Landmark Judgements of Supreme Court on Section Section 255 [Procedure of Appellate Tribunal]

Central Government cannot confer upon it statutory power of transfer and posting of Members of Income-tax Appellate Tribunal

The Tribunal exercises judicial functions and has trapping of Court. The Tribunal functions under the Ministry of Law and Justice and the Law Secretary is the member of the Selection Board. The Ministry of Law and Justice, it is accepted, exercises a disciplinary power over the members of the Tribunal. The allocation of business rules of the Government of India in respect of the Tribunal is placed under the Department of Legal Affairs, Ministry of Law and Justice. Supervisory control under the rules of allocation of business relates to the administrative matters and not the judicial ones. The functions of the Tribunal being judicial in nature, the public have a major stake in its functioning, for effective and orderly administration of justice. A Tribunal should, as far as possible, have a judicial autonomy. The provisions of sections252, 254 and 255, confer a statutory power upon the President to constitute Benches. The Appellate Tribunal is a National Tribunal. The President subject to delegation of powers to Senior Vice-President or the Vice-President, exercises the administrative control over the members thereof. The Benches are to be constituted only by the President. No other authority is empowered to do so. Respondent No. 2 directed President of Tribunal that they would thenceforth submit all proposals for postings and transfer of its members to Ministry of Finance for its prior approval and that Ministry may also issue order for posting and transfer of Members when it consider necessary. Having regard to provisions contained in sub-sections (1) and (5) of section 255, President of Tribunal has requisite power of transfer and posting of its members. Since in impugned order passed by Government source of power had not been traced from provisions of Act but to Delegation of Financial Powers Rules, 1958 which have no nexus therewith, Central Government cannot confer upon it such statutory power of transfer and posting of Members of Tribunal. – [Ajay Gandhi v. B. Singh (2004) 265 ITR 451 : 186 CTR 506 : (2004) 134 Taxman 537 (SC)]