1. The Income Tax Appellate Tribunal is one of the oldest temples of justice in our country and as the saying goes – “the older the temple, the greater is its sanctity and the veneration it commands”. The Tribunal earlier functioned under the control of the Central Board of Revenue till 30-5-1942, subsequently its administrative control was transferred to the Legislative Department of the Government, which is now the Ministry of Law.
In the year 1940-41, the Income-tax Appellate Tribunal had only 3 Benches functioning at Mumbai, Delhi and Madras. Considering the need of the taxpayers and with the intention to render quick justice at the doorstep of the taxpayers, the Government sanctioned 63 Benches functioning from 24 cities. This proves that no other Tribunal in India has won such well deserved respect and confidence of the taxpayers.
2. The Tribunal is a final fact finding authority under the tax law. An appeal against an order of the Tribunal can be filed to the High Court only on substantial question of law. It is a matter of record that 85% of the appeals decided by the Tribunal are accepted by the assessees and department. Only 15% of the appeals come for consideration before the High Courts. Out of the matters which come for consideration before the High Courts by way of appeal, 65% of the questions of law are accepted by the High Courts as rightly decided by the Tribunal. It is only in the remaining 35% of the matters that questions of law are admitted by the High Court. This proves beyond reasonable doubt that both the assessees and the Revenue have tremendous confidence in the justice delivery system of the Tribunal.
3. Everyone concerned with it, admires the punctuality over the years in the functioning of the Tribunal. The Tribunal starts sharp at 10.30 AM not only in Mumbai but in the rest of the country, where its Benches are functioning. In response, the members of the Bar also reciprocate by extending their co-operation with the preparedness and discipline in presenting their cases.
It is therefore no wonder, that as on date, the Income–tax Appellate Tribunal is considered as one of the finest institutions of our country. This has been possible due to the collective efforts of the Honourable Members of the Tribunal and the Tax Bar.
4. The Members of ITAT are appointed by a process of interview by a Senior Judge of the Supreme Court, who is the Chairman of the Interview Committee. There is no second thought that the process of appointment of Members should not only be transparent and impartial, but most importantly free from executive interference; and exactly this purpose is achieved by the Interview Committee.
In the year 1995, there was a move to shift the Headquarters of the ITAT from Mumbai to Delhi. The ITAT Bar Association, Mumbai strongly objected to this move. This move was successful by timely intervention by the then Leader of Opposition in the Lok Sabha, Shri Atal Bihari Vajapayee, who in his letter dated 12-5-1995 stated thus: “….It will therefore be in the fitness of things if the Institution is allowed to continue in Bombay itself. As you might be aware, the Government’s policy is to shift more and more offices outside Delhi to remove congestion in the capital. Thus the shifting of this office to Delhi would be contrary to Government’s policy”. I am proud to say that the then Government accepted our representation and move to shift the Headquarters at Delhi was dropped.
I had the good fortune of experiencing the Bar Associations supporting the Tribunal in ensuring that it works with independence and without fear of interference. In the year 1996, when Honourable Shri T. V. Rajagopala Rao was President of the ITAT, there was a move by the Executive to involve the Law Secretary in the process of transfer of the Members. Such an action was a clear interference with the judicial independence of the Tribunal and resentful. The ITAT Bar Association of Mumbai approached the Bombay High Court, which has stayed this interference of the Executive [Income-tax Appellate Tribunal Bar Association v. UOI (WP No 2350 of 1996) (Income Tax Review April 2007 – Pgs. 1to 3)]. It was encouraging to see the Apex Court affirming this decision of the High Court in Ajay Gandhi v. B. Singh (2004) 265 ITR 451 (SC). In ITAT v. V.K. Agarwal (1999) 235 ITR 175(SC), the Apex Court, in a clear “no nonsense please” words held that any interference in the judicial functioning of the ITAT will lead to contempt proceedings.
In the year 1999, when additional five Benches were sanctioned to Mumbai there was constraint of the office space to accommodate additional five Benches in the same premises, where the present Benches were functioning. Hence, there was move to have five additional Benches at New Mumbai. Here, again the ITAT Bar Association approached the High Court of Bombay, due to which the additional five Benches are allowed to function in same premises. I recollect the inauguration of these new Benches by the then Law Minister, Honourable Mr. Arun Jaitley on 16-2-2001. This move helped not only the tax payers of Maharashtra, but also the tax administration and the Tribunal.
