The author, an eminent advocate, who is at the forefront of the crusade to resolve the core problems faced by the Tribunal, sees a ray of hope that the attitude of utter indifference shown so far by the Government towards the welfare of the Tribunal will change after the appointment of Shri. Kapil Sibal as the Law Minister. The author makes a fervent request to the Hon’ble Law Minster that he should spare time to immediately address those problems
Those who practice before the Income –tax Appellate Tribunal (the “ITAT”), are well aware that in the year 1996, the then Law Secretary issued a notification stating that the Ministry of Law has the power to transfer the Hon’ble Members of the ITAT. The said notification was challenged by the ITAT Bar Association, Mumbai, and the then President of the ITAT was made respondent to support the petition. The Hon’ble Bombay High Court stayed the operation of the said notification (Income-tax Appellate Tribunal Bar Association of India v. UOI, W.P. NO. 2350 of 1996 dt. 6-3-1997) (Income-tax Review, April 1997, P. 1 to 3).
this kind of conduct and that too on the part of the Law Secretary, who is expected to maintain the independence of the Income tax Appellate Tribunal and not to interfere with its judicial functioning, amounts to gross contempt of court
Though Mr. N. A. Palkhivala had stopped appearing before the Court, as the President of the ITAT Bar Association, he appeared before the then Chief Justice of the Bombay High Court in this matter. It seems that this was his last appearance before this Court. The matter was thereafter transferred to Hon’ble Supreme Court. The Hon’ble Supreme Court upheld the order of the Bombay High Court (AIFTPJ-January, 2004, P. 28 (T.P no. 6 of 1997dt 5-1-2004) [Ajay Gandhi v. B. Singh (2004) 265 ITR 451 (SC)]. As per the guidelines, the President, in consultation with the Senior Vice–President and Vice-Presidents, has the exclusive authority to transfer the Hon’ble Members from one place to another. When the matter was pending before the Apex Court, the then Law Secretary once again tried to interfere with the independent judicial functioning of the Hon’ble Members of the ITAT. A contempt proceeding was moved against him and he was held for contempt (Income-tax Appellate Tribunal v. V. K. Agarwal (1999) 235 ITR 175 (SC), (190). In this case, the Apex Court observed as follows:
“In our view this kind of conduct and that too on the part of the Law Secretary, who is expected to maintain the independence of the Income tax Appellate Tribunal and not to interfere with its judicial functioning, amounts to gross contempt of court. It is a deliberate attempt on his part to question the judicial functioning of the Tribunal coming as it does from a person of his rank. It is rightly perceived by the President as well as the two concerned members of the Tribunal as a threat to their independent functioning in the course of deciding appeals coming up before them.”
It is very unfortunate that the mother Tribunal has not been getting the deserved attention. From 3-6-2010 till date, the ITAT is being headed by an Officiating President. When a person is functioning as an Officiating President, he has certain limitations. He is always at the mercy of the officials in charge
The contribution of Shri Rajagopal Rao then President of ITAT and the ITAT Bar Association, Mumbai in preserving the independence of the ITAT, deserves to be written in golden words. It is very unfortunate that due to frequent changes at the helm of the Ministry of Law and Justice (the “Ministry of Law”), the mother Tribunal has not been getting the deserved attention. From 3-6-2010 till date, the ITAT is being headed by an Officiating President. When a person is functioning as an Officiating President, he has certain limitations. He is always at the mercy of the officials in charge. Now, the law has been amended in 2013. As per the new provision, the President can be appointed from amongst sitting or retired Judges who have completed atleast seven years of service as a High Court Judge or from amongst the Senior Vice-President or Vice-Presidents. It may be appreciated that it is the ITAT Bar Association which has made strong representations to the Standing Committee that the President should be from the amongst the Hon’ble Members. We are pleased to know that the Government has accepted the suggestion partly, wherein, as per the new provision, the President could be appointed from amongst the Senior President or Vice–Presidents.
