's funds and personnel be reassigned to civil rights units in other government agencies.

Atkins told the subcommittee on civil and constitutional rights, "This Department of Justice has engaged in a virtual conspiracy against the victims of discrimination. To give them more money to continue with more of the same would implicate this committee and the Congress in what they are doing."

Both Atkins and William Taylor, speaking for the Leadership Conference on Civil Rights, a coalition of 165 organizations representing women, minorities, labor, handicapped people and civic groups, said that because of the negative civil rights positions taken by the Reagan administration they would prefer not to have the Justice Department intervene in their cases.

"I have difficulty thinking of a single civil rights matter in which I would welcome participation of the U.S. Justice Department, and that's a tragedy," Atkins said.

Taylor asked the subcommittee to appoint a special counsel to investigate the "conduct" of the Civil Rights Division.

"Reynolds has put his policy of defiance of the law into action . . . ," Taylor said, referring to Assistant Attorney General William Bradford Reynolds. "If the chief law enforcement agency of the United States may with impunity trammel the rights of one group of citizens, then the rights of us all are in jeopardy."

Subcommittee Chairman Don Edwards (D-Calif.) said he would ask the full Judiciary Committee to consider the proposals.

Reynolds opposes mandatory school busing and quotas for affirmative action, calling the latter "morally wrong." He has said that the Reagan administration will not fight discrimination with discrimination.

He is scheduled to respond to the charges from a number of civil rights advocates in an appearance before the subcommittee on Monday. The subcommittee is considering the authorization bill for the civil rights division.

Theodore Shaw, a lawyer for the NAACP Legal Defense Fund who resigned from the Civil Rights Division about a year ago, charged that the focus of the division changed under the Reagan administration.

"The Justice Department . . . has shifted to represent the interests of those who historically have been the beneficiaries of racial discrimination," he said. "Minorities and other groups historically in need of legal protection correctly no longer perceive the Justice Department to be an ally."

Taylor noted that in its 27 months in office the current administration has not filed a new school desegregation case and that Reynolds has announced his willingness to ask courts to reopen cases.

"It is clear that the Reagan administration's Justice Department encourages the abandonment of school desegregation plans throughout the nation, even in communities where the issue has long been settled," he said.

"The department could hardly give a stronger prescription for reopening wounds that have healed and for renewing racial conflict," he said.

Norman S. Rosenberg, director of the Mental Health Law Project, added that while the Justice Department once was a leader in fighting for the rights of institutionalized persons, "The department's leadership has evaporated and the progress it has achieved is being callously eroded . . . . Not one lawsuit involving a mental health or mental retardation facility has been initiated by the Justice Department in the last two years."

Robert Funk, executive director of the Disability Rights Education and Defense Fund, also charged that Reynolds has adopted an unnecessarily narrow interpretation of the rights of the handicapped.