Shri. Virbhadra Singh, the Hon’ble Chief Minister of Himachal Pradesh, has insulted the Income Tax Appellate Tribunal, by calling it a “Kangaroo Court” which is motivated by “political vendetta”. Top tax lawyers across the Country are upset at the sorry state of affairs and are demanding that the learned Chief Minister should apologize for his intemperate remarks
ITAT earns well deserved and rich praise for stellar contribution towards justice
The ITAT has always received rich praise from constitutional authorities.
The late Hon’ble Chief Justice S. H. Kapadia once publicly declared that he preferred the reasoning of the Tribunal to that of the High Courts. The deep knowledge and understanding of the learned Members of the Tribunal on the accounting and legal aspects of the controversy makes their orders very persuasive, he said.
A similar sentiment with regard to the working of the Tribunal has been expressed by other eminent dignitaries as well (see Evolution of ITAT — Historical Perspective and Vision by Hon’ble Shri R. P. Garg, Vice President (Retd), where all the accolades received by the ITAT over the decades are summed up).
In fact, the ITAT has been lauded as a “Mother Tribunal” for its stellar contribution towards the cause of “Sulabh Nyay, Satwar Nyay” (Easy Justice, Speedy Justice).
Decorum thrown to the winds
However, in an unfortunate state of affairs, Shri. Virbhadra Singh, the Hon’ble Chief Minister of Himachal Pradesh, has lost sight of the norms of decorum and levelled serious allegations against the ITAT only because it dismissed an appeal filed by him to challenge an order of revision passed under section 263 of the Act.
“The ITAT has been manipulated. It is a kangaroo court set up by Union minister Arun Jaitley,” the learned Chief Minister said without any regard for the damage that his intemperate comments would cause to the noble institution.
He also attacked Shri. Arun Jaitley, the Hon’ble Finance Minister, of “manipulating the system” and targeting him for “political vendetta”.
ITAT applies well settled principles of law
Prima facie, the judgement of the Tribunal (Virbhadra Singh (HUF) vs. CIT) appears to be unexceptionable. The Tribunal has followed the verdicts of the Supreme Court in Max India Ltd. 295 ITR 282 (SC), G. M. Mittal Stainless Steel P. Ltd 263 ITR 255 (SC) etc with regard to the powers of the CIT u/s 263 of the Act to revise assessment orders and held that as the AO had not applied his mind, the revision order was justified.
“We fail to comprehend as to how the assessment order accepting the genuineness of carrying out the agricultural operations and earning a huge income can be considered as an order made after proper inquiry as has been canvassed by the assessee,” the Bench comprising of Hon’ble R. S. Syal and Hon’ble I. C Sudhir held.
“It is a case of a patent non-application of mind by the AO to the facts, which were loudly calling for in-depth investigation. In our considered opinion, the additional commissioner of I-T was fully justified in setting aside the assessment order and directing the AO to frame a fresh assessment,” it was further observed.
Misunderstanding caused by Members sent on tour?
The Hon’ble Chief Minister voiced a grievance that the learned Members of the ITAT who decided the appeal are not posted in the Chandigarh Bench but were sent on tour from Delhi.
“In spite of four judges in the tribunal, two special judges were sent from Delhi to hear my case, thus the matter is politically motivated,” the learned Chief Minister said.
However, it appears that the learned CM is not aware of the fact that the sending of Members on tour from one station to another is a routine affair, which is resorted to in order to balance the work loads of the Members and ensure speedy disposal of appeals.
No legitimate grievance can be raised by any litigant only because his appeal is dealt with by Members who are “on tour”.
Do such intemperate comments constitute contempt of Court?
The larger issue is whether if a litigant casts aspersions on the integrity of a judicial body and insults it by calling it a “Kangaroo Court”, he can be hauled up for contempt under the Contempt of Courts Act, 1971.
Under section 255(6) of the Income-tax Act, 1961, all proceedings before the ITAT are deemed to be “judicial proceedings” within the meaning of sections 193 and 228, and for the purpose of section 196 of the Indian Penal Code, 1860. It is also solemnly proclaimed that the Appellate Tribunal shall be deemed to be a “Civil Court” for all purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898.
The judgement of the Supreme Court in ITAT vs. V. K. Agarwal 235 ITR 175 makes it clear that the Tribunal is indeed a “Court” and that contempt of it is a punishable offense.
The law as to what constitutes “contempt” of Court has been made clear by the Hon’ble Supreme Court in its latest judgement dated 21st October 2016 in Het Ram Beniwal vs. Raghuveer Singh AIR 2016 SC 4940. The Court observed as follows:
“It is the right and interest of the public in the due administration of justice that have to be protected … Vilification of judges would lead to the destruction of the system of administration of justice. …. Accusing judges of corruption results in denigration of the institution which has an effect of lowering the confidence of the public in the system of administration of justice. A perusal of the allegations made by the Appellants cannot be termed as fair criticism on the merits of the case … The Appellants indulged in an assault on the integrity of the judges of the High Court by making baseless and unsubstantiated allegations ….”
Prima facie, calling a judicial body a “Kangaroo Court” does have the effect of lowering the confidence of the public in the system of administration of justice.
The situation is worsened by the fact that the person leveling the allegation is not an ordinary disgruntled litigant but is one occupying a high constitutional position.
Complaints by the ITAT Bar Association and the AIFTP
The ITAT Bar Association and the AIFTP, which represents professionals practicing taxation laws across the Country, have passed resolutions condemning the statements made by the Hon’ble Chief Minister. Both august bodies have also addressed representations to Shri. Ravi Shankar Prasad, the Hon’ble Law Minister, and also to Hon’ble Justice (Retd) Dev Darshan Sood, the President of the ITAT, requesting that appropriate legal action may be initiated in the matter so as to prevent the confidence of the citizens in the justice delivery system of the ITAT from being shaken.
It is hoped that the Hon’ble Chief Minister will show remorse and apologize for his intemperate remarks against the ITAT before matters escalate further.