A Bill called “The Tribunals, Appellate Tribunals and Other Authorities (Conditions of Service) Bill, 2014” (pdf) has been introduced in the Rajya Sabha. The Bill seeks to regulate the terms of appointment and service of the Members of several Tribunals including the Income Tax Appellate Tribunal (“ITAT”). Clause 4 of the said Bill provides that “The Chairman and every other Member shall hold office as such for a term of five years from the date on which he enters upon his office and shall be eligible for reappointment for another term”.
It has not been appreciated by the persons/ parties who have introduced the said Bill that appointing Members of the ITAT for a limited period of 5 years and thereafter requiring them to seek reappointment (at the discretion of the Central Government, the appointing authority) has several disadvantages such as:
(i) It will discourage young professionals from joining the ITAT because of the insecurity of their reappointment as Members after the expiry of 5 years. If the professional is not reappointed as a Member after the expiry of 5 years, he will be unable to go back to practice in view of the Notification prohibiting ex-Members from practice. Even if the Member is eligible to resume his practice, it would be impractical for him to do so, given the lapse of time;
(ii) It will hamper the independence of the Members and their ability to take decisions in favour of the taxpayers. The Members will always fear that their reappointment is at risk if they do take bold decisions in favour of the assessee and against the Government (which is the re-appointing authority). This will destroy the fierce independence for which the ITAT is presently famous and for which it is held in great esteem by the taxpayers.
If the concern of the draftsmen of the Bill is that appointing ITAT Members till superannuation means that corrupt and/ or incompetent Members cannot be removed, that concern is unfounded. Under the “doctrine of pleasure” recognized under Article 310, all civil posts under the Government are held at the pleasure of the Government and are terminable at its will. In Ajit Kumar vs. State of Jharkhand (2011) 11 SCC 458 the Supreme Court held that the disciplinary authority could even dispense with an enquiry if it was of the view that an enquiry was not practicable to be held (e.g. in the case of a Judge who is alleged to have ‘outsourced’ judgements). This principle was applied recently in Mahesh Kamat vs. Kadamba Transport (pdf) where the High Court upheld an order of “compulsory retirement” on the ground that it was in public interest (see news item).
Protest from professionals & stakeholders is required:
It is imperative that the proposed move to appoint ITAT Members for a period of 5 years be opposed vociferously by taxpayers, professionals and all others having a stake in the independence of the ITAT. The Bar Resolution has already passed a resolution condemning the proposal. If you are also opposed to the proposal, please use the comment box to say so.
For more see the article by Dr. K. Shivaram, Senior Advocate