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New ITAT Members To Get Marginal Salary Hike But Limited 3 Year Term For Members, VPs And President

Updated: The earlier post was drafted on the misconception that there is a steep increase in the salaries payable to the Tribunal Members. However, as this is not so, the post has been corrected. The error is regretted

The Ministry of Finance has issued a notification dated 1st June 2017 titled the “Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017” by which various conditions relating to the appointment of Tribunal Members (including the ITAT) have been specified.

While the President of the Tribunal is entitled to salary and allowances of Rs. 2,50,000 (fixed) per month, the Members are entitled to receive Rs. 2,25,000 (fixed) per month.

This is an increase from current Rs 2,25,000 (fixed) for President and Rs 2,05,000-3%- Rs 2,25,000 for Members and the Vice Presidents. The new Members will also not be eligible for any retirement gratuity (currently upto Rs 20,00,000) and regular family pension roughly equivalent to 50% of last salary.

Incidentally, since 2005, Government has introduced contributory pension, instead of regular family pension, for all Government servants including the ITAT Members. It may be mentioned that the salaries of the Members, VPs and President were last increased with effect from 1st January 2016 as a result of 7th Pay Commission.

However, there are several onerous conditions attached to the appointment of the Tribunal Members which is probably intended to justify the high salary.

The following are the salient terms of the new Rules:

Appointments by a Government Committee

At present the appointment of Members of the ITAT is done by a Committee headed by a senior judge nominated by the Chief Justice of India.

Under the new Rules, the appointment will be done by a Committee appointed by the Government.

There is no involvement of the higher judiciary in the appointment process which means that the various checks and balances to ensure that only worthy personnel are appointed have been dispensed with.

However, for the selection of VPs and President, Selection Committee will continue to be headed by a sitting Supreme Court judge nominated by the Chief Justice of India.

Fixed tenure of three years for new Members, Vice Presidents and President

Members will be appointed for a fixed period of three years. Thereafter, the Government has the discretion to extend the appointment by another three years.

It is not clear whether there is any scope to extend the appointment beyond the period of six years.

Ban on practice and taking up employment after end of tenure

The old Members, as on now, are not eligible to practice before the Tribunal in any part of the Country. This is a lifetime ban. However, there does not seem to be any such restriction for the new Members.

In addition, for a period of two years after the end of the tenure, the new Members are not entitled to take up employment with any entity which has been party to any litigation before the Tribunal. The bar does not apply to Government companies.

Two categories of Members will be created

The peculiar situation that will arise is that there will be two categories of Members in the Tribunal. The Members who are appointed prior to the Notification will continue to receive the existing salary which is slightly less than the new Members will receive a salary of Rs. 2,50,000 per month.

The old Members are subject to some of the onerous requirements that the new Members are subject to such as the ban on practice before the Tribunal.

Retirement age

For some reason, different retirement ages have been prescribed for different Tribunals.
While the retirement age of the President of the CESTAT is pegged at sixty seven years, the retirement age of the President of the ITAT is 65 years. On the other hand, the Chairman of the National Company Law Tribunal gets to retire at the age of seventy years.

Salaries

The salary and allowances payable to the Chairperson/ President has been fixed at Rs 2,50,000 per month. Vice Presidents and Members are entitled to receive Rs 2,25,000 per month.

Appointment of Vice Presidents

If an ‘old’ Member of the ITAT is appointed to the post of Vice-President, the question arises whether he will be subject to the new Rules or will continue to be governed by the old service conditions. Once the old Members are appointed as Vice Presidents, their tenure may remain restricted to 3 years as VP and the reappointment will be at the discretion of the Government.

Comments/ suggestions invited

All stakeholders are requested to carefully consider the terms of the Rules and offer suggestions on whether they regard the terms to be beneficial to the ITAT or not.




7 comments on “New ITAT Members To Get Marginal Salary Hike But Limited 3 Year Term For Members, VPs And President
  1. as stated in the bill, the objective was to unify the disparity in the law regulating the service rules of various tribunal members. now what wisdom is there in allowing a member to work on NCLT till 70 and CESTAT at 67 and ITAT at 65 ?

