Appointment of a Judge as President of the Income Tax Appellate Tribunal – Is he restricted to administrative duties or can discharge judicial work as well? Appointment of Vice–President of ITAT?
Section 252(3) of the Income-tax Act, 1961 was substituted w.e.f. 1/6/2017 to empower the Central Government to appoint a sitting or retired Judge of High Court and who has completed at least seven years of service as a Judge in a High Court, as the President of the ITAT. Before the substitution of the section, a President was appointed from amongst the Vice-Presidents or the Sr. Vice-President. Vice Presidents are appointed under Section 252(4) of the Act from amongst members of the Appellate Tribunal. Therefore, before the section was substituted, the pool from which a Vice President or a President was to be appointed was amongst the members of the ITAT. Under the substituted Section 252(3) of the Act, a qualified Judge is appointed directly as President and not from amongst the pool of Members of the ITAT.
The question for consideration is whether a (Judge) President can exercise and discharge Judicial duties?
There are three different schools of thought on this issue. The first takes the view that only a member can exercise and discharge duties sitting in Benches to be constituted by a President (Section 255(1) of the Act).
The second school of thought is that he can sit singly and dispose of any case [Section 255(3)].
The third school of thought is that he can sit in the Bench as he is the President of the ITAT as he satisfies the qualifications to be a judicial Member of the ITAT.
ITAT Members (Recruitment and Conditions of Service) Rules, 1963 govern the appointment of Members of the Appellate Tribunal. A (Judge) President is not appointed under these Rules and therefore is not a Member within the meaning of Rule 2(c) read with Rule 3(3).
The only powers vested in a (Judge) President are:
(1) To constitute Benches [Section 255(1)] of the Act.
(2) To sit singly (with some violence to the language of Section 255(3) of the Act).
(3) To refer a matter to a Third Member.
This is in studied contrast with other provisions constituting other Tribunals. For example the provisions relating to the functioning of the Authority for Advance Ruling provide under section 245-O(7) that “A Bench shall consist of the Chairman or Vice-Chairman and one revenue Member and one law Member.
A member u/s. 245N(f) defines a member to include the Chairman and the Vice-Chairman.
Similarly under the Securities and Exchange Board of India Appellate Tribunal (Procedure) Rules, 1995, Section 15L provides that :’A Securities Appellate Tribunal shall consist of a Presiding Officer and two other Members, to be appointed, by notification, by the Central Government’.
Here the term Presiding Officer is on par with that of a President of the Appellate Tribunal.
Section 407(c) of the Companies Act, 2013: (Chapter XXVII)provides that a Member means a member, whether Judicial or Technical, of the Tribunal or the Appellate Tribunal and includes the President or the Chairperson, as the case may be.
Section 419 of the Companies Act provides that:
(2) The Principal Bench of the Tribunal shall be at New Delhi which shall be presided over by the President of the Tribunal.
(3) The powers of the Tribunal shall be exercisable by Benches consisting of two Members out of whom one shall be a Judicial Member and the other shall be a Technical Member
Rule 2(k) of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 provides that ‘member’ means a Member of the Tribunal and includes the President and a Vice-President.
Necessary amendments need to be carried out in the Income-tax Act to provide that a member of the ITAT includes the President, as appointed by the Central Government.
A thought for debate
Appointment of Vice-Presidents of the Income Tax Appellate Tribunal
Federation has made a number of representations to the Government from time-to-time for appointment of Vice-Presidents of the ITAT. In the PIL filed by Mr. Akshy Pundir, the Hon’ble Apex Court has taken cognizance and we hope the Government will appoint the Vice-Presidents at the earliest. It is the desire of the Tax Bar that the Government if the Vice Presidents are appointed and no vacancy be allowed to sustain for long periods.
The Tax Bar Association once again makes an appeal to the Honourable Law Minister to expedite the process of appointment of Vice-Presidents, since:
(a) It will help better administration of the institution which in turn will help speedy disposal of matters before the Tribunal.
(b) The last appointment of a member as a Vice-President was in the year 2009 leaving posts vacant till date and leaving the administrative work of the Tribunal handicapped.
(c) Few of the Honourable senior members of the ITAT who have served the institution for more than 18 years will have the honour of retiring as Vice-Presidents, which will boost the morale of all the members of ITAT.
(d) When all the 10 Vice-Presidents posts are filled, then all of them would be eligible candidates who could be considered for being appointed as the President of ITAT.
We hope, in the interest of the institution, the appointment of the Vice-Presidents will be done expeditiously.
Dr. K. Shivaram