Former ITAT Members – Practice Before ITAT?
THE Government had taken a decision that former Members of the CESTAT and ITAT should not be allowed to practise before the respective Tribunals. And the CBEC and CBDT took different routes to achieve this goal.
The CBEC got the Parliament to amend Section 129 of the Customs Act to insert a new sub-section that
(6) On ceasing to hold office, the President, Vice-President or other Member shall not be entitled to appear, act or plead before the Appellate Tribunal .
This was challenged in the High Court and the Delhi High Court in the PC Jain's case (2009-TIOL-185-HC-DEL-CESTAT) dismissed the writ petitions and held that the former Members had no right to practice before the CESTAT.
While this was so, the CBDT was sleeping. In the PC Jain's case, the Court noted that that the Government has in principle agreed that steps should be initiated to bring about a suitable amendment so that similar bar could be incorporated in the Income Tax Act, in respect of, members of the Income Tax Appellate Tribunal.
And it came - by way of a notification amending the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963, whereby it was stipulated that:
The President, the Senior Vice-President, the Vice-President and the Members of the Tribunal shall not practice before the Tribunal after retirement from the service of the Tribunal.
Now see the difference – In CESTAT, it is On ceasing to hold office while in ITAT, it is on retirement.
And the amendment in CESTAT is by amending the Act while in ITAT it is by amending the Members Recruitment Rules.
Why two Boards under the Revenue Department try to achieve the same goal by two different means? It proves without doubt that there is absolutely no co-ordination between the two Boards – but what is the Revenue Secretary and the Law Ministry doing?
When CBEC suggested an amendment in the Act there should have been a natural question in the minds of the Revenue Secretary and the Legislature Secretary – What about Income Tax? But apparently this did not appear important to any of the stalwarts running the country.
Anyway the matter reached the Special Bench of the ITAT and there it was argued that Parliament consciously wanted the difference in ITAT and CESTAT! This is what happens when Government has so many limbs and all of them start thinking on their own!
The ITAT Special Bench in a landmark order on 15.09.2009 decided that
Bar on practice before ITAT does not apply to Members who have retired prior to the date of publication of notification;
1. It applies to the Members who retired from the Tribunal on or after the date of the publication of this Notification.;
2. Once the Member retires after the date of Notification, it certainly applies. It does not matter when the Members were recruited. Even it applies to the Members who are recruited prior to the date of Notification. Crucial date must be the date of retirement. If it is after 3rd June, 2009, it applies;
3. the Members who retire on or after 3-6-2009, even if otherwise qualified to practice u/s 288 of the Act, would still be debarred to appear and argue before the Tribunal, in the light of Rule 13E of the ITAT Members (Recruitment and Conditions of Service ) Rules, 1963;
4. Persons who have resigned from service prior to the date of Notification, without any retirement benefits would not be covered by this Notification because it applies to those persons who have retired after the date of Notification;
5. Does not apply to members who are appointed on a temporary basis and resign from service without being confirmed during probationary period.
So all those former Members who were practising can happily continue to do so. Only those who retired after 03.06.2009 are barred. Isn't this discrimination? And is ITAT competent to decide the issue? This is certainly not going to be the end of the matter. We will see interesting court battles.
Click here for the ITAT Order.
Also see:
1. PC Jain's case ()
2. 22.06.2009
3. Can retired ITAT Members practise in the ITAT – Special Bench to hear. - TIOL-DDT 1159 22.07.2009