2011 (11) TMI 101 - HC - Income Tax

Whether the post of Vice President is a promotional post to that of the Member of the ITAT or not. - Held That - the President can delegate his powers and functions, for the sake of administration, in respect of the Benches either on Senior Vice President or on Vice Presidents of the Benches. The delegation of powers of the President could only be to either a Senior Vice President or to the Vice Presidents, but not to the Members. Therefore, even though the pay of the Vice President and the Members has been unified, it cannot, in any way be called that the posts of Vice President and Member have been merged. We have no hesitation to hold that since the post of Vice President carries higher responsibilities, with higher pay band, it is definitely a promotional post from that of the Member Whether the President of the ITAT is having any authority or right to record the Annual Confidential Reports of the Members. If so, whether the first respondent/Government of India is having any right to review the ACRs of the Members. - Held That - the President of the ITAT has no power or authority to write the ACRs of the Members. Further, being a judicial body, the ITAT should have a judicial autonomy and therefore, the first respondent cannot act like a Reviewing Authority. Conduct of the petitioner (judicial member of ITAT) - held that - Nobody has raised his little finger against the petitioner about his honesty and integrity, but all the allegations are pinpointed towards his arrogant behaviour and ignoring the judicial conventions. - All these would force us to direct the petitioner to mend his ways and conduct himself in a dignified manner and follow the established judicial conventions, so as to maintain the decorum on and off the dais.

Issues Involved:
1. Whether the post of Vice President is a promotional post to that of the Member of the ITAT or not.
2. Whether the President of the ITAT has the authority to record the Annual Confidential Reports (ACRs) of the Members, and if so, whether the Government of India has the right to review the ACRs.

Issue-wise Detailed Analysis:

1. Whether the post of Vice President is a promotional post to that of the Member of the ITAT or not:

The petitioner, a Judicial Member of the Income-tax Appellate Tribunal (ITAT), challenged the appointment of the fourth respondent as Vice President of the ITAT. The petitioner argued that the post of Vice President ceased to be a promotional post due to the upgradation of the post of Members to the level of Vice President effective from 1.1.2006, which resulted in the merger of the pay scales of both posts. The petitioner contended that the selection process for Vice Presidents was invalid after this date.

However, the court found that while the pay scales of both Members and Vice Presidents were unified to Rs.75500-80000, this unification of pay did not equate to a merger of the posts. The court noted that the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963, under Rule 7A, allowed the Central Government to appoint Vice Presidents from among the Members. The Selection Committee, constituted under Rule 7C and headed by a sitting Supreme Court Judge, recommended appointments based on merit.

The court emphasized that the ITAT is headed by a President, followed by a hierarchy including one Senior Vice President and nine Vice Presidents, with Members totaling 126. The President has statutory powers to constitute Benches and delegate functions to Vice Presidents, highlighting the higher responsibilities of the Vice President role. The court concluded that the post of Vice President carries higher responsibilities and is therefore a promotional post from that of the Member.

2. Whether the President of the ITAT has the authority to record the Annual Confidential Reports (ACRs) of the Members, and if so, whether the Government of India has the right to review the ACRs:

The petitioner contended that the President of the ITAT had no authority to write the ACRs of Members and that the Government of India could not act as a Reviewing Authority. The court examined the provisions of Sections 252 and 255 of the Income-tax Act, which confer statutory powers on the President, including administrative control over the Benches. However, the court found no provision in the Income-tax Act or the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963, that conferred the power to write ACRs on the President.

The court referred to a previous judgment in Revenue Secretary vs. Syed Liaquath Peeran, where it was held that the President of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) was not competent to write ACRs of Members. Following this precedent, the court held that the President of the ITAT had no authority to write the ACRs of Members and that the first respondent (Government of India) could not act as a Reviewing Authority.

Conclusion:

The court found that the ACRs recorded by the President and reviewed by the first respondent had placed the petitioner at a disadvantage compared to other candidates. Additionally, significant observations made by the Supreme Court against the fourth respondent were not presented to the Selection Committee. Consequently, the court concluded that the Selection Committee did not have proper material to arrive at a just conclusion.

The court set aside the order of the Central Administrative Tribunal and allowed the writ petition. The court directed the Selection Committee to reconsider the petitioner's claim, excluding the ACRs illegally recorded by the President and reviewed by the first respondent, and to complete the exercise within two months. The court also expressed concerns about the petitioner's conduct and urged him to adhere to judicial conventions and maintain decorum.

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