2023 (3) TMI 621 - SCH - Income Tax

Admission to the posts of Members of the ITAT - rejection on the ground of non-filing of ITR for relevant assessment year - whether the applicant would be governed by the provisions contained in the Income Tax Act 1961? - HELD THAT - Rule 11 of the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules 1963 stipulated that the age of retirement of the Members of the ITAT would be 62 years. In terms of those provisions, the applicant would have been entitled to continue in service until the age of 62 years. The applicant had offered her candidature for appointment in pursuance of the circular of 2013. The selection process which was conducted in pursuance of the circular ended in the grant of letters of appointment to those who were found to be qualified and were selected. The applicant was deprived of the selection at that stage only on the ground that she had not filed her income tax return for the relevant assessment year. The applicant pursued her claim before the Calcutta High Court. In the judgment of the Calcutta High Court dated 28 June 2017, it was held that the candidature of the applicant shall not be rejected on the ground that her income tax return for Assessment Year 2010-2011 was not available, as reported by the Under Secretary to the Government of India in the Ministry of Finance, Department of Revenue. This judgment of the Calcutta High Court attained finality. Thus, the only ground which weighed in the rejection of her candidature was found to be untenable by the Division Bench of the Calcutta High Court. Though the appointment letter was issued to the applicant on 19 March 2018 (in pursuance of the letter of offer dated 24 October 2017), the appointment of the applicant was pursuant to the selection process which had been initiated with the circular of 17 April 2013 - clear position on the facts of this case is that the right of the applicant to appointment had been crystallized even before the 2017 Rules. Therefore, the appointment of the applicant would be governed by the position as it existed prior to the 2017 Rules. In other words, her tenure shall be extended until she attains the age of 62 years. Application disposed off.

Summary

Issues:
1. Interpretation of the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules 1963 regarding the retirement age of Members.
2. Validity of the applicant's appointment and tenure based on the selection process initiated in 2013.
3. Application of the judgments in Rojer Mathews vs South Indian Bank Limited and Madras Bar Association vs Union of India on the appointments made before 2017 Rules.
4. Determination of the governing provisions for the applicant's appointment.

Analysis:

1. The primary issue in this case involves interpreting Rule 11 of the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules 1963, which specifies the retirement age of Members as 62 years. The question is whether the applicant should be allowed to continue in service until the age of 62 based on this rule.

2. The applicant applied for a position in the Income Tax Appellate Tribunal in 2013. Despite being initially excluded from the panel of names for appointment, a subsequent judgment by the High Court of Calcutta directed the consideration of her candidature afresh. The applicant received a letter of appointment in 2018 following this judgment, and it was argued that her appointment should be governed by the position before the 2017 Rules came into effect.

3. The judgments in Rojer Mathews vs South Indian Bank Limited and Madras Bar Association vs Union of India are crucial in this context. These judgments directed that appointments should be made in accordance with the respective statutes before the enactment of the Finance Bill 2017. The applicant's representation and the interim orders by the Court further emphasized the need to consider appointments made before April 2021 under the parent statutes.

4. The final determination was made based on the applicant's entitlement to continue in service until the age of 62 as per the provisions existing before the 2017 Rules. The rejection of her candidature based on the absence of her income tax return for a specific assessment year was deemed untenable by the Calcutta High Court, and her appointment was considered to be part of the selection process initiated in 2013, predating the 2017 Rules.

5. Consequently, the Interlocutory Application was disposed of, affirming that the applicant's tenure should be extended until she reaches the age of 62 years based on the rules applicable before the 2017 Rules came into effect.