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.