How To Argue Matters Before The Tribunal
Shri. H. L. Karwa, President, ITAT
Shri. H. L. Karwa was a leading High Court Advocate before his elevation to the Bench. He uses his rich experience as an Advocate and as a Judge to pinpoint a few techniques that Lawyers & Chartered Accountants should adopt while arguing matters before the Tribunal so that they are able to convey their point more effectively to the Bench. He also sends the gentle reminder that more Professionals should join the Bench
Good Evening to all. I am grateful for inviting me to inaugurate the National Seminar at Radhika Beach Resort, Diu. Diu is a famous tourist destination and the weather is pleasant. At the very outset, I wish every success of this National Seminar 2013 at Diu which is organized by All India Federation of Tax Practitioners, Mumbai and All Gujarat Federation of Tax Consultants, Ahmedabad jointly with Rajkot Tax Consultants Society, Jamnagar Tax Practitioners Association and Taxation Association, Junagadh.
It is generally noticed that the young Members of the Bar are in the habit of citing case law immediately without narrating the facts. This is not correct practice. It is the minimum expectation of the Bench that they should prepare well while advancing their arguments. Proper facts of the case are to be narrated with the help of supporting material in the form of paper book. Thereafter, the Bench should be persuaded that the legal principle laid down in the case law cited is applicable to the facts of the case
For the last 17 years I am working in Income Tax Appellate Tribunal (“ITAT”) and therefore, it is obvious that I should talk about this august institution. As all of you know that the contribution of the I.T.A.T. to the judicial system is unparallel. The Tribunal is the most effective institution for redressal of disputes under the Indian Direct Tax Laws. The Tribunal is an independent institution without any interference by any Ministry or Department of Government of India and has all the trappings of Court of Law.
The I.T.A.T. came into existence in 1941. When the Tribunal came into existence, it was welcomed by the public at large. The setting-up of the Tribunal brought about a paradigm shift in the grievance redressal system. The scheme in the Tribunal ensures complete functional independence of the institution, a high degree of legal and technical expertise of the Members manning the Benches, user friendly, simpler and informal procedures and an in-expensive and quick justice delivery system. For the decades, the Tribunal has been strengthened and changes have been made to cope with the increasing burden of cases and growing complexity of disputes. On this occasion, let me share with you that as on today about 70819 appeals are pending in I.T.A.T. Benches across the Country. No one should worry about the pendency of cases because the situation is not beyond our control. Let me tell you that at one point of time more than 3 lakh cases were pending for disposal. It is true that one of the biggest challenges to any Judicial Institution is to control the mounting arrears of cases pending adjudication and reduce the time gap between filing of a case and its disposal.
At present, we are trying hard to reduce the pendency. I may also state that around 2500 appeals relating to International Taxation and about 3500 appeals relating to Transfer Pricing are pending before the Tribunal involving not only complicated issues but also huge tax in dispute. In order to dispose of the appeals relating to International Taxation and Transfer Pricing, I have earmarked 3 Benches at I.T.A.T. Mumbai, 2-Benches at Delhi, 1-Bench at Bangalore, 1-Bench at Hyderabad. Our endeavour is to dispose of the appeals relating to International Taxation and Transfer Pricing on priority basis. Special Benches are constituted on important issues like International Taxation and Transfer Pricing.
I am happy to inform you that I.T.A.T. is the first of its kind of the Tribunal which has introduced E-Court in India. Recently, we have connected I.T.A.T. Nagpur Bench with I.T.A.T. Mumbai by way of NICNET connectivity and conducting E-Court from 10th December, 2012. The Authorised Representative of the assessee and the Departmental Representative advance arguments from Nagpur and matter is heard and disposed of at Mumbai. Similarly, within a short period we are also connecting I.T.A.T. Allahabad with I.T.A.T. Delhi Benches. In future, we are planning to connect some of the existing Benches where the pendency is low with Zonal Offices and conduct E-Courts. As all you know that the motto of the I.T.A.T. is “SULABH NYAY ! SATVAR NYAY ! ” i.e., “EASY JUSTICE ! SPEEDY JUSTICE ! ”.
