The ITAT Bar Association has taken strong objection to the actions of the Registrar of the ITAT of acting as a “Court” and arrogating to himself, inter alia, the power to condone delay in filing appeals. The Registrar’s office is insisting that even routine issues like clearing procedural defects in appeals should be handled as “judicial proceedings” with a formal hearing. It is stated that such actions are not only contrary to the statutory provisions but are causing enormous hardship to taxpayers. The Bar has requested the Hon’ble President to abrogate the unlawful practice with immediate effect
Text of representation filed by the ITAT Bar Association to the Hon’ble President of the ITAT
24th May 2018
The Hon’ble President of Income Tax Appellate Tribunal
Mumbai- 400 020
Ref: Order dated 5th October 2017
Sub: Registrar of ITAT presiding over a Court
The Income Tax Appellate Tribunal has 63 Benches at 29 different stations and has been unanimously accepted as an exemplary institution. It is for the first time in 77 years of the ITAT’s existence that a Registrar has been empowered to preside over a court only in Mumbai. Such a step has caused great inconvenience and grievance to all the members of the Bar. By this letter we seek to bring to your Honour’s notice, our objection against the vesting of such powers with the Registrar.
On behalf of the Income Tax Appellate Tribunal Bar Association Mumbai, we would like to place our strong objection and protest against above referred order.
The order dated 5th October 2017 issued by the Asst. Registrar mentions that Your Honour has passed an order whereby he has been authorised to preside over a Court for the purpose of discharging his statutory functions as per the provisions of Income Tax (Appellate Tribunal) Rules, 1963 (hereinafter referred to as the “Rules”).
With due respect, we submit that the provisions of Income Tax Act, 1961 (hereinafter referred to as the “Act”) as contained in sections 252 to 256 do not authorize the Hon’ble President of the ITAT to constitute a Court which is presided over by the Registrar, ITAT.
Hence, the order referred in the order dated 5th October 2017 itself is not in conformity with the statutory provisions.
We, as the Bar pray that Your Honour may be pleased to withdraw the said order after considering the following:
1. The provisions of section 255 (1) of the Act provides that the powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the Members thereof. Thus, a Court or Bench can be constituted by the President subject to the provisions of sub-section (3) of section 255 of the Act from among the Members. The Registrar, not being a Member, cannot conduct a Bench or Court. The said order is beyond the scheme of the statutory provisions.
2. Your Honour will appreciate that sub-section 6 of section 255 of the Act specifically mentions that the proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings for the purposes of section 193 and 228 of the Indian Penal Code (45 of 1860) and the Appellate Tribunal shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXXV of the Court of Criminal Procedure 1898). As mentioned earlier, the Registrar cannot constitute a Bench.
He is not competent to discharge the functions of the Appellate Tribunal. Thus, the proceedings conducted by him are neither judicial proceedings nor can he constitute a Court which is a Civil Court for the purpose of section 195 and Chapter XXXV of Code of Civil Procedure, 1898.
3. Rule 4A of the Income Tax (Appellate Tribunal) Rules 1963 prescribes the powers and functions of the Registrar. For the sake of convenience, the same is reproduced hereunder:
4A. [(1) The Registrar/Deputy Registrar/Assistant Registrar shall have the custody of records of the Tribunal and shall exercise such other functions including weeding out of old records as may be assigned to him under these rules by the President, Senior Vice-President, Vice-President of the concerned Zone or Senior Member of the Bench.]
