ITAT Bar Seeks Judicial Probe Into Allegations Of Corruption In The ITAT

9th March, 2012

To,
The Hon’ble Shri Salman Khurshid
Minister for Law & Justice
Government of India,
4th Floor, “A” Wing,
Shastri Bhavan
New Delhi -110001.

Sub:(i) Our concerns regarding the Income–Tax Appellate Tribunal and the ongoing inquiry, and (ii) Request for an early appointment

Respected Sir,

1. The Income -Tax Appellate Tribunal Bar Association, Mumbai, is one of the oldest Tribunal Bar Associations in our country. Many of the stalwarts in the field of income-tax practice are our members. The late Mr. Nani Palkhivala was our President from 1967 to 2002. One of the objects of our Association is to uphold the prestige and integrity of the Income -Tax Appellate Tribunal [“I.T.A.T.”], which is one of the most respected tribunals in the country and which is regarded as the Mother of all tribunals in India.

2.In May, 2008, the Central Bureau of Investigation carried out search operations against a Member of the I.T.A.T., an Advocate and partners of a Chartered Accountant firm, amongst others, at Kolkata. During the course of search, cash, documents, hard discs, etc. were found and seized. Seemingly, there was a serious and large scale racket of bribing Members of the I.T.A.T. in order to obtain favourable orders. Wide publicity was accorded by the media to this episode which resulted in adverse publicity for the Tribunal.

3.Since this was a very serious matter tarnishing the name of a reputed legal institution and involving a Member of the I.T.A.T. who was discharging judicial duties, our Association, at a meeting held on 6th June, 2008, passed a detailed resolution requesting for a speedy investigation and trial of the case. [copy enclosed]. The same had been forwarded to all concerned persons/authorities.

4.Almost 4 years have passed from the time of the unfortunate event. Very little progress has been made during this period. The bedrock of the efficacy of any judicial organization is public confidence. This incident has dented the reputation of the Tribunal in the public perception. Even the Chief Justice of India was constrained to express the view that it was necessary to have speedy action taken. You will appreciate that in matters of judicial propriety, it is the perception of the general public backed by the determination of a judicial and independent agency that is very important. As no visible progress has been made in the last 4 years and as future proceedings may at this rate conservatively take another 5 or 6 years, one has to think of some speedy measure whereby the good name and excellent reputation enjoyed by the ITAT is maintained and not sullied by this incident and the whispers it has generated.

5.We strongly urge for your consideration that this being a judicial matter, in consultation with the Chief Justice of India, a serving or retired Supreme Court or High Court judge may be appointed to look into the matter, examine the facts said to have been collected, interview the concerned persons, consider their submissions and then determine whether there is any basis for the suspicion that the Member has outsourced the writing of the judgment as appears to be the view of the investigating agency. If the report is adverse to the concerned person, then it may be seriously considered whether the services of the Member should not be peremptorily terminated. The Supreme Court of India in Ajit Kumar v. State of Jharkhand & Ors. Civil Appeal No.2420 of 2011 reported in (2011) 11 SCC 458 seems to have upheld such an approach.

6.A judge would be able to look into the suspect orders passed by the concerned Member to determine whether what is alleged to be an “outsourced” order is in conformity with the language, style of writing and approach adopted by the Member in his other (undisputed) orders or whether it is the creation of another. He can also determine how a copy of the concerned order was on the hard disk said to have been seized from the office of the concerned professional person under suspicion and why and how such order was on the hard disk prior to the date of its pronouncement. All these are matters which a judge can look into and opine upon far better than an investigating agency. The learned judge would also be well suited to opine upon the role of the professionals allegedly involved in the matter.

7.You will appreciate that once there is a tarnishing of the name of an institution, it is very difficult to restore its previous glory. We are, therefore, making this suggestion for your kind consideration. We appreciate that in picking the bad fruit, if any, the tree must not be destroyed. A judge in submitting his report would ensure that.

8.We would indeed be obliged if you could give us an appointment whereat the representatives from our Association could avail the opportunity of personally communicating their view in the matter. It would be greatly appreciated if on your next visit to Mumbai, such opportunity is afforded.

9.In the meantime, we most humbly pray that speedy action be taken in the matter. Our respects to you and admiration for the work that you have been doing.

Yours truly,
For ITAT Bar Association
Honorary Secretaries