Sections 252 to 255 of the I.T.Act, 1961 deals with the provisions relating to appeals to the Tribunal. The I.T.A.T. has formulated its own Rules and Procedures which are contained in the Income Tax (Appellate Tribunal) Rules, 1963. In my opinion, the Tribunal is the most effective institution for redressal of disputes under Indian Direct Tax Laws. The Appeal to the Tribunal can arise on points of law or on facts or a combination of both. The Tribunal is the last fact finding authority under the Direct Tax Laws. The Income Tax Department is also entitled to file appeal against any Order of the CIT(A) before the Tribunal. The aggrieved assessee or the department can agitate both the questions of law and fact.
The Members of the Bar who are eligible should come forward to become the Members of the Tribunal. I think it is the duty of the Tax Bar Associations to encourage the eligible professionals to join the Tribunal as Members. At the same time, it is also the duty of the young eligible professionals to prepare themselves to become the Members of the Tribunal
The appeal before the Tribunal is generally heard by two Members Bench, one of whom is Judicial Member and other is Accountant Member. The Tribunal is final fact finding authority. Its finding on facts is final and no appeal lies to the High Court. The Powers of the Tribunal are very wide but there is no power of enhancement. All questions, whether of law or of fact which relate to the assessment of an assessee may be raised before the Tribunal. In disposing of the appeal, the Tribunal has the power to give appropriate directions and to pass such orders as it thinks fit, after giving an opportunity of being heard to both parties in appeal. The powers have been expressed in widest possible terms similar to the powers of the Civil Appellate Court under Section 96 and Order 41 of the Civil Procedure Code. As I have already said that I.T.A.T. is a final fact finding body, therefore, it is, necessary that all facts are clearly brought to the notice of the Tribunal.
It is generally noticed that the young Members of the Bar are in the habit of citing case law immediately without narrating the facts. This is not correct practice. It is the minimum expectation of the Bench that they should prepare well while advancing their arguments. Proper facts of the case are to be narrated with the help of supporting material in the form of paper book. Thereafter, the Bench should be persuaded that the legal principle laid down in the case law cited is applicable to the facts of the case.
I may also mention here that the Tribunal is not required to consider the entire paper book while writing the Order. It is sufficient if the materials pointed out at the time of hearing are considered. It is, therefore, necessary to point out the relevant materials with reference to the page no. of paper book in support of contention at the time of hearing.
The Authorised Representative need not presume that once the paper book is submitted, his job is over. I have already referred to I.T.A.T. Rules, 1963. In the course of practice you may require to raise admission of additional grounds or evidence, filing of the cross-objection, filing of stay petition etc., For this purpose, it is necessary that one should know the Rules and Procedure prescribed in I.T. (Appellate Tribunal) Rules, 1963.
Before I conclude, I would like to bring to the notice of all the young Members of the Tax Bar that at present 85 Members are working in the I.T.A.T. against the sanctioned strength of 126 Members. We need sufficient number of A.Ms and J.Ms in the near future. I have been told that steps are being taken shortly to fill-up the vacant posts.
Last year interviews were conducted to appoint 36 Members. However, the Selection Committee Headed by Senior Most Supreme Court Judge selected only 16 candidates. The Selection Committee observed that they did not find suitable candidates to be appointed/selected as Members of the Tribunal though 100s of candidates were interviewed. It means that suitable candidates are not interested to become the Members of the Tribunal. I think this is not a healthy sign.
The Members of the Bar who are eligible should come forward to become the Members of the Tribunal. I think it is the duty of the Tax Bar Associations to encourage the eligible professionals to join the Tribunal as Members. At the same time, it is also the duty of the young eligible professionals to prepare themselves to become the Members of the Tribunal.
It is really well guided and encouraging for new comer to ITAT. Hon’ble Mr.KARWA sir, deserves the best compliment and I heartily congratulate him.
Shri Karwa , the Hon’ble President has been very forthright in expressing his views.
It is always advisable to state the facts in brief in the beginning and then the issues involved. This brings to focus the attention of the Bench . Thereafter one can start with the grounds of appeal. Starting the argument with with the case law is like putting the cart before the horse. This surely complicates the matter and the court’s time is wasted.
Mr Karwa deserves compliment for giving the proper advice in presence of large group of tax practiceners.
Value addition to knowledge. Thanks !!
That was an excellent guidance sir ! Thank you !
