“2016 – Platinum Jubilee of the Income Tax Appellate Tribunal & Golden Jubilee of the Income Tax Appellate Tribunal Bar Association, Mumbai”
The Income Tax Appellate Tribunal which is considered as mother Tribunal of all the Tribunals was established on 25th January, 1941. It will be celebrating its landmark 75th year on 26th January, 2016. It is seriously felt in all quarters that an honest attempt should be made by the Bar and the Bench and the authorities concerned with it, to retain its glory as one of the finest Institutions of Our Country
While addressing the Chief Justices and Chief Ministers Conference, the Hon’ble Prime Minister of India has expressed great anguish at the interminable delay in disposal of appeals by Tribunals. With great respect it is submitted that ITAT is an exception to the rule and cannot be subjected to the same criticism as the other Tribunals may be lacking in certain respects, surely. In fact ITAT has largely lived up to the promise of ”Sulabh Nyay! Satwar Nyay!” (Easy Justice! Speedy Justice!). ITAT pendency of appeals is about 1,04,281 cases as on 1-4-2015 (Refer page No. 49 of this Journal). It is mainly because the Govt. has not appointed the members within a reasonable time. The sanctioned strength of the members of the ITAT is 126 whereas only 67 members are available discharging the statutory duties. If the vacancy is filled up within reasonable time the pendency can be reduced to at least 50,000 within a reasonable time of two years. Ideally, the taxpayers should get the finality to the assessment at least within two years of the assessment order. Due to certain unfortunate incidents few years back, the confidence of the taxpayers has shaken. Hence it is the Bar and the Bench which may have to play a positive and effective role to bring back the status of the mother Tribunal as one of the finest institutions of our country. It is the ITAT Bar Association Mumbai with the help of other associations and support of the then President of the ITAT, Hon’ble Mr. T.V. Raja Gopala Rao, the independence of the Institution was saved by filing of a PIL. Then Law Secretary was held liable for contempt for interfering with justice delivery system. According to me that was the golden period of the ITAT. The Tribunal will be celebrating 75 years in the year 2016 and the ITAT Bar Association Mumbai will be celebrating its 50 years. On this 75th milestone occasion, introspection will be required. We have many professionals who are practicing before this institution for more than 50 years by analysing the issues where we failed, how we failed, what remedial measures can be taken, etc. We have to make the celebration as a memorable one so that the taxpayers will gain the confidence that there is one institution, which renders the justice without any favour or fear within a reasonable time. Therefore, some of the suggestions are submitted for debate as below:
1. Reducing the pendency
i. When Finance Bill, 2015 becomes an Act, the SMC bench can dispose the matters where the assessed income is
Rs. 15 lakhs or less. Out of total pendency at least 20% of the cases where the assessed income will be less than
Rs. 15 lakhs, this will help to quick disposal of matters.
ii. Revenue’s appeal less than Rs. 4 lakhs may be taken out of turn for hearing.
iii. Covered matters by Supreme Court, jurisdictional High Court or in assessees own case, if an application is made can be taken out of turn for hearing.
Members of the ITAT on their own or with the help of the Bar and revenue, the matters can be sorted out and can be kept for direction. If it is fully covered, the matters can be disposed of straightaway. In case it requires detailed hearing a specific hearing may be given.
2. Quality of orders
The Tribunal being the final fact finding authority, it has greater responsibility to render highly qualitative order. One will have to appreciate that hearing the appeals before Tribunal, the Hon’ble members are not merely adjudicating on the issues before them but they are invariably deciding on the fortunes of the assessees. On facts the Order of the Tribunal is final. One wrong decision against an assessee may ruin his life and relegate him to the position of a pauper. At the same time, if against the Government, it may affect the coffers of the Government to an extent of a drop in an ocean. Thus, imagine the Tribunal’s responsibility towards the taxpayers and with the Government.
3. Use of technology
By use of technology the entire filing process of the ITAT may be digitalised. One may be able to find out which are the issues pending before various benches of the Tribunal. If common issues are involved in different benches, the matters can be tagged together and kept for hearing. This will help to reduce the pendency in large number of cases.
