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TMI Blog2014 (6) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause this issue is not arising out of the orders of the lower authorities, in my view is preposterous. When the Tribunal cannot adjudicate whether an ex-Member of the Tribunal can appear before it as an Authorized Representative or not, the natural consequence of the view is that the Tribunal cannot debar an ex-Member of the Tribunal from appearing as an Authorized Representative - Shri Deepak R. Shah, advocate and ex-Member of the Income Tax Appellate Tribunal, cannot be debarred by the Tribunal from practising before the Tribunal Benches - Decided in favour of appellant. - ITA No. 2170/Ahd/2005 - - - Dated:- 23-5-2014 - G. C. Gupta, Mukul Kumar Shrawat, JM And N. S. Saini, AM,JJ. For the Petitioner : Mrs. Mona Bhatt, Standing Counsel with Mr. D. S. Kalyan, CIT-DR For the Respondent : Shri Deepak R. Shah, ex-member ITAT ORDER Per: Mukul Kumar Shrawat: At the outset, it is necessary to mention that this Special Bench is hearing this case in view of the directions of the Hon'ble Jurisdictional High Court given in an Appeal titled as Deepak R. Shah (petitioner) vs. Income Tax Appellate Tribunal (respondent) in Special Civil Application No.15308 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble President, I.T.A.T. The question referred to us is reproduced below: Whether Shri Deepak R. Shah, advocate and ex-Accountant Member of the Income Tax Appellate Tribunal, is debarred from practicing before the Income Tax Appellate Tribunal in view of the insertion of Rule 13 E in the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963? 2. On the date of hearing, Sri Deepak Shah, Ex-member Income Tax Appellate Tribunal appeared in person. In the beginning of the hearing itself, the Bench has placed a question that whether it is competent for this bench to decide the issue as referred in the light of a judgment passed by Hon'ble Allahabad High Court/Lucknow Bench in the case of Dinesh Chandra Agrawal Vs. Union of India (Service Bench No.62 of 2012) dated 19.01.12, because the Hon'ble Court has made an observation that prima facie the interpretation of Rule 13E is, quote beyond its pale of competence as it has the jurisdiction to decide only the matters relating to tax appeals as contained in the Income Tax Act vide Section 253 and 254 thereof unquote. 2.1 The reply of Mr. Shah is that those words were nothing but an obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, Department of Legal Affairs. He was appointed for the post of an Accounted Member in the Income Tax Appellate Tribunal which belonged to General Central Service Group-A . At that time of appointment there was neither such restriction imposed nor informed to him. Through this letter of appointment, it was mentioned that, quote I am to request that in case you are willing to accept the offer of appointment as Accountant Member in the Income Tax Appellate Tribunal on the terms and condition mentioned above, your acceptance may be sent to this Ministry immediately and in any case by 10th October, 2001 at the latest. On receipt of your acceptance further instructions in regard to your posting etc. will be issued. Unquote. Therefore the argument of Mr. Shah is that had there been a restriction on lawpractice after retirement before the Tribunal then he would not have joined the service. Now through this amendment/insertion in Rule 13E the Ministry is trying to change the said offer retrospectively which is ultra vires, as well as, against the natural justice. 2.5 His next plank of argument was that the conditions of Rule 13E are applicable to the members who have retired from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT of those Members who have resigned and not retired in terms of Rule 13E I agree with this. 14. In the light of the aforesaid, I shall, answer the questions raised as under: Q.(i) Whether in the light of Rule 13E of the ITAT Members (Recruitment and Conditions of Service) Rules, 1963, the decision taken in the case of Concept Creations by the ITAT can withstand the judicial scrutiny in the light of law laid down by the Supreme Court in the case of N K Bajpai? Ans. Yes. The decision of the ITAT in Concept Creations case dealt with Rule 13E. The judgment of the Supreme Court in N K Bajpai's case deals with Section 129(6) of the Customs Act. This does not displace the earlier decision of the ITAT Q-(ii) Whether a person who resigned as Member of ITAT can practice before various Benches of the ITAT in view of the provisions contained in Rule 13E of ITAT Rules? Ans. Yes . 2.7 Mr. Shah has also referred the final direction given in the said letter by the Respected President of the Tribunal to the Tribunal Benches, reads as under : In the light of the above opinion obtained by the Ministry, now it is time for us to put an end to all the disputes relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re classified under Rule-8 of General Central Civil Services Class-I (Group-A); hence, an appeal lies with Central Administrative Tribunal. She has further pleaded that as per Section 253(1) and (2), an appeal is to be filed before the Tribunal against an order of the Lower Tax Authorities. The issue, presently under process of hearing, does not arise from any of the order of Income Tax Authority. 3.1 Ld. Standing Counsel has strongly challenged the maintainability of the above issue before this Special Bench and pleaded that the reference being not within the provisions of I.T.Act hence this Bench has no jurisdiction to decide it. She has also mentioned that the Tribunal being a creation of I.T.Act consequently has to operate and function in accordance to the provisions of the Act. This Bench can not decide an unconnected matter. This Bench has no power to decide an issue which is related to the vires of a Rule, pertaining to the service condition, framed by the Ministry of Law. Therefore, on the above stated grounds, this Hon'ble Tribunal, with utmost respect, has no jurisdiction to decide the present issue, she has pleaded. Ld counsel has also mentioned that on the sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 309 of the Constitution of India. Therefore the contention of Mr. Shah that under Art. 19(l)(g), he has right to practice, is to be read with the reasonable restriction imposed under Art 19(6) of the Constitution of India. 3.3 During his rejoinder Mr. Shah was asked a question by the Bench that whether it is within our jurisdiction to decide the legality as also the vires of a Service Rules and in his fairness he has given the answer in negative. 