Facts

The Tribunal is functioning since 21-5-1941. From its very inception, the President of the Tribunal has been exercising the power of transfer of the Judicial Members and the Accountant Members to the places where different Benches are functioning. The Ministry of Law and Justice in purported exercise of its power under Rule 10 of the Delegation of Financial Powers Rules, 1958, read with the Ministry of Finance O.M. No. F.10(13) B-Coord./79, dated 10-4-1975 and 8-3-1976 and in partial modification of the Department Letter No. F.3(10)/75 Admn. III (LA), dated 26-6-1978 directed that the President of India had been pleased to decide that President, ITAT shall henceforth submit all proposals for postings and transfers of members including Senior Vice-President and Vice-Presidents of the Income-tax Appellate Tribunal to the Ministry for prior approval.

The Appellant being aggrieved filed present Writ Petition before the Hon’ble Supreme Court.

Issue

Question that arose for the consideration of the Hon’ble Supreme Court was whether the Central Government can be said to have any power of transfer and posting of the members of the Tribunal?

Views

The Tribunal exercises judicial functions and has trappings of Court. The Tribunal functions under the Ministry of Law and Justice and the Law secretary     is the member of the selection Board. The Ministry of law and Justice exercises       a disciplinary power over the members of the Tribunal. The  functions of  the Tribunal being judicious in nature, the public have a major stake in its functioning, for effective and orderly administration of justice. The Tribunal, as   far as possible, should have judicial autonomy. Central Government cannot confer upon itself statutory power of transfer and posting of members of Income Tax Appellate Tribunal. Longstanding practice should be allowed to prevail over the

stand of the respondents. The Court prescribed the guidelines regarding posting    of members of the Tribunal.

Held

The Hon’ble Supreme Court held that keeping in view the fact that the independence of the Tribunal is essential; for maintaining its independence any power which may be conferred upon the executive  authority must be proved to be   in the interest of imparting justice. That long standing practice should be allowed to prevail over the stand of the respondents. However, the President cannot be   said to have an unguided, unfettered and unlimited jurisdiction as the same may  be flawed with great consequences.

Therefore, the following guidelines could serve the said purpose:

• Initial posting of a member shall be done by the Government in consultation with the President of the
• Postings to different Benches shall be done by the President having regard ordinarily to the following:
  • A member save and except for sufficient and cogent reasons shall not be posted at a place where he had earlier been practicing as an advocate or a Chartered Accountant, as the case may
  • A member may not be posted at a place where any of his parents, spouse or other close relation is practicing as an Advocate or a Chartered Accountant in taxation
  • Save and except for sufficient and cogent reasons, the member shall not be posted at a place for a period exceedingfive Ordinarily, a member may not be posted at a place where he was earlier posted unless a period of twoyears has elapsed.
• The President shall keep the Government informed about the orders of The Government, if it so thinks fit, shall have the liberty to bring to the notice of the President of the Tribunal  relevant facts including that transfer and posting of a member is not in conformity with the aforementioned guidelines. It shall also be at liberty to bring to the notice of the President any case of extreme hardship which may be faced by a member by reason of such an order of transfer and posting.
• The Government shall have further liberty to request the President to transfer a member from a particular Bench when itis in public interest

or in an exceptional circumstances. The President of the Tribunal, it goes without saying, shall consider the same in proper perspective. If the President refuses to comply with the request of the Central Government, although the transfer is in public interest in such a case it would be open   to the Central Government to pass order  of transfer.  (TP No. 5 & 6 of 1997  dt. 5-1-2004)

Editorial : Independency of the Appellate Tribunal is up held, guidelines are framed for transfer of Honourable members of the Appellate Tribunal.

“A ‘No’ uttered from deepest conviction is better and greater than a ‘Yes’ merely uttered  to please, or what is worse, to avoid trouble.”’

– Mahatma Gandhi