A Tribute – 80 Glorious Years of the Income Tax Appellate Tribunal –
80 Landmark Judgements of Special Benches
Dr. K. Shivaram, Senior Advocate, Bombay High Court
January 25, 2021 was the 80th Foundation Day of the Income tax Appellate Tribunal (ITAT) (25-1-1941 to 25-1-2021), which is considered as the Mother Tribunal of our country. ITAT is one of the oldest Temples of Justice in our country. The older the temple, the greater is its sanctity and reverence. It is the strong foundation of this great institution which is made possible to retain the glory as one of the finest institutions of our country.
The year 2020 witnessed a global pandemic. However, under the able leadership of Hon’ble Mr. Justice P.P. Bhatt President with the support of Hon’ble Vice-Presidents and Hon’ble Members of the ITAT through virtual courts have disposed a greater number of matters than the appeals filed. There is an ongoing research is in the process how to take this forward. The Hon’ble Vice-Presidents of the ITAT have interacted with stake holders and representatives of the Tax Bars across the country on the issues relating to Virtual Court proceedings. Many valuables suggestions were provided for the consideration of the Hon’ble President.
In 80 years of ITAT, it has gained the confidence of both the taxpayers and the Revenue authorities alike by rendering impartial decisions in a transparent manner, no other Tribunal in India has won such well-deserved popularity and confidence of the public as the Income-tax Appellate Tribunal.
There is uniform praise in the manner in which the Tribunal functions.
As a Tribute to the ITAT, on the occasion of 80 years of the ITAT the Journal Committee of the AIFTP has published a special which will contain the gist of the 80 land mark judgements of the ITAT giving forward references to the cases. The special issue also contains a reference to Special Benches since 1967 till date.
Section 255 (3) of the Income-tax Act (Act) gives power to President to constitute special Bench. In ITAT v. DCIT (1996) 218 ITR 275 (SC) it was held that the function entrusted to the President under sub-sections (1) and 3 of Section 255 of the Act are administrative functions and the power to constitute Special Benches of the Tribunal is an administrative power. The President may also ‘suo motu’ constitute such a Special Bench if it is brought to his notice that any important point is pending for decision in a matter required to be decided by a larger Bench. The Apex Court also held that the High Court cannot sit in appeal over the administrative power of the President of the Tribunal unless such powers has been used in a mala fide manner. In Jagati Publication Ltd v. President ITAT (2015) 377 ITR 31 (Bom) (HC) the Court held that, the CBDT for seeking to constitute Special Bench for non -judicial reasons and on grounds of “political sensitivity”. The collection of tax and the adjudication must move unconcerned with political identity. It is also necessary to send a strong signal to all litigants, including the State, to make no attempts to influence a judicial body by non-judicial methods. Constitution of Special Bench on the recommendation of CBDT was strongly condemned by the Court. In CIT v. Janapriya Engineers Syndicate (2015) 371 ITR 439 (AP& T) (HC), held that until and unless the decision of the Special Bench is upset by a High Court, it binds smaller and Co-ordinate Benches of the Tribunal. When official publication of the Appellate Tribunal Income-tax Tribunal decisions (1982) 1 ITD 33 to 57 was started, a list of special Benches and decision there on was published. Appellate Tribunal has rendered more than 500 decisions of the Special Benches settling various important issues. More than 86 per cent of the orders of the Appellate Tribunal are affirmed by Apex Court and High Courts and some of the decisions of the Appellate Tribunal are accepted by the Revenue and assesses and no further appeals were filed. Some of the land mark judgments of the Special Benches are summarized in this special issue which will be very useful to the readers. Most of the Judgements of the Special Benches are affirmed by the High Courts and Supreme Court. Some of the Special Bench cases were argued before the Appellate Tribunal for weeks before the ITAT. Some of the Special Benches are of seven Members. Hon’ble members were able to deliver very qualitative judgements due to oral arguments, counter arguments, very pertinent questions by the Honorable members. If the amendment proposed by the Government to have faceless ITAT, how the Special Benches will function and how much confidence will the taxpayers have in the faceless hearing, time will only decide. We hope considering the various representations made by the stake holders, the Govt may reconsider the proposal on the faceless ITAT.
The Messages from the Hon’ble Mr. Justice. P. P. Bhatt, President of the ITAT and Hon’ble Vice-Presidents will be an inspiration to the readers to understand the judgements delivered by various special Benches of the Income-tax Appellate Tribunal.
Sincere effort made by the journal committee of the AIFTP as an editor Mr. K. Gopal, Chairman Mr. Mitesh Kotecha, Leadership of Mr. M. Srinivasa Rao National President, editorial board and the contributors deserved special appreciation. Special thanks to Advocate Ms. Neelam Jadhav for preparing subject wise and section wise index to this special issue.
We hope this publication will be useful to the tax professionals to understand the development of tax laws and acknowledge the contribution of the ITAT over the last 80 years.
Dr. K. Shivaram