    Does it mean that, Govt expect a member to firstly work till 65 in ITAT then for 2 years in CESTAT and then for 3 years in NCLT ?

    again the age of retirement of HC is 62 and that of SC is 65. so they may be expecting judges from HC and SC to work in ITAT / CESTAT / NCLT
    ..
    confusing ?

  2. kirit s sanghvi says:

    The Government proposes to revise upward the scales of salary of the members of the Income Tax Appellate Tribunal (ITAT) from the present level of Rs.80,000 a month to the level of about Rs.2,25,000 a month. The revised salary is higher than the salary of the chief justice of the Supreme Court.

    A descent salary is necessary to attract and retain talent. However, what is strange is that the new scales of salary will apply to only those members of the Bench who are appointed after the Notification announcing the rise in salaries is issued. Thus, imagine a scenario when the members of the Bench will be divided on the salary lines: the senior members will be junior in terms of salary, and the junior members will be senior in terms of salary. It is highly undesirable that judges of the ITAT are divided on the basis of new casteism based on the amounts of salary drawn by the members of the Bench.

    What about authority? The salary of a government employee or a member of the judiciary is indicative of the authority attached to the office of he occupies. It is usually the case that an official ranked higher in hierarchy occupies an office to which higher authority is attached and who is paid higher salary, too. Breaking this relationship between salary and authority, which will be broken if the new proposals have their way, will have disastrous effects on the morale of the incumbent members of the Bench. When two judges of ITAT will enter a court room, the senior will take the chair, but everybody sitting in the court room will know that the senior judge will take nearly three years to earn what the junior will take one year. In such a scenario, it will require a great moral courage on the part of a senior judge to stand his ground, which many will find difficult to do.

    There is another angle to this proposal also. If a senior judge allows injustice to be perpetrated on him, how would one expect him to do justice to the taxpayer or the Revenue, whosoever is seeking justice in his court?

    Another independently objectionable point is that the process of appointment of the new lot of judges by the Government Committee, unlike as at present when such appointments are made by a Committee headed by a senior judge nominated by the Chief Justice of the Supreme Court, will seriously compromise and undermine the independence of an important Tribunal. The proposal to alter the manner of appointment of judges to the ITAT is a serious interference from the Government, which will dilute the independence of the ITAT, for which it is famous, and because of which the taxpayers repose a lot of faith in this great institution and look up to for justice which the ITAT so adroitly delivers.

    • Your reader says:

      The comparison is incorrect inasmuch as the post 7th Pay Commission salaries of Members are higher because of merger of DA. The base year for DA fpr Members is 2016 whereas salaries for Honble judges is pre revised salary with perhaps 2006 as base year for DA. That makes comparison meaningless. Honble judges are much higher in posistion, salaries and every protocol vis a vis the ITAT Members; no questions about it.

      • kirit s sanghvi says:

        My comments were based on the earlier post which is now withdrawn as being incorrect. My comments become irrelevant.

    • Your reader says:

      The difference is salaries of old Members and new Members is very very marginal and will be fully offset by other terms like loss of gratuity and limited term etc.

    • kirit s sanghvi says:

      The earlier post on the basis of which my piece was written, has been withdrawn as being incorrect. Therefore, much of my comment becomes irrelevant.

  3. SATISH KUMAR RUSTAGI says:

    This is amazing and unbelievable. The salary in 1979 or 1980 for ITAT members used to be around 2 or 3 thousand.

10 Pings/Trackbacks for "New ITAT Members To Get Marginal Salary Hike But Limited 3 Year Term For Members, VPs And President"
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  2. […] validity of the ‘Tribunals, Appellate Tribunals and Other Authorities (Qualifications, Experience And Other Condition…‘ has been challenged in the Supreme Court in Kudrat Sandhu vs. UOI (Writ Petition (Civil) No. […]

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  7. […] Hon’ble RM Lodha, the former Chief Justice of India, has come down heavily on the action of the Government in enacting the Tribunal Members Rules 2017. […]

  8. […] 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 […]

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