We are happy to note that Hon’ble Shri Kapil Sibal, the incumbent Law Minister, is a well known lawyer. He has always championed the cause of independence of judicial institutions. We are therefore positive that he will strengthen the institution by actively interacting with the Bar and members of the ITAT for the better administration of justice. Various Bar Associations will soon be having an interactive meeting with him and would be discussing the following agenda:
(1) Early appointment of a permanent President of the ITAT;
(2) Process of appointment of Senior Vice–President and Vice–Presidents;
(3) A Judicial enquiry, headed by a sitting or a retired Judge or by the President of the ITAT, in the alleged involvement of the Hon’ble Members of ITAT whose orders were linked to the episode of the Calcutta Bench, within a period of three months;
(4) Viability of the proposal of an e-Bench of the Supreme Court linking it to various High Courts, on the lines similar to the e-Bench of the ITAT;
(5) Bold steps to maintain the independence of the ITAT;
(6) Increase in the age limit of the Hon’ble Members of the ITAT;
(7) Institutionalisation of the process of elevation of the Hon’ble Members of the ITAT to the office of a Judge of the High Court; and
(8) Modernisation, transparency and the use of technology for better administration of the justice delivery system.
The Federation has extended an invitation to Hon’ble Law Minister to address tax professionals at the National Convention to be held in the month of December at Mumbai. The ITAT Bar Association has also extended an invitation to the Hon’ble Law Minister to visit the ITAT to see the functioning of the e- Bench of the ITAT and to have an interactive discussion with the Bar and the Bench, on issues relating to better administration of justice.
We hope that the Hon’ble Law Minister will discuss all the above issues and will take a positive step in this regard. Those concerned with the ITAT may send their constructive suggestions to the Office of the Federation.
Dr. K. Shivaram
Editor-in-Chief, AIFTP Journal
Reproduced with permission from the AIFTP Journal, May 2013
Dear Mr Shiv Ram, why are you spoiling your health by taking pain for ITAT, this is India and the country runs only on the shoulders of God. So please stop thinking about the noble institute of ITAT otherwise your health will spoil.
This my advice as a well wisher, because in Supreme Court the people have started saying that this kind of bloging are done by only those who dont have adequate works to do
Yes. Mr.DS is absolutely right. Some of the decisions of the ITAT are awful. Even the member other than the one who delivered it, who signed it, if brought to his/her notice will feel for such a silly order. But unfortunately we had to bear with such orders. If the law ministry could do some thing to avoid this type of situation it will be very good. As suggested by Mr.DS it should be about the constitution.
When the idea of division benches was conceived, the idea was that the judges will be a check against each other and the healthy tension between the judges will ensure a minimum level of justice. However, I donot know when do you see that benefit in this Tribunal ?
Is it not the time that the composition of division benches is so done as to make sure that these are not single benches sitting together with the senior single judge bench deciding which cases will be decided by junior single judge bench ? Smoothness to this degree is neither desirable nor necessary. Put a combination of Members with that healthy, but disciplined, tension on the bench with both the members of almost equal seniority, instead of finding most convenient members who are in awe for each other and would accommodate each other without asking a question.
When decision of an Authority for Advance Ruling, headed by a former Supreme Court judge, can be challenged before the High Court, what is wrong in an ITAT judgment, whether by a retired HC judge or anyone else, being challenged before the High Court ?
This is the practice in CAT, CESTAT and several other Tribunals as well.
There is no question of ego is these things. It is because of the Chair that they occupy, officers get their status and respect, and not because of the officers who occupy the Chair that Chair gets the status or respect. That’s the rule; exceptions apart.
When a sitting judge or retired judge of a High Court is appointed as President of ITAT, will it not result in demotion of the Judge of High Court ? An order passed by a bench or special bench in which the president is also a member would be appealable before High Court and a sitting judge in the bench hearing appeal may be a junior to the President who was a sitting judge of a High Court prior to his appointment as President of ITAT. To preserve dignity of a Judge of High Court who if appointed as President of ITAT, it should be provided that whereever any order passed by ITAT and the President of ITAT who was a judge of High Court, then such order should be diorectly appealable before the Supreme Court or in the alternatively, the President should never be a member of any bench and he should only be an administrative head.
In my view the contents of letter & charter of demandsare noteworthy to invite atttention of Hon,ble law minister who himself is an eminant lawyer par excellence would take positive steps to remove malaise & rot in the important institution of ITAT FULL FLEDGED PRESIDENT is necessary having Highly calibre Judicial background backed with experience in ITAT in cosonance with the rules & regulations under the law .
