[Opinion] Appointment of Vice Presidents of the Income Tax Appellate Tribunal – Confusion Galore

Ajay Wadhwa & Aayushi Gupta – [2022] 143 taxmann.com 416 (Article)

Income Tax Appellate Tribunal (“ITAT”) and Central Excise and Service Tax Appellate Tribunal (“CESTAT”) are distinct from other Tribunals in the Country in as much as, these are the forums of second appeal whereas all other Tribunals in the Country are forums with original jurisdiction. Appeals before the ITAT are filed against orders of Commissioner (Appeals) who are the first level appellate authorities with 20 plus years of experience in the Department. Very complex questions of fact and law often arise for adjudication before the ITAT which requires the Members to be experts in the knowledge of Income Tax and other allied laws.

It is well known that Income Tax Act, with its myriad provisos and explanations undergoes changes every year whereas all other Acts are more or less static. Even Chartered Accountants & Lawyers who have studied tax twice in their curriculum; have undergone training in Income Tax and have spent many years practicing tax, find it difficult to grapple with complicated tax related issues. It is commonly discussed that even Judges who have no or little experience of tax hesitant to sit on tax benches.

2. The ITAT came into existence in January, 1941 and till 2021 it provided a career post for Members who, once selected would retire at the age of 62. However in one stroke, with the advent of the Tribunals Reforms Act, 2021, the entire edifice of the Institution has changed. Henceforth, selection of Members is for 4 years. However, Members who were selected prior to 2021 would retire at the age of 62.

3. Vice Presidents in the past have been selected out of the senior most sitting Members of the ITAT and seniority has been reckoned from the date of joining by the Members. This has invariably lead to the most experienced Members getting selected and by the virtue of their long experience in the ITAT they have been able to head and lead the administrative functions of the region, efficiently and effectively and their orders have been reflective of high erudition, comprehensibility, maturity and balance.

4. Currently, out of the total strength of 80 Members in the ITAT, there are 67 Members who shall serve till the age of 62 while 13 Members who have been recently selected under the new rules i.e. Tribunal (Condition of Service) Rules, 2021 (“the Rules”) have been appointed for 4 years.

5. A vacancy circular No. F. No. A-12023/1/2022-Admin -III, dated 19.09.2022 has been notified by the Law Ministry wherein, four posts of Vice Presidents have been advertised and the qualification for appointment as per the Rules, simply, is that the Vice President who is to be selected, “has been a Member of the Tribunal”. This is being interpreted to mean that even Members who have retired are eligible to become Vice President of the ITAT directly. This also makes those Members who have recently joined and are on a fixed term of 4 years eligible to become Vice Presidents of the ITAT. Further, even Members of other Tribunals like CESTAT are also claiming to be eligible. The current and former Vice Presidents of the ITAT may also consider themselves eligible on the ground that they have been Members.

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