Vision 2020 for the Appellate Tribunal*
Hon’ble Mr. Justice Ashok Bhan
The author highlights a few points that we in the Tribunal must bear in mind as we prepare to face the challenges of the future.
Mr. Vimal Gandhi, President of the Income Tax Appellate Tribunal, Mr. Justice Rebello, Mr. Justice J. S. Narang, Mr. Dastur, President of the Income Tax Appellate Tribunal Bar Association, Mr. Sunil Talati, President, of the Institute of Chartered Accountants of India. It is my pleasure to be here today and interact with you and it is my pleasure also to inaugurate this very important conference which is taking place today.
What Mr. Dastur has said, what I am going to say or we are debating today is: What should be the vision for 2020. One of the demands which Mr. Dastur has made, that there should be Benches of the Supreme Court at Mumbai, Chennai, Bangalore, Kolkata. I am one of those persons who is absolutely against it. A constitutional court cannot be divided. If we have to adopt that system of having a appeal court, then let there be Supreme Court for appeals. So far as Constitutional Court is concerned, it should be only at one place.
The Income Tax Appellate Tribunal was established in the year 1941, on a demand from the assessees, perhaps the Bar also, that there should be an independent body of persons to determine the facts or there should be the final court of facts, so far as the Income Tax is concerned. Perhaps this was the first Tribunal which was created in the country. I don’t know whether it was then called Tribunal, Financial Commissioners, as Tribunals were known, when they were hearing revenue appeals. Over the past 66 years, it has fully justified its existence. People have faith in it. Few aberrations here and there are accepted. This is perhaps the only Tribunal, the existence of which has silenced the debate whether we should Tribunalise the justice or not. This is one of the Tribunals, existence of which is not questioned. There are many other Tribunals which have been constituted and which Governments want to constitute, their existence is being questioned or people are asking: If ultimately we have to go to the High Court or to the Supreme Court, why have Tribunals?
Earlier, you had a reference jurisdiction. After determining the question on facts, only the questions of law were referred to the High Court. The questions then debated was whether reference under section 256(2) should be there or not.
Whether you should go to the High Court subsequently or not, nonetheless, the question of law should be framed. Instead of rectifying that, they have made the third court of appeal. According to me, the Income Tax Appellate Tribunal should be the final court which determines the facts. Only the reference to the jurisdiction should be with the High Court or with the Supreme Court of India as the case may be and it should not be Court of appeal or third appeal, as it is now.
I will not respond to the criticism of Mr. Dastur. All that is stated may not be correct, but suggestions/criticism to the extent valid should be taken in the right spirit, because criticism is always welcome. There is nothing to be proud about. Nothing should be disliked about it. If it is correct, then we must accept it and try to improve our working. I would like to respond only to one suggestion, because this is not a debate going on. What Mr. Dastur has said, what I am going to say or we are debating today is: What should be the vision for 2020. One of the demands which Mr. Dastur has made, that there should be Benches of the Supreme Court at Mumbai, Chennai, Bangalore, Kolkata. I am one of those persons who is absolutely against it. A constitutional court cannot be divided. If we have to adopt that system of having a appeal court, then let there be Supreme Court for appeals. So far as Constitutional Court is concerned, it should be only at one place. There are many other points for which I am against it, but I will talk to Mr. Dastur after the conference, because I am not debating on that point.
What should be our vision for 2020? Our vision should be to prepare ourselves to meet the challenges we will face in the years to come and how to meet them. This should be our vision. With the globalization, many of the points are interaction of interplay of money from one country to another. Income earned in a foreign country being taxed in another country. How it should be taxed, there are treaties, tax treaties been entered into. Cost accountancy is question. How to account the income is becoming very important point. Transfer Pricing. All such tax matters are new matters, with which you are not familiar. There may not be many cases in the country which have been decided by the Tribunal. These matters have started cropping up in last 10-15 years. Now, how to prepare ourselves for that. One view is, let us start teaching tax laws in our colleges. In law colleges, we should teach our students on the subjects of tax aspects of globalization, so that we have to build now for future. Till then, present membership will go on, but in the years, we have to replace it, we have to give way to somebody else, like somebody has made way for you. For that, we have to train, we have to start from the beginning. That starting point should be in our colleges. We must introduce these subjects, we must have good teachers, who can teach these subjects to the students or new entrants for years to come. Ultimately in the years to come, they are going to replace you.
