The author agonizes that though four long years have elapsed since the controversy over the alleged corruption in the Tribunal broke out, nothing tangible appears to have been achieved. He warns that an important issue like this cannot be left unresolved for too long as it will otherwise begin to undermine the taxpayer’s confidence in the great Institution. Instead, the Government should take proactive steps to bring the truth in the open and the best way to do it is to appoint an experienced Judge to conduct an impartial probe, he says. He also implores the Law Minister to take a speedy decision over the long-pending issue of appointment of a permanent President and filling up vacancies in the posts of Sr. Vice Presidents
(a) To initiate the proposal of appointing, permanent President of ITAT, Senior Vice President, and Vice-Presidents by the selection panel:
The Income Tax Appellate Tribunal, which was founded on 25th January, 1941 will be entering into 73 years of its existence, by 25h January, 2013. The Income tax Appellate Tribunal is also referred as mother Tribunal of all the Tribunals of our country. However, it is very unfortunate that ever since, the former President Shri Vimal Gandhi retired on 3-6-2010, the Ministry of Law and Justice of Government of India, for reasons best known to them has not initiated the proposal to appoint a Permanent President to this premier institution.
When a person is acting as officiating president, Tax Bar is of the opinion that he may not be able to take any bold decision in the interest of Institution, without the approval of concerned ministry, which will affect the judicial independence of the Institution
It is for the first time in 72 years the Tribunal is without Permanent President for more than two and half years. Similarly, the vacant post of senior Vice President and the post of Vice-Presidents have also not been filled up. By not appointing Permanent President, Senior Vice-President and Vice-Presidents what message is being conveyed? Is it that, we don’t have competent and deserving members to be appointed as President, Senior Vice-President, and Vice-Presidents? Has anybody thought about the impact on the morale of judicial officials who otherwise eligible for promotion but not been promoted due to reasons best known to the Government. If the process of appointing the Vice-Presidents would have been done as and when the vacancy arose, some of the members would have retired as Vice-President, which is the only way the Government can appreciate the rendering of service for more than 15 years by such members. As per the information made available in the matter of Shri S. R. Wadhwa v. CPIO dated 6-11-2102 (F. No. 23(124)2012 –IC, it has been clarified that since there is a proposal to replace the Income tax Act by the Direct Taxes Code, as per the proposal in the Code, the President of ITAT may be appointed from amongst serving or retired High Court Judges and consequently the proposal to fill up the post of President of ITAT on regular basis has not been initiated. One is not sure when the Direct Taxes Code will become an Act, it may take another few years or it may not become an Act. As regards the appointment of Vice-Presidents, just because the SLP is pending cannot be ground not to initiate the process of appointment of Vice-Presidents. The Government may move petition before the Apex Court and the matter may be decided at the earliest, this will bring certainty and procedure will became more transparent. If this trend of not appointing the President, Senior Vice-President and Vice-Presidents continues, many young, competent and deserving professionals from the field of law and accountancy, may not join the bench, which will be a great loss to the Institution and the nation. Many of our respected seniors who have been practicing before this prestigious institution for more than 50 years and who are instrumental in building this institution are of the firm opinion that in the interest of the institution, the post of the President needs to be confirmed at the earliest and also that the Sr. Vice President and Vice Presidents need to be appointed at the earliest. Tax Bar is very much concerned with the judicial independence of the Institution. When a person is acting as officiating president, Tax Bar is of the opinion that he may not be able to take any bold decision in the interest of Institution, without the approval of concerned ministry, which will affect the judicial independence of the Institution. In our judicial system the judicial Officers neither can make representation nor they can approach the press with their grievances, hence it is the moral duty of the Tax Bar to protect the judicial independence of this Tribunal. Income Tax Tribunal Bar Association, Mumbai, has played a very proactive role when there was great threat to judicial independence of the Tribunal by approaching the Court. (Ajay Gandhi and others v. B. Singh (2004) 265 ITR 451 (SC), ITAT v. V. K. Agarwal (1999) 235 ITR 175 (SC). The Income-tax Appellate Tribunal Bar Association and All India Federation of Tax Practitioners have sent representations to Hon’ble Law Minster in this regard and we hope that the process of appointing permanent President, Senior Vice-President and Vice-Presidents will be completed at the earliest. We appeal to all those who are concerned with the judicial independence of the Institution, better administration and unpolluted justice delivery system to make representation to the Hon’ble Minister of Law and Justice and Hon’ble Prime Minster of India, to take an early initiative for appointing permanent President, Senior Vice-President and Vice-Presidents, amongst the members who are men of integrity, competency and knowledge. Good administration of justice contributes to the growth of the nation.
