ITAT President has no authority to record the Annual Confidential Reports (ACRs) of the Members – HC

Uttam Bir Singh Bedi vs. UOI (Madras High Court) - The ITAT is a judicial body and under the provisions of Sections 252 and 255 of the Income-tax Act, statutory powers are conferred on the President, including delegation of powers to the Senior Vice President or the Vice President. The President exercises administrative control over the Benches. But, no provision of the Income-tax Act or for that matter the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963 confer any power on the President to write the ACRs of the Members. When a question has arisen as to whether the President of the Customs, Excise and Service Tax Appellate Tribunal can write the ACRs of the Members, in REVENUE SECRETARY vs. SYED LIAQUATH PEERAN [2007 (208) ELT 331 (Madras)], a Division Bench of this Court, speaking through one of us (Justice Elipe Dharma Rao) has held that the ‘President not competent authority and having no power to write ACRs of Members.’ Pursuant thereto, it is seen from the proceedings of the Government of India, Ministry of Finance, Department of Revenue in R-2001 1-32/2010- ADIC-CESTAT, dated 28.10.2010, that the President, CESTAT, who used to write ACRs of its Members till the above said order of this High Court, dated 1.12.2006, is not writing ACRs. of its Members. We have also been informed by the learned counsel appearing on either side that though an appeal has been preferred before the Honourable Apex Court as against the above said order of this Court, (but, no SLP number has been furnished by either of the parties), no stay order has been passed by the Honourable Apex Court. Therefore, following the above order of this Court, we hold 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.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 30.11.2011

Writ Petition No.77 15 of 2010 and M.P.No.3 of 2010

Uttam Bir Singh Bedi Vs. Union of India & 8 Others

Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorarified Mandamus, calling for the records relating to the order of the 5th respondent in O.A.No.1001 of 2009, dated 12.3.2010, quash the same and consequently allow the said O.A., as prayed for, in terms of various prayers contained in the said O.A.

O R D E R

ELIPE DHARMA RAO, J.

The petitioner, a Judicial Member of the Income-tax Appellate Tribunal, Chennai, is challenging the appointment of the fourth respondent/Mr.P.Mohanarajan as Vice President of the Income-tax Appellate Tribunal (ITAT in short) in these writ proceedings.

2. The petitioner would contend that the high level Selection Committee has been misguided by the Annual Confidential Reports (ACRs in short) of all the eligible candidates placed before it. According to the petitioner, the third respondent/President of the ITAT has no right or authority to write Annual Confidential Reports of the Members and the first respondent cannot act like a reviewing authority. The petitioner, without prejudice to the above contention, would further contend that the ACRs were not liable to be taken into account, unless they had been communicated to the concerned officers, their representations obtained and considered by the competent authority, in terms of the judgment of the Honourable Apex Court in Dev Dutt vs. Union of India (AIR 2008 SC 2513). According to the petitioner, the fourth respondent is junior to him and only based on the incorrect and incomplete information furnished by the official respondents, in the sense the damaging observations made by the Honourable Apex Court against the fourth respondent in Rajiv Ranjan Singh vs. Union of India [W.P.(Crl.)No.197-198 of 2004, dated 21.8.2006 reported in Current Tax Reports (SC) 53/2006 156 Taxman 512 (SC)] were not placed before the Selection Committee, the Selection Committee proceeded to make its recommendations and the first respondent proceeded to appoint the fourth respondent as Vice President, in supercession of the petitioner.

3. It is also the contention of the petitioner that the post of Vice President ceased to be a promotion/selection post in view of the upgradation of the post of Members to the level of Vice President w.e.f. 1.1.2006 and consequential merger of the pay scales of both the posts. On such and other grounds, the petitioner has filed Original Application No.1001 of 2009 before the Central Administrative Tribunal, Chennai.

4. The official respondents have contended that the Selection Committee, headed by a sitting Judge of the Honourable Supreme Court, has taken into consideration various aspects and since merit alone is the criteria for selection, the Selection Committee has recommended the name of the fourth respondent and there is no reason whatsoever to cause interference into the findings arrived at by the Selection Committee.

5. The Central Administrative Tribunal, Chennai has accepted the contentions urged on the part of the official respondents and further taking into consideration the fact that the fourth respondent, after getting selected as Vice President, has attained superannuation on 6.11.2009, has dismissed the original application filed by the petitioner, resulting in him approaching this Court with this writ petition.