(2) Subject to any general or special order of the President, the Registrar shall have the following powers and duties, namely: —
[(i) to receive all appeals, miscellaneous applications, stay petitions as well as other documents including applications for early hearing, transfer of appeals, applications for adjournment;]
(ii) to endorse on such appeals and applications the date of receipt for the purpose of calculating limitation [and the amount of fee received];
(iii) to scrutinize all appeals and applications so received to find out whether they are in conformity with rules;
(iv) to point out defects in such appeals and applications to the parties requiring them to rectify by affording reasonable opportunity and, if within the time so granted defects are not rectified, to obtain the orders of the Bench for the return of the appeals and applications;
(v) to check whether the appeal or appeals are barred by limitation and, if so, intimate the party and place the matter before the Bench for orders;
[(va) to send the memo of appeals, applications, petitions along with enclosures to the opposite party (respondents) within a reasonable time from their institution by the applicant/Department and to receive cross objection on the appeal filed by the applicant/Department and to carry out similar functions as indicated in sub-rules (ii) to ( v) of this rule;]
(vi) subject to the directions of the President, Senior Vice-President, Vice-President and Senior Member of the Bench, to fix the date of hearing of the appeals and applications and direct the issue of notices therefor;
(vii) to ensure that sufficient number of cases are fixed before the Bench or Benches under the directions of the President, Senior Vice-President, Vice-President or Senior Member, as the case may be;
(viii) to bring on record legal representatives, in case of death of any party, to the proceedings;
(ix) to verify the service of notice or other processes and to ensure that the parties are properly served, after obtaining the orders of the Bench whenever required for substituted service;
(x) to requisition records from the custody of any authority;
(xi) to allow inspection of records of the Tribunal;
(xii) to return the documents filed by any authority on orders of the Bench;
(xiii) to consolidate the appeals relating to the same assessee or the same issue or for any reason on the direction of the President, Senior Vice-President, Vice-President or Senior Member;
(xiv) to fix cases out of turn on the direction of the President, Senior Vice-President, Vice-President or Senior Member;
(xv) to certify and issue copies of the orders of the Tribunal to the parties;
(xvi) to grant certified copies of documents filed in the proceedings to the parties, in accordance with the rules;
(xvii) to grant certified copies of the orders of Tribunal for publication, in accordance with the rules;
(xviii) to segregate cases to be heard by Single Member and fix them for hearing separately;
(xix) to ensure that remand reports are submitted in time whenever called for by the Bench by issuing necessary reminders to the authority concerned;
(xx) to obtain orders of the Bench on applications for withdrawal of appeals and applications and put up before the Bench;
(xxi) to refund the institution fee on the direction of the Bench.]
4. Thus, Rule 4A of the said Rules does not give any power to the Registrar to preside over any Court.
Your Honour’s specific attention is drawn to the provisions of clause (b) of sub rule (2) which deals with the procedure when an appeal is instituted with the Appellate Tribunal is barred by limitation.
This rule specifies that the Registrar has to place the matter before the Bench for orders. The Registrar cannot pass any order with respect to the same.
Here, it may not be out of place to mention that sub-section 5 to sections 253 of the Act provides that the Appellate Tribunal may admit an appeal or permit the filing of a Memorandum of cross objections after expiry of the relevant part referred to in sub-section 3 or sub-section 4 if it is specified that there was sufficient cause for not presenting it within that period.
Thus, as per the above provisions, the discretion to condone the delay in filing an appeal is vested with the Appellate Tribunal to be exercised by the Bench. The Registrar, ITAT cannot discharge the duties of the Bench.
5. Similarly, the duties mentioned in clauses (vi), (vii), (viii), (xiv) are to be performed by the Registrar subject to the directions of the President, Sr. Vice-President, Vice President and Senior Member of the Bench. Thus, the Registrar cannot be empowered to act on his own and to constitute a Court.
6. The Bar was shocked when it came across the order dated 1st May, 2018 passed by the Bench ‘H’ of the ITAT, Mumbai Bench in ITA No. 6339/M/2017 in the case of Shri Hiten Ramanlal Mahimtura.
After going through the order, we realize that the Registrar ITAT while presiding over the Court has passed an order in which he has condoned delay and granted stay against the recovery proceedings in the garb of an inter-locutory order.
This act of the Registrar goes beyond the statutory powers vested in him and deserves to be dealt with appropriately. We request Your Honour to take appropriate steps to that effect.
7. Your Honour will appreciate that we have received information from our Members that the office of the ITAT is not accepting any letters written in response to the defect notices.
In these letters, the assessees have informed the Registry that the defects pointed out were removed and have placed supporting documents on record. However, the office of the ITAT has refused to accept the same and directed the assessees or their authorised representatives to appear before the Registrar in his Court on the appointed date to get the defects cured.
This approach of the office of the ITAT is causing enormous inconvenience to the assessees. Instead of the defects being cured by filing letters and documents in the office of the ITAT, assessees or their representatives are now forced to attend the Court presided over by the Registrar. The constitution of the Court presided over by the Registrar is highly unreasonable, arbitrary and illegal.
8. Thus, we pray that:
(i) The order which empowers the Registrar ITAT to preside over a Court and the order dated 5th October, 2017 may be withdrawn with immediate effect.
(ii) All orders passed by the Registrar in the interregnum may be treated as void ab initio or invalid and the same may be withdrawn.
(iii) Appropriate action may be initiated for passing the order, which led to the order dated 1st May, 2018 being passed by one of the Benches of the ITAT.
For Income Tax Appellate Tribunal Bar Association
A bold and correct approach by the President, ITAT Bar Association. The procedure adopted is unheard of, unusual, illegal and should discontinue forthwith.