TaxTMI 
TaxTMI 
2014 (6) TMI 576
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....ciding the following question:- 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 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-inmind 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-c....
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....or the adjudication by this Special Bench. 2.2 Mr. Deepak Shah has referred Section 288 of the Act for the legal proposition that if he is being stopped appearing before the Income Tax Appellate Tribunal then his rights are infringed as laid down u/s.288 of the Act. The Tribunal being a creation of the Income Tax Act has to decide all such issues raised under any of the provisions of the Act, including Sec. 288 of the Act. If any one of the provision of the Income Tax is invoked then the aggrieved party has right to contest before the Tribunal. He has then explained that how he is entitled to appear before the Tribunal. He has explained that u/s.288(2)(iii) and (iv) the definition of "Authorized Representative" is incorporated; hence, he is entitled to appear before the Tribunal. 2.3 Next plank of his argument is that a sub-ordinate legislation cannot overrule and override a statutory enactment. He has explained that vide a notification dated 3rd June, 2009 issued by Ministry of Law & Justice, Department of Legal Affairs, a Rule 13E was introduced which says, quote "the President, the Senior Vice President, the Vice President and the Member of the Tribunal shall not practice befo....
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....any pension, gratuity or terminal benefits. He has said that it was nothing but a double jeopardy. On one hand due to the resignation he has not been allowed certain benefits and on the other hand he has also not been allowed to practice before the Tribunal. He has finally pleaded that once a Special Bench in the case of Concept Creations vs. Adl CIT (2009) 120 ITD 19 (Del.)(SB) had been established in the past and already taken up an identical reference, that too was pertaining to the applicability of Rule 13E, then in the like manner this Special Bench can also decide the question referred by the Hon'ble President pertaining to applicability of Rule 13E for an Ex-Accountant Member who has resigned from the service. According to him, only a portion of the said order (Concept Creation) was stayed but no other restriction has been imposed by the Hon'ble Allahabad High Court through the afore-cited order dated 19.01.2012, therefore rest of the ratio laid down is now required to be followed. 2.6 An another plank of argument of Mr. Deepak Shah before us is that as per the said notification vide Rule 14 of "Interpretation" it is provided that, "if any question arises relating t....
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.... Law & Justice in F.No. A-60011/60/2012-Admn. lll(LA) dated 19th April 2012 is to be treated as final in the matter and should be considered as having been issued by the Ministry under Rule 14 and Rule 15 of the Income Tax Tribunal Members (Recruitment and Conditions of Service) Rules, 1963. The matter should rest there. This is brought to your notice so that you may appraise the Members in your Zone, to take a uniform view in the light of the Special Bench decision in the case of Concept Creations, as clarified by the Ministry." 2.8 He has thus vehemently argued that in a situation when the Ministry of Law has appointed Attorney General and on the advice of the said Attorney General the President of the Tribunal has given direction to allow the appearance then such direction should be treated as the decision of the Central Government in respect of interpretation of Rule 13E of the said impugned notification. He has thus contested that the bar imposed upon him is unjustifiable. He must be allowed to appear before the Tribunal, strongly advocated. 3. From the side of the Revenue, learned Standing Counsel, Mrs. Mona Bhatt, assisted by Ld. DR Mr. D.S.Kalyan CIT have appeared. From ....
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....E is prospective, and therefore, it will be applicable to those who have retired or resigned after 3.6.2009. The general Rule of statutory interpretation states that Rule 13E which came into force with effect from 03.06.2009, being the service condition is applicable to those who are in service as on 03.06.2009. As Mr.Shah was in service on 03.06.2009, Rule 13E is applicable to him. Further, even for applicability of the Rule, the object, intent and purpose of the insertion are to be seen. A purposive interpretation is to be given to the Rule. Apparently, the object is to disallow ex-member to practice otherwise following events / eventuality may happen for eg. (1) Bias against their own pears.; (2) Resignation versus retirement will create absurd proposition, resulting into that one class of person is allowed to appear and not the other. (3) The proposition canvassed will induce members to resign before few days of their retirement. For giving purposive interpretation in the present case, retirement and resignation has same meaning. The Department relies upon the case reported as CIT vs D.P. Malhotra 229 ITR 394 (Bombay). 3.2 With regard to the submission of Mr. Shah about ap....
