INCOME TAX APPELLATE TRIBUNAL: VACNCIES AND SPEEDY

DISPOSAL OF CASES

THE BIRTH OF THE TRIBUNAL

On the historic day of 25th of January, the Tribunal was constituted in 1941. This date was notifi
ed as the appointed date on which Chapter II-A in the Indian Incometax Act, 1922 was to come
into force.

The Central Government in the first instance, appointed four members, on a tenure basis, on fi ve
year contracts. The members to be appointed met initially in New Delhi under the designation of
special offi cers for a period of one month, during which the rules of the Tribunal were framed
and the places of sitting decided upon. The rules were promulgated on 1st February, 1941.

Originally, the Members of the Tribunal were appointed on tenure basis, the contract being for a
period of five years. Since 25th February, 1950, the appointment is made on a permanent basis.

GROWTH OF THE TRIBUNAL

The Tribunal would have been born at an auspicious hour, for its growth was rapid. From the
very beginning it appears, the public was very much satisfied with the work done by the
Members of the Tribunal, their independence, judicial approach and fairness to both parties, the
taxpayer and the department alike. The number of appeals instituted before the Tribunal rose
from 1,607 in 1941- 42 to 22,380 in 1963-64 and 53,980 in 1979-80. As on 1st January, 2016,
there are 95,657 appeals pending before the Tribunal.

The Tribunal, lagged behind in its disposals and this resulted, at one stage, in the accumulation
of an alarmingly large extent of arrears. It is after this that steps were initiated for stepping up
considerably the number of benches, from 14 in 1967 to 23 in 1969- 70, 30 in 1971-72 and 38 in
1973-74. The next spurt of growth in the number of benches came in the year 1997, when the
strength of the benches rose from 38 to 53; and, the last increase in its strength came in the year
2003-04 when ten more benches were constituted. The latest bench to be constituted is in the city
of Ranchi. Currently, the sanctioned strength of the Tribunal is 63 benches spread over 27
stations comprising of 126 Members.

For smooth and better running, the Tribunal is divided in various zones. The headquarter being at
originally at New Delhi but since 1952 at Mumbai. At the top there is a President, followed by a
Senior Vice-President, Vice-Presidents and members in the judicial functioning and thereafter
the supporting staff.

FILING UP THE VACANCIES

“There are 88,000 appeals pending before the Income Tax Appellate Tribunal (ITAT) and efforts
are being made for their speedy disposal, its chairman said on Wednesday. Of the total appeals,
24,000 are pending before the Delhi bench followed by Mumbai bench (15000-16000), ITAT
Chairman Justice PP Bhatt told reporters here. As part of the endeavour to dispose the pending
appeals expeditiously, 41 vacancies in the tribunal will be filled in the coming days, Bhatt said.
It is likely to take one-and-a-half month to fill the vacant positions, he added. A new circuit
bench will be inaugurated in Dehradun by Union Law and Justice Minister Ravi Shankar
Prasad on Thursday. After that, 800 income tax related appeals from Uttarakhand pending
before the tribunal''s Delhi bench will be transferred to the circuit bench of Dehradun1”

The Government has laudably focused its energy on the arenas of economic growth as well a
national security as the arenas for sweeping and large scale upgradation. However, the current
state of the Judiciary and the quasi-judicial bodies act as a bottleneck for the change that the
1
https://www.outlookindia.com/newsscroll/88000-appeals-pending-before-income-tax-appellate-
tribunal-chairman/1745185
Government is seeking to introduce. Any policy whether economic, social or even defense
related that is to be implemented cannot provide the desired result unless a robust and effective
dispute resolution process is set up in order to decisively and fairly resolve the questions that
invariably arise.

It is therefore important that the Government treats the problems of the Judiciary at the same
priority as the National Security of the Country and accordingly takes bold steps to provide
proper infrastructure to the Judiciary and priorities the filing up of vacancies.

the immediate need of the hour being speedy disposal of the matters, unless the Central
Government takes up the issue of difficulties faced by the lower judiciary on war footing, the
entire system may look towards an imminent collapse. The total pendency of appeals before the
ITAT as on 1-07-2019 is 97,372.

Simply by filling up of vacancies, the pendency can be reduced to 75,000 within a period of two
years and this could very well usher in a new era where Appeals can be heard and finally
disposed of by the Appellate Tribunal which is the final fact finding authority, within one year of
filing. It is striking that due to shortage of judges in the Bombay High Court, the tax appeals
which have been admitted in the year 2000 are still pending for final adjudication.

Recent paper reports stated that nearly 10,000 prosecution matters are pending before the
designated special magistrate court in Mumbai. Only one Court has been notified to decide
prosecution matters arising from tax cases which also handles other economic and indirect tax
related offenses. Some of the prosecution matters are more than 15 years old and are still frozen
at the state of framing of charges. With the above background, one can have a fair estimate of the
time that is wasted in litigation proceedings

The Economic Survey 2019 highlighted the reasons for the huge pendency and also measures to
be taken to resolve the same (chapter 5 www.itatonline.org).

In the introduction, it is stated as under,

 “Arguably the single biggest constraint to ease of doing business in India is now the ability to
enforce contracts and resolve disputes. This is not surprising given the 3.5 crore cases pending
in the judicial system. Much of the problem is concentrated in the district and subordinate
courts. Contrary to conventional belief, however, the problem is not insurmountable.

A case clearance rate of 100 per cent (i.e. zero accumulation) can be achieved with the addition
of merely 2,279 judges in the lower courts and 93 in High Courts even without efficiency gains.
This is already within sanctioned strength and only needs filling vacancies. Scenario analysis of
efficiency gains needed to clear the backlog in five years suggest that the required productivity
gains are ambitions, but achievable. Given the potential economic and social multipliers of a
well-functioning legal system, this may well be the best investment India can make.”2

2
https://itatonline.org/info/reduce-court-holidays-to-improve-efficiency-reduce-pendency-of-3-5-cr-cases-
economic-survey-2019/