4. Role of the Bar
If the representation is good, of course, the quality of the orders will greatly improve in the mutual interest of both. Good Bar makes a Good Bench. It has been observed that many of the professionals send the clerks and staff members to take an adjournment before the Tribunal. Indeed, it is a sorry state of affairs not befitting to the profession ! Here, it may be noted that only the persons authorised under section 288 who can appear. Lot of time of the Tribunal is lost due to not complying with the procedural norms. Hence, it is necessary that the check list may be followed which is published in the www.itatonline.org.
5. Knowledge of General law and Refresher Course to Honourable members
Income-tax Act, 1961 refers to 98 other Central Acts and various State Laws. Therefore, to decide important issues before the Tribunal, it is very essential to know for the Tribunal what the General law is. The tax practitioners must make sincere attempts to be up-to-date on general law so that the representation can be made effectively as per general law. Similarly, there has to be annual refresher course for Honourable members wherein the senior members and Judges who decide the tax matters may guide the Honourable new members about the general law and International taxation issues. This practice will go a long way to render and deliver qualitatively superb judgments.
6. Institutionalisation of the process of elevation of Members to the High Courts
Till now very few members of the ITAT have been elevated to the High Courts. There are good number of Members who deserve to be elevated to the High Court, however, there is no mechanism to find out the potential members. As the National Judicial Appointments Commission Act is notified, there has to be an institutional mechanism to elevate the deserving members to the High Court. If such a system is not developed, then, the young and talented professionals may not join the Bench at all. Thus, it will be a great loss to the institution. Now the President himself being a retired judge of High Court, he can interact with the NJAC for elevation to High Court or he may propose the deserved members for the consideration as elevation to High Court.
7. Increase in the age limit of the retirement of members from 62 to 65
The President of the ITAT retires at the age of 65 whereas the members at the age of 62. The then Law Minister, Mr. H. R. Bhardwaj, while addressing the members Conference at Mumbai on 4th November, 2006 stated that the Government will increase the age limit of all the members from the present 62 to 65. In a PIL filed by the Sales Tax Bar Association to increase the age limit of members of the Sales tax Tribunal, the Bombay High Court directed the Government for such increase in the age limit of all the members. This guideline of the Bombay High Court can equally be followed for the age limit of ITAT members.
8. Infrastructure and allocation of funds
Tribunal is functioning under the Ministry of Law and it is always short of sanctioned funds. The ITAT has Benches in 26 centres. It is desired that unless the proper infrastructure is provided to all the Benches, the institution may not be able to render the justice at the speed at which it is required to be delivered.
9. Code of conduct for the professionals who practice before the ITAT
The code of conduct adopted by the Judges has been recommended by the Federation has been adopted by the members of the ITAT. Refer itatonline.org. Similarly the AIFTP and ITAT Bar Association adopted the code of ethics to its members. It is desired that all of us must follow the code of ethics. If any of our members are not following the same may be brought to the notice of the respective Association to which he/she belongs.
10. In-house mechanism
There has to be in-house mechanism to evaluate the quality of order and the overall functioning of the Tribunal. Federation and ITAT Bar Association at Mumbai has a high powered ethics committee headed by eminent professionals. Any members of the Bar, members of the ITAT or departmental representative can bring to their notice any unethical practice by the tax professionals who are representing before the Tribunal. However, neither the assessees nor the professionals have come forward to take advantage of this Forum. We are deeply concerned with unpolluted justice system in the Income Tax Appellate Tribunal all over India. We are also having ITAT Bar Association’s Co-ordination Committees. We, therefore desire that the members should sent objective suggestions for better law and better justice delivery system before the ITAT.
11. Honouring professionals who are practising before the Tribunal for more than 50 years
When Tribunal celebrate 75 years of its existence, it is worth considering whether the ITAT should honour professionals who are men of integrity and contributed for development of the ITAT and who are practising more than 50 years before the ITAT. In doing so, we will be paying the debt of the noble profession which we are practising.
Above are the few thoughts, there could be many more other valuable suggestions about which the readers may write to us, the ITAT Bar Association’s Co–ordination Committee will certainly take up the issues / suggestions with the concerned authority for its consideration.
Dr. K. Shivaram