Very impressive note on ITAT and good guidance to persons representing in ITAT.
good speech
good article
Incidentally facts surface due to multiplicity of reasons. See sub prime in USA had a global effect due to legalization picking without bridles over the unruly horse of growth as every one talked about growth right from congress men or parliamentary men or men in Diet all over to investors, business men who had knack to counter any tough law as such by their powerful lobby technics and buying anyone wherever they are, that had upset the apple cart.
Man on the street never used any lobbying not any influence as two men on street do not agree with each other , what government men and party men in power wanted to en cash that dissension but it never works any longer as key is knowledge is power which is readily available to men on street. so conflicts became heady, as public officer is not knowledgeable like man on street as he is helped by powerful media and really knowledgeable men sell professional services to men on street besides to rich and powerful and wealth tat is another fact today. Public officer is in shell of is own departmental understanding and other pet things they have been fostering!
Besides, ‘facts’ conceived by public officer by his half heated study readily land him in trouble which public officer is self approbation type not able to really to investigate things, after all facts are normally and always stranger than fictions.
facts are products of necessities as necessities are mother of invention. As inventions are not easily be found by fiction methods. So public officer working fictions will no longer works.
So, the idea of ‘audi aletram partem ‘ became more of necessity rather than of so so caled mercy structure as early as 12th century when Magna Carta surfaced during King John’s time when reads 1215 carta one can clearly see.
natural justice is not only safe method for public but to to public officer ,but public officer per se thinks he is immune perhaps of ignorantia legis though they have all kinds of degrees in laws.
Every fact has got history of its own, so in criminal jurisprudetia we give all kinds of opportunities to Accused , by not proceeding like a roadroller.
Even then we commit saddest errors and commit hangings of people or man or woman, so courts resorted to doctrine f ‘benefit of doubt and acquitted accused, by the principle justice can all several criminals when there is a slightest doubt on committing the said crime before court which perception is least known in Administrators as they move very vehemently.
So Law when applied on facts that turn out most of the time ‘dicey’!
So constitutional courts complete power of review with them, even though Administrator or parliamentarian liked it at all.
See constitution of India why gave Part III – fundamental; rights as indivisible rights of men just to protect constituent functionaries under Directive principle need to tread very carefully when they work against men .NBut it is least understood by all parliamentarians in India and so so many constitutional amendments surfaced finally, but see in USA till 2000 there were proposal for constitutional amendments over 11000 in number but only about 25 amendments are so surfaced but in india if you sneeze you can get a constitutional amendment which cannot sit on just two spuds when four spuds minimum are required provided the soil of thought is really very hard rock but ion sedimentary structure f perceptions even four spuds cannot stand!
But we move right royally even though our own Indian history tells you how kingdoms fell thanks to constitutional improprieties but we are indeed sad learners from our own historical determination over centuriesQ!.
So facts are bulwarks against Laws so Laws were very over carefully crafted even then many of our laws still cannot stand scrutiny while our fact finding skill is abysmally very low but yet we feel that we are past masters in investigation unfortunately we are just infants!
pubic servants intax administration perceive things as per that year’s finance bill and they throw away tax laws to winds that creates serious failures in their LEGAL DUTIES and if LEGAL DUTY IS FAILED, it is said ABUSE OF POWER that really becomes ARBITRARY FUNCTION THAT LEAD TO MISFEASOR… MALAFIDE ACTIONS, SO CONSTITUTIONAL COURTS RETAIN THE POWER OF REVIEW AS THE COURTS CANNOT TRUST ADMINISTRATIVE LAWS AS THE ADMINISTRATIVE LAWS WILL TURN OUT TI BE TYRRANY ON SOCIETY AND SOCIETY MAY REVOLT!
All said and done taxation is a phenomenon undergoing changes every year by any finance bill presented in parliament; when finance bill presented it automatically supposed to have superseeded last finance bill perception, if so how a law made in 1961 can stand even when you amend some provisions by so called amendments that way conflicts surface.
Any bad element knowing changes in finance bill likely to be subsequent year he tears it apart as he knows that laws made years back get wobbled. unfortunaey, no finance minister has seen this problem but he simply continued to add new tax provisions which upset the boat of finance management.
Previous finance bill is based upon then prevailing situation of previous year how new financial year can be perceived to be the same as previous financial year, so ?Nani Palkiwala said any tax perceived is just ‘ disgraceful’.
Every one quotes but not understood his depth in it.