(b) To appoint Retired Judge of Supreme Court or High Court to decide the alleged involvement of members of ITAT in Kolkata episode:
A judge would be in a better position to look into the suspect orders passed by the concerned Member to determine whether what is alleged to be an “outsourced” order is in conformity with the language, style of writing and approach adopted by the Member in his other (undisputed) orders or whether it is the creation of another
In May, 2008, the Central Bureau of Investigation carried out search operations against a Member of the Income tax Appellate Tribunal at Kolkata. Wide publicity was accorded by the media to this episode which resulted in adverse publicity for the Tribunal. Since this was a very serious matter tarnishing the name of a reputed legal institution and involving a Member of the Income tax Appellate Tribunal. Income Tax Appellate Tribunal Bar Association, Mumbai, at a meeting held on 6th June, 2008, passed a resolution requesting for a speedy investigation. This incident has raised doubt that the reputation of the Tribunal in the public perception. It is desired that this being a judicial matter, in consultation with the Chief Justice of India, a serving or retired Supreme Court or High Court judge may be appointed to look into the matter, examine the facts said to have been collected, interview the concerned persons, consider their submissions and then determine whether there is any basis for the suspicion that the Member has outsourced the writing of the judgment as appears to be the view of the investigating agency. If the report is adverse to the concerned person, then it may be seriously considered whether the services of the Member should not be peremptorily terminated. The Supreme Court of India in Ajit Kumar v. State of Jharkhand & Ors. Civil Appeal No. 2420 of 2011 reported in (2011) 11 SCC 458 seems to have upheld such an approach. A judge would be in a better position to look into the suspect orders passed by the concerned Member to determine whether what is alleged to be an “outsourced” order is in conformity with the language, style of writing and approach adopted by the Member in his other (undisputed) orders or whether it is the creation of another. He can also determine how a copy of the concerned order was on the hard disk said to have been seized from the office of the concerned professional person under suspicion and why and how such order was on the hard disk prior to the date of its pronouncement. All these are matters which a judge can look into and opine upon far better than an investigating agency. The learned judge would also be well suited to opine upon the role of the professionals allegedly involved in the matter. The ITAT Bar Association Mumbai has sent a detailed representation to the Hon’ble Law Minster, we hope the Law minster will take a very positive step in the interest of Institution.
(c) Direct Taxes Code, 2010, (Bill No. 110 of 2010) 326 ITR 42 (St) (187), (Clause 182), the appointment of retired Chief Justice of High Court, as President of Income Tax Appellate Tribunal:
Income Tax Appellate Tribunal Bar Association Mumbai has made a representation to the Chairman, Standing Committee, that in the interest of Institution the President of the Income Tax Appellate Tribunal may be appointed only from amongst the members of the Income Tax Appellate Tribunal by giving various reasons, explaining the complexities involved in administering Benches in 27 cities having sanctioned strength of 126 members. When a member is selected as a President, he is fully aware of the functions of various benches of Tribunal, which make him to discharge his duties more efficiently. We are appealing to the Hon’ble law minister to impress upon the Government to withdraw the proposal of appointing retired High Court judge as President of the Income Tax Appellate Tribunal.
(d) To increase the age limit of Judges of High Courts and members of ITAT from 62 to 65:
Federation has sent a representation to the Hon’ble Law Minster to increase the age limit of Hon’ble members and Hon’ble Judges from 62 to 65. At the inaugural function of the Income Tax Appellate Tribunal Members’ Conference at Mumbai on 4th November, 2006, then Hon’ble Law Minister Mr. H. R. Bhardwaj has stated that he was in favour of raising the retirement age of the members of the Income Tax Appellate Tribunal from present age of 62 to 65. It may also be appreciated that now the member of Income Tax Appellate Tribunal after retirement is not allowed to practice before the Income Tax Appellate Tribunal, the Hon’ble Judicial Members may be able to appear before the High Courts where as the Accountant Members may not be able to practice in any judicial forum, therefore it is necessary to increase the age limit of members from 62 to 65. The Bill which is pending for consideration for increasing the age limit of Judges of High Court may also be taken up on priority basis. Experience of a judge and his knowledge is an intellectual asset of the nation which can be used for better administration justice.
Tax Bar Associations across the country are seeking an appointment of Hon’ble Law Minister to discuss the above issues. Members of the Tax Bar Associations who appear before the Income tax Appellate Tribunal desired that Income-tax Appellate Tribunal which is mother Tribunal of all other Tribunal must retain the glory as one of the finest institution of our country. Readers may send their objective suggestion for better administration of justice before Income tax appellate Tribunal to the Hon’ble Law Minister for his objective consideration.
Dr. K. Shivaram
Reproduced with permission from the AIFTP Journal, October 2012