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Dear Govt, Will You Act To Save ITAT Only After High Court Reprimands You?

The author, an eminent advocate, voices his exasperation at the continued indifference of the Government towards the well-being of the Tribunal. Though 3 long years have passed, the Government has not bothered to even appoint a full-time President for the Tribunal. The author warns the Government that patience amongst the stake-holders is running thin and that the Bar will, if driven to it, have no option but to seek relief from the High Court. He cautions that if this happens, the Government will face acute embarrassment and urges the Government to get its act together to ensure that such an eventuality does not happen

As per the amended provision with effect from 1-6-2013,

“The Central Government shall appoint –

(a) a person who is a sitting or retired Judge of a High Court and who has completed not less than seven years of service as a Judge in a High Court; or

(b) the Senior Vice-President or one of the Vice-President of the Appellate Tribunal,
to be the President thereof.”


It appears that the only hope for the Bar Associations is to approach the High Court. When there was a threat to the independence of the institution, the ITAT Bar filed a public interest litigation petition (“PIL”), and due to judicial intervention, the independence of this institution was not allowed to be compromise

The ITAT has to deal with revenue matters wherein the Government is always a party either as a respondent or as an appellant. It is desired that a person may be appointed from amongst persons of integrity and outstanding ability, having special knowledge of, and experience in problems relating to direct taxes and business accounts. I therefore suggest the following for the kind consideration of all stakeholders:

1. It is desired that the collegiums headed by the Chief Justice of India or senior judge of Apex Court, may select the best suited person to be the President of the ITAT;

2. It is desired that the Chief Justice of the respective High Courts may be requested to forward to the chairman of the selection panel, the names of those Judges who sat on the tax bench for at least three years and who have retired or may be retiring very soon, for being considered for appointment to the post of President of the ITAT;

3. The names of the Senior Vice-President and Vice-Presidents may also be considered on merit;

4. The Collegiums, if desired, may get the feedback from the senior professionals who regularly appear before the High Courts and the ITAT.

I am of the view that by this process, the collegiums may be able to select the best suited person to head this institution.

The Tax Bar has a great responsibility in ensuring the independence of the institution and in making sincere attempts in retaining its distinction as one of the finest institutions in this country and as a quintessential model for other institutions to emulate

The functioning of the ITAT cannot be compared with other Tribunals due to a limited number of Benches in these Tribunals. Whereas the Income-tax Appellate Tribunal has sanctioned strength of 126 members and it has Benches in 27 cities across the country. The ITAT Bar Association, Mumbai (“ITAT Bar”) and All India Federation of Tax Practioners (“AIFTP”) have made a representation to the Select committee that in the interest of the ITAT, it is always desirable that the President must be selected amongst the Senior Vice-President and Vice-Presidents. It may be appreciated that the job of a President involves not only discharging judicial duties but also dealing with matters of administrative importance. Normally, a Member is appointed as the President after serving more than 20 years in the Tribunal. As a member, he is transferred at least once every four years. When a person is so appointed, he is fully aware of the functioning of the various benches of the Tribunal and the knowledge and integrity of each and every Member. This makes it easy for him to discharge his administrative duties more efficiently.

It is very unfortunate that ever since the former President Shri Vimal Gandhi retired on 3-6-2010, the Ministry of Law and Justice, Government of India (the “Ministry”), for reasons best known to them has not initiated the proposal to appoint a Permanent President. Similarly, the post of the Senior Vice-President and posts of Vice-Presidents have also not been filled up. This has greatly affected the smooth functioning of the institution. In the interest of this institution and its better administration, it is desired that a Permanent President be appointed at the earliest by the Committee headed by a Judge of the Apex Court as per the due process of law. The representations made by the ITAT Bar and the AIFTP requesting the Ministry to make these appointments have not yielded any positive response. It appears that the only hope for the Bar Associations is to approach the High Court. When there was a threat to the independence of the institution, the ITAT Bar filed a public interest litigation petition (“PIL”), and due to judicial intervention, the independence of this institution was not allowed to be compromised [Ajay Gandhi and others v. B. Singh (2004) 265 ITR 451 (SC)/ Income–tax Appellate Tribunal v. V. K. Agarwal (1999) 235 ITR 175(SC)]. If the President and the Vice–Presidents are not appointed within a reasonable time, the Tax Bar may have to ring bells of the Court again by filing PIL in this respect. The Tax Bar has a great responsibility in ensuring the independence of the institution and in making sincere attempts in retaining its distinction as one of the finest institutions in this country and as a quintessential model for other institutions to emulate.

