The author is severely critical of the proposal of the Government to appoint Members of the Tribunal on contract basis for 5 years subject to renewal at the discretion of the Government. He warns that making the Members insecure about their position in the Tribunal will undermine the independence and judicial functioning of the Tribunal. He implores all stake holders to strongly oppose the Government’s move.
1. The Income Tax Appellate Tribunal is in existence since 1941. Over the years it has served as role model for other similar institutions. The members are selected by a high powered selection committee chaired by Senior Judge of Supreme Court. There is complete transparency in the process of appointment. It is because of this high tradition that we have witnessed many talented professionals joining the institution and many have been elevated to the High Courts. The present system of appointment of members of ITAT till the superannuation is working very satisfactorily and there is absolutely no need to amend the service rules for appointment of members of ITAT. Earlier there was a move to appoint retired members of ITAT on ad-hoc, contract basis for two years. All the Tax Bar Associations have strongly opposed the move, which was then dropped.
2. It has been given to understand that, there is a move to amend the service rule for appointment of Members and Government is proposing to appoint Members of the Income Tax Appellate Tribunal on contract basis for five years and thereafter, their tenure will be renewed every five years at the discretion of Government.
3. All Tax Bar associations are strongly opposing the appointment of members on contract basis. According to us, fixing of tenure of five years could dissuade young professionals from joining the Tribunal. The professionals who are less than 55 years of the age, would never apply for the post of the member as they have to vacate the office at the end of five years, which is even before they complete the age of 62 years, which is the superannuation age for the members of the Income Tax Appellate Tribunal. Even the young departmental officials, who are eligible, may not apply for the post of the Members of the Income Tax Appellate Tribunal, because after five years, if their term is not renewed, they may lose the seniority or they may not be taken back by the Tax Administration.
4. According to us, appointing the members of judicial body for tenure of five years, will affect the smooth functioning of the Income Tax Appellate Tribunal. Appointment of members for a period of five years is also contrary to the ratio laid down by the Supreme Court, in the case of S. P. Sampath Kumar vs. Union of India, AIR 1987 (SC) 386. It may be appreciated that before the Income Tax Appellate Tribunal, the Tax Department is always a party and hence, giving power of re-appointment to the Finance Secretary and Law Secretary will affect the independency of the Income Tax Appellate Tribunal. In the past, the then Law Secretary tried to interfere with the administration of Justice and the Hon’ble Supreme Court had initiated the contempt proceedings against him. Income Tax Appellate Tribunal vs. V. K. Agarwal (1999) 235 ITR 175 (SC). Similarly, when the then law secretary tried to interfere with the transfer of members of ITAT, it is only due to PIL filed by the ITAT Bar Association and others that the independency of the Institution is upheld by the Apex Court in Ajay Gandhi vs. B. Singh (2004) 265 ITR 451 (SC), Income-Tax Review April, 1997, Page 1 to 3, Vol. XXIII No. 1.
5. Considering the past experience, all those concerned with the ITAT, should oppose the move of the Government, to amend the service rules of the members of the ITAT, and ensure that the Income Tax Appellate Tribunal discharges its duties without any fear or favour. We hope the Government will not take such a drastic step without any discussion or deliberation.
6. While addressing the Member’s Conference at Mumbai on 4th November, 2006, the Hon’ble Mr. H.R. Bhardwaj, Minister of Law & Justice gave the assurance that the age limit of all the members, will be increased from 62 years to 65 years. However, nothing has been done in this respect. If age limit is increased, there may not be immediate requirement of recruitment of new members on contract basis for five years, as the pendency before the Income Tax Appellate Tribunal has been reduced from 3,00,597 cases in the year 1998- 99 to 56,000 cases as on 1-3-2009.
The Income Tax Appellate Tribunal Bar Association, Mumbai has passed the resolution opposing the move of the Government to appoint members on fixed tenure of five years on contract basis.
We hope other associations will also support the cause of the Income Tax Appellate Tribunal Bar Association to maintain the independence of the mother Tribunal, which is one of the finest institution of our country.
Dr. K. SHIVARAM
(Reproduced with permission from the AIFTP Journal – April 2009 issue)