The second is, that we must train our existing strength on the subjects which we are going to face tomorrow. For that, there has to be an orientation course. There should be debate. There should be discussions. There should be conferences, where these matters are discussed. So, to say that, we are at least conceptually introduced to these subjects. Not the nitty-gritty of the subjects. Perhaps when the interest is created, we start reading on them. We start taking interest in them.
I had the pleasure of inaugurating Court Hall No. 1 this morning. A beautiful Court Hall. But my personal view without undermining the importance of infrastructure, which is absolutely necessary and it should be there. But, what matter more are persons who administer the justice sitting in the Court Hall. It has to be men of integrity, men of knowledge and men of character. At present, as Dr. Abdul Kalam has said, the country is facing crisis of character. We have to have people with character. We have to build that character in them. And until and unless we are able to build people with character, who are accountable to the people, Court Halls serve no purpose.
This computer will not build character. Computer can facilitate our working, yes, but, ultimately, it’s men who are sitting or manning chairs, who have to be introduced and who should be accountable. I have always maintained, till date, whether as a lawyer or as a judge, that judgeship is not a seat of power. It is a seat of power, because you can strike down the law made by Parliament of India. It is, for that purpose, not for throwing my weight around. We remain humble servants of the Judicial System. So please don’t take it as a seat of power for you have become a member of the Tribunal. No, it is your duty to decide and do justice. Decide in favour of the Revenue or against the Revenue, both, that should be the spirit. People in a seat of power or authority must be accountable. Let me illustrate it. I heard the other day, there is a lady, Aruna Roy, who is well-educated and is living in a village in Rajasthan. She said I am talking to you in Hindi now, I hope everybody understands it. She said “Yeh lesson ki hum sab accountable hain. Mujhe gaon ki simple lady ne sikhaya tha”. She gave many examples. She said “Main apni ladki ko dus rupia deti hun ki aap bazaar main jake use kharch kar aoh, ye saman le aoh, jab woh vapas aati hai, to main usse hisab leti hun. Kya paise kaise kharch kiye. Kya mera adhikaar nahi hai, ki maine jise apna paisa di hu, main usse hisab mang saku”, So people have placed their faith in us. We are accountable to them. We must, by doing our duty honestly, by doing our work religiously, we are not doing a favour, it is a part of our obligation. So please, we have to build that character in ourselves, that we must be men of integrity. As Justice Rebello has put it and Mr. Justice Khanna in Jabalpur Case. What is our strength, what was the strength of Judicial system, the faith of people in us? We don’t have an army, we don’t have the police, but still everybody respects you, why? Why do they respect us? They respect us because they have faith in us. Faith in our integrity. We may be wrong and when we err, we are invariably corrected. The Magistrate decides the case. District Judge reverses it. High Court upholds the view of District Judge. And now Supreme Court says Magistrate was right and the other two were wrong. There is nothing wrong in it, if the District Judge and High Court were found to be wrong and Magistrate is found to be correct. That is the corrective system, we are working with human beings. Now, and then any of them may decide it wrongly or has decided wrongly. We correct our own order in the Supreme Court. Two judges take one view and the other two judges take another view. Matter is referred to the larger bench. That is fine. It is within the system we work with and correct ourselves. That is how we function. You may decide wrongly when others think I am wrong, you are wrong. But, it should be honest and we must have it within ourselves.
So, you must grow! and the only way to grow is through knowledge, keep your eyes and ears open and please accept criticism and there is nothing wrong in accepting criticism, so long as it is not vicious, so long it is not wrongly bound, criticism should be welcomed. As Mr. Dastur has rightly pointed out, the kingdom, where the king refuses to listen to advice against his own advisors, that kingdom is bound to fall. So, we should not fall in that trap.