4. We have heard both the sides at length. From the records of the case, we have noted that learned Sri Deepak R. Shah was appointed as Accountant Member of the Income Tax Appellate Tribunal on 29th of November, 2001. He was confirmed on 29.11.2003. Later on, he has resigned as a Member of the Tribunal on 01.04.2010. At this juncture, it is worth to mention that Rule 13-E in (Recruitment and Conditions of Services) Rules, 1963 was inserted vide a notification dated 3rd of June, 2009, already reproduced supra. 5. At the outset, it is worth to mention that whether this Special Bench is entitled to decide the applicability of the provisions of Rule 13E of Members (Recruitment and Conditions of Service) Rules, 1963. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal benches to hear service related issues, including Special Bench, now stood reversed. Moreover, as on date, there is no other decision of any other Hon'ble High Court before us. The Tribunal Benches as also the Special Bench are subordinate to the High Courts. In the hierarchical judicial system an accepted rule to follow a precedent is that, quote the better wisdom of the Court below has to yield to higher wisdom of the Court above. Once an authority higher than the Tribunal has expressed an opinion on some issue, then the Tribunal is no longer at liberty to rely upon its earlier decision, may be a decision of the Special Bench unquote. This is a settled rule hence even a non-jurisdictional High Court order do not alter the position and therefore to be followed, if not dissented. Hence, the Tribunal being a subordinate Court, is expected to follow in letter and spirit an order of the Hon'ble High Court, unless and until either reversed by the Hon'ble Apex Court or by an order of the Jurisdictional High Court taking a contradictory view. Hence, the decision of the Special Bench pronounced in the case of Concept Creation (supra) is no more a good law on this is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal is classified under Rule 8 General Central Civil Services Class-I (Group-A Member), hence Central Administrative Tribunal may be the proper forum to decide the applicability of the provisions of Rule 13E of the notification. We find force in this arguments of learned Standing Counsel; hence, put this controversy at rest that the grievance being not emerging from an order of Tax Authorities as prescribed under Section 253 of IT Act (order appealable before the Appellate Tribunal), therefore this Tribunal is not competent to decide this issue which is related to the service conditions of the Members. 6. It is worth mentioning that both the sides, Ld. Mr. Shah as also Ms. Bhatt have expressed with full sense of responsibility that the question referred to this Special Bench being bonded with the legality of the Service Condition Rules hence out of the jurisdiction of the Tribunal, therefore by giving due weight to their acceptance of this legal position we hereby hold that the issue in hand do not fall within our competence of jurisdiction. Needless to repeat again, this view is fortified by the binding decision of Hon'ble Allahabad High Court. 7. An another arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT, Range Panipat (2009) reported in 120 ITD 19 (Del.)(SB) has held that those Members who retire after 03.06.2009 are not eligible to represent before the Tribunal. 2.1.2 Thereafter, a Division Bench of the Tribunal referred the matter to the Hon'ble President of the Tribunal for constitution of a larger Bench and suggested the following questions to be referred to the Special Bench: (1) Whether the Members of the Tribunal are competent to decide an issue in whose outcome they would be directly or indirectly interested? (2) Whether the Tribunal under section 253 and 254 can interpret a rule which is not framed under section 295 or ITAT Rules, 1963? (3) Whether any condition of eligibility or ineligibility of Authorized Representative other than those prescribed under section 288 can operate to allow or disallow a person to represent before the ITAT? (4) What is the status of ITAT Members (Recruitment Conditions of Service) Rules, 1963 and amendment made, therein vis- -vis Income-tax Act. Whether subordinate legislation in the form of rule 13E of Recruitment Conditions of Service Rules supersede the provisions of the Act and wherever provisions of the I.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... countant Member of the Income Tax Appellate Tribunal, is debarred from practicing before the Income Tax Appellate Tribunal in view of the insertion of Rule 13E in the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963? The Special Bench accordingly heard and completed the hearing on 20.1.2012, however thereafter the decision is not pronounced. Shri Syed in addition to it, submits that there are intervening circumstances which are also required to be borne-in-mind in form of resolution/amendment of the Bar Council touching upon this aspect. The petitioner in person requested the Court that let there be a direction to respondent nos. 1 2 to constitute the Bench as now one member who had earlier heard the matter had retired and decide the reference afresh within a stipulated period of three months, to which Shri Syed did not have any objection. Accordingly, without going into merits of the matter, at the request of learned advocate for the petitioner and petitioner himself, this Court is inclined to dispose of the matter with a direction to respondent no 1 2 to re- constitute the Special Bench for deciding the Reference aforesaid within a per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to place on record the submission of Shri Deepak R. Shah which was to the effect that a rule which is in the nature of subordinate legislature cannot override an Act of Parliament unless the Act of Parliament specifically provides so. In the instant case, section 288 of the Income Tax Act, 1961 which was passed by the Parliament nowhere provides that the provisions of that section shall be subject to any rule made by any authority. Therefore, in my considered view, Rule 13E of Income Tax Appellate Tribunal (Recruitment and Conditions of Service) Rules, 1963 cannot override the provisions of section 288 of the Act. If a person violates a rule which has been made under Income Tax Appellate Tribunal (Recruitment and Conditions of Service) Rules, 1963 , consequences of such violation prescribed by the law shall follow but the same cannot be held as overriding the provisions of an Act passed by the Parliament. 2.1.9 Further, it may be appropriate to also observe that though the power of the Tribunal u/s. 253 is to adjudicate the issues arising out of orders passed by the lower authorities as prescribed in the section and pass such orders thereon as it deems fit, but at the same ..... 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