Prospective service restrictions under Rule 13E apply to post-notification retirees, not to members who had already retired or resigned in probation.

Rule 13E was construed as a prospective condition-of-service restriction under Article 309: it does not apply to Members who had already retired before the notification, but it does apply to Members in service on the notification date and retiring thereafter, including those recruited earlier. A post-notification retiree remains barred from appearing before the Tribunal even if otherwise qualified under section 288 of the Income-tax Act, because the later service restriction prevails for that category. By contrast, resignation during temporary probation was treated as legally distinct from retirement; persons who resigned before confirmation were not covered by Rule 13E and could not be subjected to that post-service disqualification.

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Issues: (i) Whether Rule 13E of the Income-tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963 applies to Members who retired before the date of publication of the notification, and to Members who retired on or after that date, including those recruited before but retiring after it; (ii) whether the prohibition in Rule 13E applies to retired Members who are otherwise qualified under section 288 of the Income-tax Act, 1961; (iii) whether persons who had resigned from temporary service during probation, without confirmation and without retirement benefits, are covered by Rule 13E.

Issue (i): Whether Rule 13E of the Income-tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963 applies to Members who retired before the date of publication of the notification, and to Members who retired on or after that date, including those recruited before but retiring after it.

Analysis: The Tribunal construed Rule 13E as a condition-of-service provision operating prospectively from the date of publication. It held that such a rule cannot be applied to persons who had already retired before that date, because their service relationship had already ended and accrued rights could not be disturbed. At the same time, the rule was held applicable to persons who were in service on the date of publication and retired thereafter, irrespective of whether they had been recruited earlier. The crucial date was held to be the date of retirement, not the date of recruitment.

Conclusion: The rule does not apply to Members who retired before the notification, but it does apply to Members who retired on or after the notification date, including those recruited earlier.

Issue (ii): Whether the prohibition in Rule 13E applies to retired Members who are otherwise qualified under section 288 of the Income-tax Act, 1961.

Analysis: The Tribunal held that the power under Article 309 extends to framing conditions of service for persons in service, and that the impugned rule, though not a legislative amendment to the Income-tax Act itself, validly imposes a service-based disqualification on those who were serving when the rule came into force and later retired. It further held that the qualification under section 288 does not override the later service restriction created by Rule 13E for such post-notification retirees.

Conclusion: Yes. A Member who retires on or after the notification date remains barred from appearing before the Tribunal under Rule 13E, even if otherwise qualified under section 288.

Issue (iii): Whether persons who had resigned from temporary service during probation, without confirmation and without retirement benefits, are covered by Rule 13E.

Analysis: The Tribunal distinguished resignation from retirement and held that persons appointed to temporary posts on probation who resigned before confirmation had not retired from service within the meaning of Rule 13E. Their service stood forfeited on resignation, and the rule could not be applied to them retrospectively to create a disqualification after their cessation from service. The same reasoning was applied to the individual cases placed before it, including those who resigned during probation.

Conclusion: No. Persons who resigned from temporary probationary service without confirmation are not covered by Rule 13E.

Final Conclusion: The reference was answered in part in favour of the interveners on the scope of Rule 13E, and the appeal records were sent back to the regular Division Bench for disposal in accordance with law after hearing both sides.

Ratio Decidendi: A rule framed as a condition of service under Article 309 operates prospectively and can bind only those still in service when it comes into force; it cannot be applied to persons whose service has already ended by retirement before the notification, while resignation during probation is legally distinct from retirement and does not attract a post-service disqualification meant for retirees.

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