Another thing which I want to say, we must be men of knowledge. This 21st century is the century of knowledge, and if you are not people of knowledge, then of course, you are bound to make the mistakes. More mistakes, mistakes everybody commits, there is nothing wrong with them. But, we must be men of knowledge. How to become men of knowledge. We must train our judicial officers today. They should not read only tax matters. They should not read only Civil matter or CPC; they need not read only Excise law, they should read other books also, general literature, because it would widen your vision. You must read, you must keep yourselves abreast of latest in the world. So that’s how we grow. I am not the same person that I was 30 years back. I started thinking differently. After coming to the Supreme Court, my way of looking at things has changed. I feel myself today to be the guardian of the constitution, to be the guardian of rule of law. Then why do I decide a case. Of course we do decide cases also, rent revision also, 482 quashing matters also and several things, but, ultimately a role of, as I am talking of now, of course, I am not talking about Income Tax Appellate Tribunal. So, you must grow! and the only way to grow is through knowledge, keep your eyes and ears open and please accept criticism and there is nothing wrong in accepting criticism, so long as it is not vicious, so long it is not wrongly bound, criticism should be welcomed. As Mr. Dastur has rightly pointed out, the kingdom, where the king refuses to listen to advice against his own advisors, that kingdom is bound to fall. So, we should not fall in that trap. Yes, we must accept it, so long as it is not vicious or mala fide. We should, so long it is manageable and we find if criticism is correct, we should correct ourselves, this openness should be within us. The challenges which are to be faced tomorrow are manifold. The 21st century is not, actually any one century is not like any another century. I remember, my father says by the time I realize, my father was right, I had a young one to tell me I am wrong. Every generation at their self is a generation, not that earlier generation do not do the work, they do, but, next generation comes out with different ideas, so, please accept it, take it in that spirit. So, the challenge, which are, five or six topics, which we are going to discuss, debate. They are all important topics. I have just going through them, same, today only Justice Narang presiding at that function, I think, that is rather was happy to know that we have reduced our cases in Income Tax Appellate Tribunal to 75,000. Then what is the road ahead? What should be our goal today, tomorrow and road ahead?
The second is again very interesting, transfer pricing, very interesting subject we are going to deal with it now for years to come. Third is stress management, there is no doubt, that we all are under stress, this is nothing to do with any swami or no. This is just a subject which has been taught to us, in western countries, they say, people have become rich, then plenty of money, but, they do not know, how to handle their stress and therefore, this conclude syncretistic treat. Then what is happening? Our young generation.
You see, my grand child, she asked me, nana. “jab apke pas TV nahi tha, Radio nahi tha, Bijli nahi thi, Pani nahi tha, to aap bor nahi hote the”.
But, today’s children get bored very easily and that is stress. So that’s why it is very interesting topics and should be there, and of course, with the limited time and the three subjects are debated, there can be many more and I am sure, in the years to come and time to come, you will be debating more subjects, which are going to be challenging in the years to come. So, this is to be our vision, how to meet the challenges, which you are going to face in the years, you are not limiting that to 13 years or 20 years or it may after 30 years.
You may face a problem, but, you are saying up to 2020, what are challenges coming and how to prepare ourselves, it may be particular challenge two years, another challenge in five years, another challenge in ten years. So, I am very happy to be with you and sharing my thoughts with you and have the good opportunity of hearing Mr. Dastur, Mr. Rebello and Mr. Talati and of course your learned President Mr. Vimal Gandhi.
Thank you very much.
Source : Speech delivered at programme for Orientation & Training of New Members, Income Tax Appellate Tribunal an inauguration of new Court hall on 1-12-2007 at Mumbai.
Acknowledgement: We are thankful to Hon’ble President, Vice President of ITAT, Mumbai for granting us permission to print the article for the benefit of Tax Professionals.
*Reproduced with permission from the AIFTP Journal – June 2008 issue.