As every year is new year so call it rool on the old and roll in the new on a new year’s day but soon we forget when we march into March to present new tax policy we forget every thing and we load burden over previous burdens of taxes which automatically ruffles the feathers and conflicts surface leading to serious conflicts, so Tax laws and taxes are not given any substantial status except the tax law of 1961!
Law is an idea of research on perceptional understanding of society over sustained observation of society’s views crystallized then only any law sustains. when facts take place they are current position that needs to be set with age old perceptions of rule of law.
So Advocacy is one is a continued understanding of the mind of the society as to what is right and what is wrong, so sociological jurisprudence got into it as these days people do not care about age old perceptions while laws are product of age old perceptions so sustainability of laws came in.
when sustainability is questioned naturally conflicts surface, So in law we used to say, rely on highly experienced man’s advice!
Excellent Speech by Shri H L Karwa. ITAT President. The young members must be appreciated and motivated for representing their cases before the ITAT and argue their cases . More E-court’s be opened.
The ITAT in those days ITAT used to call for files of the department in regard to appeals emanating orders passed u/ 147/263 of the Act so as to appreciate the facts of the case for reopening/ cause for revision.
The trend should be revived in order to make complete justice.
The ITAT has to be congradulated for publishing the orders in its web site .
But is will be advantageou if section wise index is prepared on all inida basis so as to beenfit both assesse and the department on the latest postiion of the law.
The CD containing supreme court cases must be given to the Tribunal which is only available in the select Bar Association.
Steps should also be taken to get elevation of Judicial Members to the post of High Court judge
Occassional refresher courses be conducted to the members of the ITAT on Transfer pricing and international
taxtion at each zon and topic of current interest and not at central place and members of the Bar also should be
invited
various factor are highlited .. good..
Great, impressive and guiding article…..thanks…..
Excellent, quite Guiding and impressive speech.
true an ounce of performance is worth of pounds of promises of Mae West is true in his speech that is what Advocacy is all about!
Always facts are important. then how law is applied . First it is very important whether AOs Notices are beyond prescribed Limitation as per tax law. If Notices are beyond Limitation, eg 143(2) or 142(1) and the like first seen by Tribunal, if beyond Limitation by AOs, naturally it cancels the very Notice and relief is given to Assessees. All tribunals closely follow ARSINA HOTEL, ITD 667 WHICH QUOTED AND AND DEALT ELABORATELY SC judgement in Khurbhan Ibrahimjee Mithofcorewala 82 ITR 821 and indeed it is Art 141 based judgement to be followed by all courts ad tribunals.
Besides, Limitations prescribed in the tax procedural laws are essentially Doctrine of Estoppel self imposed by Revenue. Limitation ideas came from the historical reasons Assessees cannot maintain all documents after a certain period of time after filing their returns. So it is sensible for AOs to essentiall look at limitation u/s concerned before issuing notices that will bring down unnecessary cases and the unnecessary load on tribunals besides save executive time of Revenue as also save unnecessary legal expenses.
So it is vital facts need to be properly collated with flags to help the members do not spend too much time, to decide the issue, if Advocacy is like a jockey controlling the unruly horse called law provided they bridle the facts sensibly.
Law is always referred to unruly horse. Advocacy is to spend time for properly collating the well marshaled information before they present the matter before tribunals will too less frills of case law.
Every public officer cannot be very comfortable with law as sections have several riders. So any public officer, first know what kind of sections his office is supposed to handle and he need to keep a proper checklist with him and yes he needs to work with all alertness.
Many a time, Misfeasor(out side legal saction) creeps in in his function which may help him fail his Legal Duty which vital in his administering things.Failure in legal duty may lead hi in the arena of ‘arbitrariness’, a very dangerous aspect officer faces, as Tort laws will surface making Revenue to face Vicarious liability which may mean the Revenue may be asked to pay exemplary damages too, so tread very carefully.
True revenue is needed but ensure you do not waste public exchequer moneys in unnecessary wasteful expenses to expend on avoidable issues by being very alert.
Public officer faces very onerous responsibilities towards citizens as also to legislature, for that purpose you are given all facilities . so you cannot afford to be a bit lethargic in dealing issues that concern public who are ever vigilant . Any wrong step leads to meaningless litigation, today government is the biggest litigant that means a lot of public money is just wasted is it not!
good one !!
good to hear from the hon’ble President on his expectations.
right view.