Dr. K. Shivaram, Senior Advocate, has sent the clarion call to all professionals to put on their thinking caps and offer suggestions to the Hon’ble Chief Justice of India on how to improve the Country’s broken legal system. The author has highlighted a few core reforms which require to be implemented on an imperative basis
TAX PROFESSIONALS OF THE COUNTRY SHOULD CONTRIBUTE TO THE VISION OF THE HONOURABLE CHIEF JUSTICE OF INDIA WHO IS TRYING TO EVOLVE A SYSTEM WHICH CAN PRODUCE BETTER RESULTS.
Dr. K. Shivaram, Sr. Advocate, has expressed shock that the Government’s promises of ushering in ‘ease of doing business’ is proving to be nothing more than empty rhetoric. He has revealed startling facts that the vacancy in tax judges will take 15 years to be filled up and that tax disputes will take at least 23 years to be resolved. He has offered practical suggestions about how the Government can speedup the process of resolving tax disputes, if it is really inclined to do so
In the Times of India on 16-9-2019, it was reported that it will take a minimum of 15 years to fill the vacancy of judges. Though the Government promises to help achieve ‘ease of doing business’ in India, unless the tax litigation is settled within a reasonable period of time, the object of doing business with ease in India may not be achieved. Total pendency of appeals before the ITAT as on 1-07-2018 is approximately 9,69,050, out of which a pendency of 22,039 is at Delhi and 16,108 is at Mumbai (2018) AIFTPJ–July–P 45.
Dr. K. Shivaram, Senior Advocate, is distraught at the blatant disregard by the Government towards the welfare of the ITAT. He has revealed shocking facts about how the Govt has acted in defiance to the directions of the High Court and the CAT and not bothered to appoint core staff to the ITAT for the past 15 years. The less said about the non-appointment of the Hon’ble President and Vice-Presidents, the better, he says
The ITAT was not only the first Tribunal to be set up in this country but it has, over the years, proved itself true to its object of providing fair and speedy justice in the field of direct tax litigation. It is therefore a cause of concern that recently, issues that expose the underlying administrative apathy have come to light that are affecting the smooth and efficient functioning of the Tribunal. The orders of the ITAT have great financial implications on both the Government as well as common man and hence its smooth functioning is essential for the purposes of both speedy justice and revenue collection.
Dr. K. Shivaram, Senior Advocate, has referred to a number of recent incidents which show that the ITAT is no longer as independent as it used to be in the past. He warns that if the ITAT loses its independence, taxpayers will lose confidence in the institution and this will have a debilitating effect on the administration of justice. He has called upon the Tax Bar to rise to the occasion and save the ITAT from Governmental interference
The Independence of the Income Tax Appellate Tribunal is the need of the hour for effective administration of justice – The Tax Bar has a greater responsibility to strengthen the independence of the mother Tribunal and to promote an unpolluted justice delivery system.
Dr. K. Shivaram, Senior Advocate, has sent the grim warning that new terms of appointment and removal of the Tribunal Members does not auger well for the independence of the institution. He says that as the Government is the biggest litigant, its role in appointing and removing Members will play havoc with the free working of the judicial mind. Members may be wary of taking bold decisions against the Government for fear that there will be retaliatory punishment in the form of dismissal from office or non-renewal of the tenure
The Ministry of Finance has by Notification dated 1st June, 2017 notified the Rules for Appointment and Service Conditions of Members of 19 Tribunals in India. The Income Tax Appellate Tribunal [ITAT] is one such Tribunal. A reading of the Rules leaves no two opinions in the mind that the underlying agenda behind the Rules is elimination of the control of the Judiciary over ITAT and correspondingly tilting the same in to the hands of the Executive.
The learned author has raised the seminal question whether if a judge of the High Court is appointed President of the ITAT, he constitutes a “Member” and has the jurisdiction to hear and decide appeals u/s 252 and 255 of the Income-tax Act, 1961. He has argued that such a President is restricted to doing administrative work and has no jurisdiction to do judicial work
Section 252(3) of the Income-tax Act, 1961 was substituted w.e.f. 1/6/2017 to empower the Central Government to appoint a sitting or retired Judge of High Court and who has completed at least seven years of service as a Judge in a High Court, as the President of the ITAT. Before the substitution of the section, a President was appointed from amongst the Vice-Presidents or the Sr. Vice-President. Vice Presidents are appointed under Section 252(4) of the Act from amongst members of the Appellate Tribunal. Therefore, before the section was substituted, the pool from which a Vice President or a President was to be appointed was amongst the members of the ITAT. Under the substituted Section 252(3) of the Act, a qualified Judge is appointed directly as President and not from amongst the pool of Members of the ITAT.
Advocate Neelam C. Jadhav has prepared a compilation of important judgements relating to the taxability of unaccounted black money deposited in bank accounts in the wake of demonetisation. The compilation of judgements will prove invaluable to tax professionals and tax payers in the wake of the heavy litigation between the tax payers and the income-tax department that is likely to ensue shortly
1. S. 4: Income – Chargeable as – Assessee’s books actually showing a cash balance of above Rs.38,000 as on the day immediately preceding the date of demonetisation. – In the absence of material before the Tribunal, it could not have held that only 22 out of 28 high denomination notes represented cash balance and the remaining 6 constituted income from undisclosed sources.
Dr. K. Shivaram, Senior Advocate, has hailed Demonetisation as a great move and a bold step to reduce the black money circulation in our country. He has called it a “War against corruption and black money” and opined that the move of the Government deserves to be appreciated and encouraged. He has also given important pointers on whether the disclosure of black money will attract penalty under s. 277A and other provisions of the Income-tax Act
The Press release issued by the Government of India Ministry of Finance Department of Economic Affairs reads as under “With a view to curbing financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contraband in to India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy, it has been decided to cancel the legal tender character of the High Denomination bank notes of Rs 500 and Rs 1000, issued by RBI till now. This will take effect from the end of 8th November, 2016”
Dr. K. Shivaram, Senior Advocate, is upset at the inaction of the Government in appointing Vice-Presidents to the ITAT. He explains that this inaction demoralizes the hardworking Members of the ITAT and robs them of the prospects of promotion. The author has also expressed grave reservations at the proposal of the Government to merge all the Tribunals into one body. He explains that the proposal is ill-conceived and has been mooted without paying regard to the specialized knowledge that is required to decide complex income-tax cases
Why is the Government not appointing the Vice-Presidents of the ITAT? Whether the move of the Government to merge the ITAT with other Tribunals is justified?
Dr. K. Shivaram, Senior Advocate, points out that while Courts are dutifully issuing directions and strictures with the sincere objective of putting the income-tax department on the right path, there is no feedback from the department as to whether these directions and strictures are being implemented by them. He submits that the Bar is under the bounden duty to be vigilant and play a proactive role to ensure that the department abides by its obligations and is made accountable for its misdeeds.
In public interest, time and again, High Courts have passed strictures against tax administration for failure to follow the due process of law in the course of assessment, recovery and quasi judicial-If directions of High Court are followed, it may be communicated by press release or by a circular – If not, then what remedial action has been taken?
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