5. The Income-tax Act, 1961 is the only Central Act, which refers to 92 other Central Acts. In addition to this, income tax rules, notifications, circulars and amendments are recurring features as may be seen every year. Hence, the Income-tax Act is considered as one of the most complex laws of our country. The Members of the Tribunal, while deciding tax matters, get opportunity to study and consider all these Acts and also various State Acts. During their tenure, the Members of the Tribunal deliver a number of judgments and all these judgments are published in the electronic media. From the reported cases one can vouch that in the field of Transfer Pricing and International Taxation, the ITAT has immensely contributed to the development of International tax jurisprudence. By and large, the judgments of the ITAT have been approved by the High Courts and Apex Court.
It is with pride that in international conferences, the judgments of the ITAT are discussed at length for the precedent values it creates. Let me acknowledge that when the Asia-Oceania Tax Consultants Associations (AOTCA) International Tax conference was held in Mumbai from 19 to 21 November 2009, representatives from more than 14 countries visited the ITAT Benches at Mumbai to watch its proceedings. After witnessing the proceedings, they highly appreciated the process of justice delivery system adopted by the ITAT. I am happy to state that some of International professional Organisations have even made representations to their respective governments to adopt the Indian ITAT model for settling the tax disputes.
One can therefore easily judge the in-depth knowledge of Members by reading the qualitative orders passed by them. Their integrity can also be vouched for by the Tax Bar and the Revenue which represents the matters before the Tribunal.
With this experience and skill, the Tribunal Members, whose integrity is beyond any reasonable doubt, deserve to the elevated as High Court Judges after a reasonable exposure of 5 years or more on the Bench. In my long stint with the Tribunal, I have seen how the Members, by their sheer potential and rich experience, climbed the ladder of success by being elevated as the Judges of High Courts and also of the Supreme Court.
It is in this background, pursuant to the judgment of the Supreme Court, in Supreme Court Advocates–on–Record Association v. UOI striking down the National Judicial Appointment Commission Act and upholding the collegium system of appointments and judges, invited suggestions from all stakeholders on the measures to be taken to improve the collegium system. The All India Federation of Tax Practitioners (AIFTP) has filed a petition before the Apex Court urging the Constitutional Bench to consider the Members of the Tribunal as one of the most potential sources for elevation to High Courts.
I would be personally very happy, if this representation is implemented. This will be a good reward for the Tribunal for its ‘Platinum Services’ – to see its Members are recognised for elevation as High Court judges.
6. Watching the Tribunal, I feel saddened to see its Members working under service conditions, incommensurate with importance of the judicial positions they occupy. In this regard, much needs to be done urgently to reward their efficiency and hardwork.
For example, the salary rank given by the Seventh Pay Commission to Principal Chief Commissioners of Income-tax is glaringly higher than that of the Members of the Tribunal, though the orders of the Principal Chief Commissioner may be subject matter of appeal before the ITAT. This obviously appears to be a bona fide mistake on the part of Seventh Pay Commission. I hope the same will be rectified at the earliest.
7. The wisdom of the Tribunal Members should be seen as the intellectual property of the nation. I recollect that at the Members’ conference held in Mumbai on 4th November, 2006, the then Law Minister Honourable Mr. H. R. Bhardwaj had assured that the Government will increase the age limit of all the Members from the present 62 years to 65 years. This has however till date not seen the light of the day. The AIFTP has, once again, therefore made representation to increase the age limit of all Members from 62 years to 65 years.
8. As an admirer of the Tribunal, I foresee sweeping changes in the Tribunal’s justice delivery system with progressive technological upgradation. The Tribunal introduced the Concept of e-Court in the year 2012. When it will be fully developed, all Benches across the country will be linked to the Head Office at Mumbai which may facilitate quick disposal of matters.
9. One cannot forget the contribution of the ITAT for the development of Tax Bar. The “Nani Palkhivala Memorial National Tax Moot Court competition” was initiated by the Bar in the year 2004. For more than a decade, the ITAT has been providing the facilities of the Court rooms and its Members have also whole heartedly participated in the competitions – by guiding the law students who take part in the competition from different corners of our country.
10. On the Bar’s side, there was always a responsibility on it to support the Tribunal in preserving the purity and integrity of the institution. Looking back in the history, we can say with pride and confidence on the eve of ITAT’s platinum anniversary that the Bar has abundantly contributed to the development of this Mother Tribunal in this regard.
Let us work hand-in-hand and see that the Tribunal continues to retain its glory as one of the finest institutions in this country and as a model for other institutions to follow in India and rest of the world. On the whole, I feel upbeat and optimistic of a bright future for the Tribunal in the coming years!
My best wishes and warmest regards to the Hon’ble President and to the Hon’ble Members on this memorable occasion of the Platinum Jubilee of the ITAT.
[Source : Article printed in ITAT Platinum Jubilee Celebration souvenir held on 24th & 25th January, 2016 at New Delhi]