In my view the contents of letter & charter of demandsare noteworthy to invite atttention of Hon,ble law minister who himself is an eminant lawyer par excellence would take positive steps to remove lalaise & rot in the important institution of ITAT FULL FLEDGED PRESIDENT is necessary having Highly calibre Judicial background backed with experience in ITAT in cosonance with the rules & regulations under the law .
If Kapil Sibbal cannot handle it, nobody else can handle it too. Here is a nman who understands functioining of the judicial institutions inside out, and ability to take toughest calls. Why doubt his abilities ?
@ abha. What do you imply with Hobsons choices. There are 41 judges retiring, with 7 years experience, in next one year, and at least one of them will be meeting your expectations.
Although the appointment of Mr.Sibal as Minister of Law is appreciable and noteworthy, yet, he has his limitations. However, given his nature of working, I am sure that he will positively look into the affairs of the functioning of the ITAT and ensure that its independence is not eroded.
And yes, reconcile with the fact that Shri T V Rajgopala Rao is no more – no more in this Tribunal, no more in this world. You donot get people like him every now and then. ITAT was lucky to have one in its lifetime.
No institution is perfect; ITAT is no exception. Yet, ITAT has been a fairly effective institution all along. What you need to do to is to give ITAT an atmosphere conducive for independent and fearless functioning, incentive for honest conduct and a deterrent for improprieties. Even today, the same things continue but that is because of administrative failures as much in Tribunal as much in all walks of life.
Even appointment of President and Vice Presidents can make a lot of difference. That will reduce uncertainties a lot, and it will also start movement of career progress. A systematic mechanism for elevation of ITAT Members to the High Courts is also very very important. Today, Members are at the mercy of lobbyists to get their names for being considered. There are many many bright people, and some of them very young, who are outstanding material for High Court tax benches. There has to be a system to ensure that their names are at least considered by the High Courts in whose jurisdictions they have worked, or by the High Courts where they were enrolled as advocates. The possibilities of career growth can also lead to ITAT Members shunning cheap popularity and other distractions.
To the new President, who has all important role to play, the biggest priority has to administer the Tribunal in an objective manner, deciding their postings on the basis of sound policies, ensuring the checks and balances which are necessary for impartial functioning of division benches, ensuring proper grooming of younger members ( which is very important in ITAT, because most of the Members are very young and relatively new),promoting excellence and balanced approach, deterrence for corrupt practices (even when a section of Bar actually likes it) by anyone in or associated with ITAT, deterrence for judicial misconduct, discouraging excessive interaction of Bar and DRs with the Members, and, above all, leading by example.
Coming back to what LM can do, I think all it needs is that he send the message that the ITAT is not forgotten. He has to, on one hand, protect legitimate interests of the institution and its officers, and, on the other hand, ensure an effective administration ( you can do a lot by simply appointing a regular President ) which is able to run it. No President for last 3 years, no Sr Vice President for over 1 years, and almost 5 vacancies of Vice Presidents. Just filling up these vacancies will help a lot.
Remember, in every institution, ITAT included, not everybody is a liability. There are say some persons, say 10-20%, who will always be assets, and there will be some persons, say 10-20%, who will always be a liability. The remaining floating lot, i.e. fence sitters, are ready to become assets when there is some premium for being in this lot, but, they may also turn into liability when they see everyone else being a part of that lot. This is where good administration has a role to play, and by providing good administration, Law Ministry has a role to play.
VERY CHALLENGING,,,MR KAPIL SIBAL ,HOBSON’S CHOICE??
A very good letter. But the expectation that Mr.Sibal, Honourable Minister who is known for upholding independence of Judiciary will do something is only doubtful. Doubt is not about him but about the party under which he is functioning. Besides asking for so many things as narrated in the letter, one more thing need to be added. Some of the orders of some of the Tribunals are on the face of it is contrary to judicial discipline. Same member though was party to a particular decision is taking different decision in another case sitting with another member or some times in the same combination. There are quite a number of such decisions. This raises doubt about the quality of orders that are coming from the Bench. If required I am willing to supply ITA numbers and date of orders to compare and decide whether what I am stating is correct or not. Though it is not possible to attribute anything to members character it definetly leads to a doubt about their efficiency. If at all the members meet the Minister they should also raise the issue of accountability.