The Supreme Court of India on November 21, 2022 issued notice on a petition challenging the eligibility criteria of an accountant member appointed to the Income-tax Appellate Tribunal under the Income-tax Act, 1961. The Tribunal (Conditions of Service) Rules, 2021prescribe that accountant members must have a minimum of twenty-five years of experience in the field of accountancy for membership of the ITAT. The constitutionality of this provision has been called into question by the Institute of Chartered Accountants of India. The petitioner organisation pointed out before a Bench of Justices M.R. Shah and M.M. Sundresh that the Income Tax Act prescribed a minimum experience of 10 years in the practice of accountancy for accountant members in Sub-section 2A of Section 252. “When the Act says 10 years, the rules cannot prescribe something contrary to that,” the counsel vehemently argued.
The counsel also drew the attention of the court to the judgement in Madras Bar Association v. Union of India, by which the apex court modified a similar provision for judicial members contained in the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2020, which was subsequently superseded by the 2021 Rules. A Division Bench comprising L. Nageswara Rao and S. Ravindra Bhat had directed the 2020 Rules to be amended to make advocates with an experience of at least 10 years eligible for appointment as judicial members in the tribunals. Accordingly, this modification was made in the 2021 Rules, but the eligibility condition for accountant members was left unchanged.
In Madras Bar Association, the court noted that the restrictive condition for appointment as judicial members must be set aside to allow practitioners of law with “a certain vitality, energy and enthusiasm” to be inducted, and to enable them to return to the bar after the end of their tenure, and “piece their life together again”. Senior Advocate and amicus curiae Arvind Datar had also supplied that it would be very difficult for competent and successful Advocates to “uproot themselves and accept membership of tribunals”, if they became eligible only at the very belated age of 50 years and resultantly, those less competent would be willing to take up the mantle. Echoing similar sentiments, the counsel for ICAI asked, “Chartered accountants need 25 years for acquiring the requisite qualification. Then, they need to have another 25 years of experience. This means that the member will be 50 years old during the appointment to the tribunal. At 50, who will be willing to accept the membership?” “Please look at the reality of the situation. This matter will require consideration,” he emphasised.
Case Title: The Institute of Chartered Accountants of India v. Union of India & Anr. [WP (C) No. 626/2021]
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