2004 Supreme(SC) 2

2004(1) Supreme 319
SUPREME COURT OF INDIA
V.N. Khare, CJI., S.B. Sinha, J.
Ajay Gandhi & Anr. -Petitioners
versus
B. Singh & Ors. -Respondents
Transferred Case (C) No. 5 of 1997
With
T.C.No. 6 of 1997
Decided on 5-1-2004
Counsel for the Parties :
For the Appearing Parties : Raju Ramachandran, Additional Solicitor General, S. Ganesh, Sr. Advocate Buddy A. Ranganadhan, A.V. Rangam, J.B. Dadachanji, Rajiv Nanda, C.V.S. Rao, P. Parmeswaran, P.H. Parekh, V.B. Joshi, Rajiv K. Garg, Advocate for A.D.N. Rao, Advocate/Advocates.

IMPORTANT POINT
President, Income Tax Appellate Tribunal has power of transfer and posting of the members of the Tribunal.

Headnote:Income Tax Act, 1961-Sections 252(1) to (3)-Income Tax Appellate Tribunal-Power of transfer and posting of members-Whether Central Government can be said to have any power to transfer and posting of members of the Tribunal-President has the requisite power of transfer and posting of its members-Central Government never exercised its purported power of transfer and posting in its capacity as an employer or otherwise-Power of transfer and posting is a part of administrative function of the President as an ancillary power of constitution of benches-However, the President cannot be said to have an unguided, unfettered and unlimited jurisdiction-Guidelines laid down by the Court.

       Held : The scheme of the Act plays an important role. In the instant case, having regard to the provisions contained in sub-sections (1) and (5) of Section 255 of the Act, we are of the opinion that the President has the requisite power of transfer and posting of its members. For construction of a statute, it is trite, the actual practice may be taken into consideration. (Para 15)

       Keeping in view the fact that the independence of the Tribunal is essential; for maintaining its independence any power which may be conferred upon the executive authority must be proved to be in the interest of imparting justice. We are of the view that this long standing practice should be allowed to prevail over the stand of the respondents herein. However, we are of the opinion that by reason thereof, the President cannot be said to have an unguided, unfettered and unlimited jurisdiction as the same may be flawed with great consequences. We are, therefore, of the opinion that the following guidelines could serve the said purpose:

        (i) Initial posting of a member shall be done by the Government in consultation with the President of ITAT.

        (ii) Postings to different benches shall be done by the President having regard ordinarily to the following:

        (a) A member save and except for sufficient and cogent reasons shall not be posted at a place where he had earlier been practising as an advocate or a Chartered Accountant, as the case may be.

        (b) A member may not be posted at a place where any of his parents, spouse or other close relation is practicing as an Advocate or a Chartered Accountant in taxation matters.

        (c) Save and except for sufficient and cogent reasons, the Member shall not posted at a place of a period exceeding five years. Ordinarily, a Member may not be posted at a place where he was earlier posted unless a period of two years has elapsed.

        (iii) The President shall keep the Government informed about the orders of posting. The Government, if it so thinks fit, shall have the liberty to bring to the notice of the President, ITAT relevant facts including that transfer and posting of a member is not in conformity with the aforementioned guidelines. It shall also be at liberty to bring to the notice of the President any case of extreme hardship which may be faced by a member by reason of such an order of transfer and posting.

        (iv) The Government shall have further liberty to request the President to transfer a member from a particular bench when it is in public interest or in an exceptional circumstances. The President, ITAT, it goes without saying, shall consider the same in proper perspective. If the President refuses to comply with the request of the Central Government, although the transfer is in public interest in such a cases it would be open to the Central Government to pass order of transfer. (Para 21)

       In view of the fact that the large number of members are functioning at different places and, thus, the advice of the senior Vice-Presidents as regard the functioning of a particular member including his efficiency, disposal and other relevant factors may be considered by the President in ultimately passing such orders of transfer and posting. (Para 22)