6. After hearing all the parties at length, two points that arise for consideration are:

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 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?

POINT No.1:

7. The Vice Presidents of ITAT are appointed from amongst the Members in terms of Rule 7A of the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963, which reads as follows:

“The Central Government may appoint from among the Members one or more persons as Vice-President or, as the case may be, Vice Presidents of the Tribunal to assist the President in the discharge of his functions.”

8. A Selection Committee has been constituted under Rule 7C, consisting of a sitting Supreme Court Judge, to be nominated by the Chief Justice of India, the President and the Secretary, Ministry of Law and Justice (Department of Legal Affairs) based on merit, shall recommend persons for appointment as President, Senior Vice-President and Vice-Presidents. Therefore, the criteria for selection is merit.

9. The contention of the petitioner is that consequent to the merger of both the posts of Members and Vice Presidents w.e.f. 1.1.2006, the post of Vice President ceased to be a promotional post to that of the Member. According to him, prior to 1.1.2006, the vice Presidents and the Members were placed in the pay scales of Rs.24050-26000 and Rs.22400-26000 respectively, however, w.e.f. 1.1.2006, both the posts of Vice President and Members are placed in the same scale of pay i.e. Rs.75500-80000 and hence, the process of selection of Vice Presidents, which was valid till 1.1.2006, was ceased to be valid from 1.1.2006 in view of the merger of both the pay scales and therefore, the Members cannot be subjected to selection process for placing them in the same scale of pay.

10. True, on and from 1.1.2006, the pay scales of both the Members and the Vice Presidents has been fixed as Rs.75500-80000. But, it can only be called as unification of the pay and not the merger of both the posts. Had it been a merger, the post of Member would not have been in existence on and after 1.1.2006. While on the part of the respondents 1 and 2 it has been strenuously argued that though the pay of both the posts is one and the same, the pay band differs, nothing has been placed before us by the petitioner to pooh-pooh this stand of the respondents 1 and 2.11. The ITAT is headed by a President, followed, in hierarchy, by one Senior Vice President, Nine Vice Presidents and Judicial and Accountant Members (totalling 126). The ITAT is constituted at 27 cities of the country as Benches. The provisions of Sections 252 and 255 of the Income-tax Act confer a statutory power upon the President to constitute Benches. In INCOME TAX APPELLATE TRIBUNAL vs. A.KALYANASUNDARAM [(2006) 1 LW 626], a Division Bench of this Court has held that the position of President of the ITAT is like the position of the Chief Justice of the High Court, as it is the Chief Justice who decides which Judge is to sit in which Bench and at which place (in High Courts where there are Benches in two or more cities). Therefore, there cannot be any doubt that the President of ITAT exercises a prerogative right of constituting the Benches and transferring the members and others from one Bench to other.

POINT No.2:

16. The ITAT is a judicial body and under the provisions of Sections 252 and 255 of the Income-tax Act, statutory powers are conferred on the President, including delegation of powers to the Senior Vice President or the Vice President. The President exercises administrative control over the Benches. But, no provision of the Income-tax Act or for that matter the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963 confer any power on the President to write the ACRs of the Members. When a question has arisen as to whether the President of the Customs, Excise and Service Tax Appellate Tribunal can write the ACRs of the Members, in REVENUE SECRETARY vs. SYED LIAQUATH PEERAN [2007 (208) ELT 331 (Madras)], a Division Bench of this Court, speaking through one of us (Justice Elipe Dharma Rao) has held that the ‘President not competent authority and having no power to write ACRs of Members.’ Pursuant thereto, it is seen from the proceedings of the Government of India, Ministry of Finance, Department of Revenue in R-2001 1-32/2010- ADIC-CESTAT, dated 28.10.2010, that the President, CESTAT, who used to write ACRs of its Members till the above said order of this High Court, dated 1.12.2006, is not writing ACRs. of its Members. We have also been informed by the learned counsel appearing on either side that though an appeal has been preferred before the Honourable Apex Court as against the above said order of this Court, (but, no SLP number has been furnished by either of the parties), no stay order has been passed by the Honourable Apex Court.

Conduct of the petitioner: