CIT Vs. Ram Singh (Rajasthan High Court)
Strictures passed regarding poor quality of orders of the ITAT. Government urged to ensure that only competent persons are appointed Members of the ITAT
The department filed an appeal in the High Court contending that the Tribunal had disposed off the appeals filed before it (relating to rejection of books of account u/s 145 and estimation of gross profit) without giving any reasons. HELD by the High Court:
(i) We find the judgments of the ITAT being the stereo typed, non-speaking, unreasoned, arbitrary and whimsical;
(ii) We cannot avoid observing that of late the quality of orders that are come out from the Tribunal in exercise of its appellate power under section 256 of the Act are found to be wanting and in many respect and many a times the orders are very prefecture, even non-speaking orders and has no correlation to the fact situation that prevails in a given case;
(iii) We also notice that the members of the Tribunal have developed an unhealthy habit of quoting totally unrelated judgments which are not applicable at all to the facts of the case, to pass orders not otherwise sustainable on facts or in law. We strongly deprecate such a tendency on the part of the members of the Tribunal, which is quite naturally a professional Tribunal comprised of expert members, one member from the Revenue side and another member from the accounting side, with considerable experience in their respective fields and to whom we can attribute expertise. We feel sorry that the confidence posed by the Legislature is not being justified by passing orders that are outcome from the Tribunal now-a-days;
(iv) It is high time the method of recruitment to the Tribunal is also reviewed by the authority concerned and at least henceforth it is ensured that the members of some standing, integrity and competence are put in place as members of the Tribunal and not all and sundry;
(v) The Legislature, particularly the Union Parliament may also take note of such tendency on the part of the Tribunal and ensure for suitable legislative measure so that the purpose and the object with which such Tribunals are constituted really subserve not only the interest of aggrieved assessee but also to ensure that the Revenue’s interest is not simply scarified or jeopardized by errant members;
(vi) Registrar General of this court is directed to send copies of this judgment to the Law Commission of India, Secretary to Department of Revenue, Ministry of Finance,. Government of India, Secretary to Government, Ministry of law and Parliamentary Affairs, Government of India and the Central Board of Direct Taxes (CIT Vs. Gauthamchand Bhandari 347 ITR 491, 499 (Kar) and several other judgements referred to).
Note: By the above order, 81 appeals were remanded to the ITAT for fresh decision.