Readers may send their views by e-mail or by letters to the Office of the Federation which may help the Federation to make an appropriate representations to the Ministry in this regard.

Jai hind

ksa_sign
Dr. K. Shivaram

Editor-in-Chief, AIFTP Journal

Reproduced with permission from the AIFTP Journal, July 2013

7 comments on “Dear Govt, Will You Act To Save ITAT Only After High Court Reprimands You?
  1. sir, i see your point.
    as one taxation advocate from legal profession, i agree with you.

    if you read the citation (2013)14 SCC 811…IN BASAVARAJ & anr v Land Acquision officer – a CA NO. 6974 OF 2013
    ONE can properly appreciate what is limitation and condonation….i expect the hon tribunal members necessarily need to know..else they could make mistakes by remanding matters to AOs who committed blunders on limitation like sec 143(2)(ii) On ROIs and thus issued illegal scrutiny notices besides imposing penalty u/s 271(1)(c) and thus AOs issued bad in law notices but i find account members suggest to taxpayers that they could remand to AOs and such suggestions are not a decorum of honorary tribunals that members on benches should know.

    besides it reveals revenue influences them in some covert ways;

    if such things do happen where the prestige of the tribunal. so i fully endorse the suggestions you made in your piece.

  2. Appeals only help those who pin point the defects in earlier judgements based upon petitions or complaints or respondents errors called himalayan blunders!

    so that way ITAT need to see where CIT (A) FAILED in its judging, like in bad in law pronouncements.

    bad in law pronouncements in Notices of AO are enough to declare notice VOID !

  3. Sher Singh says:

    It is Thursday evening & none knows whether there is hearing on Monday in ITAT or not. ITAT should publish the constitution each week for two weeks in advance. Nobody knows today whether bench is working or not. Apart from huge backlog of pending appeals, members are not available for many benches. There is an urgent need of sense.

  4. K.N.Kundu, Adv says:

    Thanks. Hope proposed action will be supported by all practitioners who are appearing before the Tribunal. Vacant post of Tribunal Members should also be filled in. Dr. K. Shivaram’s suggestions are appropriate. Public interest litigation may be filed before the Honorable Supreme Court.

  5. Ramesh RR says:

    Thank you very much sir for the initiatives taken by you. Its time for all the professional bodies to take up this issue. I guess with help of seniors and legends in the profession, We will surely be able to take positive steps to regain the credibility of the most holiest institution.

  6. jagdish says:

    thank u I support this isuue

  7. pandipeddhi says:

    sir, the appeal seems more appropriate, yes the ITAT so far functioned very well as several times even SCalso commended the function of ITAT.
    iF government fails in its duty to people of India, that is called ‘legal duty’, then naturally, the rule of law is to protect the natural justice by the custodians called the state’s relevant Honorable H Cs or the Honorable. S C under Article 14 to be taken up under Art 226 by Honorable HCs or under Art 32 by Honorable SC, under judicial review to examine the flaws of the government, as it is also equally legislators accountability to people of India, that how the governments in place, when look for tax revenue from assessees or otherwise from under indirect taxes, can get tax revenue?

    So that might lead serious conflicts in rule of law, as arbitrary impositions of taxes will be malafide legally and constitutional courts may set aside several actions of revenue resulting in stand off that might cripple governments functioning.

    So it is high time the ruling government relevant ministry handling laws needs to interfere appropriately with CBDT AND ts controlling ministry of finance promptly, else it will land into constitutional breakdown and president will have to interfere under Art 356, as some financial emergency had caused a constitutional breakdown meaning imposition of emergency, by dismissing the non functional government. I think such situation is most unfortunate if it really happens.

    So the Bar associations need to take upon itself the necessary legal duty to appropriately file PILS to rectify this present unfortunate situation.

    i second the appropriate appeal written by Dr K. shivaram, as a concerned person both as an advocae and an assessee in the public interest.

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