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....ench, in the case of Dinesh Chandra Agarwal Vs. Union of India (Service Bench No.62 of 2012) vide an order dated 19th of January, 2012 has held that the judgment rendered in the case of Concept Creations (supra) was beyond its pale of tax appeals as contained in the Income Tax Act, vide Sections 253 and 254 thereof. The relevant portion is extracted below: "As per Rule 13E of the Rules notified on June 3, 2009 whereby the Income Tax Appellate Tribunal Members (Recruitment and Conditions' of Service) Rules, 1963 has been amended, a ban has been imposed on practice by the retired members before the Income 'Tax Appellate Tribunal Rule 13E as aforesaid on reproduction reads as : "13E. The President, the Senior Vice-President, the Vice- President and the Members of the Tribunal shall not practice before the tribunal after retirement from the service of the Tribunal." Though, prima facie, the Rule appears to be a correct notification supposedly issued in public interest in line with the rules and practice clamping ban on the legal practice by the retired judges of High Court in the courts where they remain posted as permanent judge and the Tribunals and Courts subordinate to H....
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....ealable order before the Tribunal as prescribed u/s.253 is not required to be adjudicated upon by us in the present appeal. We are also not entertaining one of the arguments of learned Mr Shah that in terms of Section 254 of IT Act the Appellate Tribunal is entitled to "pass such orders thereon as it thinks fit". 5.3 Resultantly our conscientious decision is that in the light of the decision of the High Court it is beyond our jurisdiction to decide the issue on merits and that part of the Concept Creation (supra) now stood overruled by the Hon'ble Allahbad High Court. The vires of Rule 13E, whether it is ultra-vires or intra-vires, is a subject not falling within our jurisdiction. 5.4 Before us learned Standing Counsel, Mrs. Bhatt has referred Article 309 of the Constitution of India which prescribes the Recruitment and Conditions of Service of persons serving the Union or State. She has said that a particular legislature may regulate the Recruitment and Conditions of Service of persons appointed to public services and posts in connection with the affairs of the Union or of any State. She has also pointed out that as per one of the proviso, it is prescribed that it shall be c....
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....overnment. 8. Before we part with the issue, it is worth to mention that the Hon'ble Allahabad High Court has fixed the date of hearing to decide the vires of Rule 13E and for that purpose issued notice to the learned Attorney General of India; hence, at present it is not legally justifiable to take up the merits of the issue. We hereby hold that the question referred to us is beyond our jurisdiction. 9. The question referred to us is alieni juris hence forbidden to adjudicate. Per Shri N. S. Saini, Accountant Member: I have gone through the order prepared by my Ld. brothers on behalf of Special Bench. In respect of the question referred to Special Bench which was constituted by the Hon'ble President of the Tribunal in pursuance of the directions of the Hon'ble Gujarat High Court, I find that the question referred in my view is not answered in the proposed order. I discussed my view on the issue with the Ld. brothers who proposed the order. Having failed to convince the Ld. brothers with my view and having failed to convince myself with the proposed order, I propose to write my separate order which is as under: 2.1 The facts leading to the constitution of this Spec....
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.... with those who retire with all the benefits of service and, therefore, rule 13E would be applicable with same rigours who ceased to hold office after 3.6.2009? (3) Whether the said notification inserted in rule 13E is amendment in conditions of service, and if yes, whether alteration in service conditions can be made against the detriment of existing Members who are employed with different service conditions?" 2.1.3 Thus, it clearly transpires that after considering the above referred propositions, the Hon'ble President of the Tribunal constituted a Special Bench consisting of 3 Members on 27.05.2011 and referred the following question for its adjudication based on it. "Whether Shri Deepak R. Shah, advocate and ex- Accountant Member of the Income Tax Appellate Tribunal, is debarred from practising before the Income Tax Appellate Tribunal in view of the insertion of Rule 13E in the Income Tax Appellate Tribunal (Recruitment and Conditions of Service) Rules, 1963?" 2.1.4 The Special Bench though heard the appeal on 20.01.2012 but could not pronounce its decision and in the meanwhile, a Member of the Special Bench retired. Thereafter, a writ was filed before the Hon'ble G....
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....ion of the Hon'ble Gujarat High Court to reconstitute the Special Bench for deciding the question referred to the Special Bench earlier, the Hon'ble President of the Tribunal reconstituted the Special Bench with the direction to decide the following question: "Whether Shri Deepak R. Shah, advocate and ex-Accountant Member of the Income Tax Appellate Tribunal, is debarred from practising before the Income Tax Appellate Tribunal in view of the insertion of Rule 13E in the Income Tax Appellate Tribunal (Recruitment and Conditions of Service) Rules, 1963?" 2.1.6 As per the view expressed by my Ld. brothers that the Tribunal has no inherent jurisdiction to decide the question as to whether an ex-Member of the Tribunal can appear and practice before the Income Tax Appellate Tribunal Benches. In my considered view, this special Bench has jurisdiction to decide the question referred to it inasmuch as the same was referred on the directions of the Hon'ble Jurisdictional High Court and therefore, we are duty bound to follow the directions given by the Hon'ble Hon'ble Jurisdictional High Court and decide the question referred to it. 2.1.7 I like to observe that as the H....