The Income Tax Appellate Tribunal (ITAT) is open to setting up a camp office at Shimla for Himachal Pradesh litigants and considering a similar arrangement for Jammu and Kashmir, even as it rules out the feasibility of a separate regular Bench for Himachal Pradesh because of its relatively small contribution to the pending caseload at Chandigarh. The tribunal has brought down its nationwide pendency from around 3 lakh cases to approximately 60,000, with fresh institution and disposal rates now almost matching.
ITAT Officiating President Mahavir Singh, in Chandigarh on an official visit, said a proposal from the local zone could pave the way for a camp office at Shimla or anywhere else in the State to facilitate litigants from Himachal Pradesh. He also indicated that a similar arrangement could be considered for Jammu and Kashmir.
On the possibility of expanding the tribunal’s presence in the region, Singh clarified that its jurisdiction covered Punjab, Haryana, Jammu and Kashmir and Himachal Pradesh. The tribunal presently has two Benches at Chandigarh and one at Amritsar.
Explaining why a separate regular Bench for Himachal Pradesh was not feasible, he said: “We are having two Benches at Chandigarh and one Bench at Amritsar. Pendency in Chandigarh is around 2,400. So, out of 2,400, Himachal contributes only 400. So, it is not feasible.”
However, he made it clear that a camp office remained a possibility. “But camp office, yes. If proposal will come from local zone, then definitely at Shimla or any camp office can be done. So that, to give ease to the local litigants,” he said.
He separately extended the possibility to Jammu and Kashmir, saying: “Similarly, J&K also, if proposal will come from general office, it will be done.” The indication assumes significance for litigants who otherwise have to travel to the existing Benches for the adjudication of income tax appeals.
Pendency reduced from 3 lakh to 60,000
On the tribunal’s nationwide pendency, Singh said the institution had achieved a substantial reduction from approximately 3 lakh cases at an earlier stage to around 60,000 presently.
“Tribunal presently is having a pendency of around 60,000. And I’ll tell you, we take great pride in telling that we are the only institution in the country which has reduced the pendency. At one point of time, our pendency was 3 lakh,” he said.
Describing the reduction as a major institutional achievement, he added: “From 3 lakh to 60,000, it is a big achievement. I feel pride in this because I am part of this institution from last 25 years.”
He acknowledged that pendency had increased somewhat over the past two to three years, attributing it to the improved disposal rate of appeals by Commissioners of Income Tax (Appeals).
“Again, because in last 2-3 years, because CIT appeals are working, so the disposal rate in CIT appeal in last 2 years increased. So, due to that, little increase is there. Now, it is at 60,” he said.
Asked whether fresh institution exceeded disposal, Singh answered in the affirmative but said the two were almost matching. “Institution is more, yes. But we are matching, almost matching,” he said.
New buildings, land acquisition and cadre restructuring
On the need to strengthen infrastructure and manpower in view of the increasing demands on the tribunal, Singh said several initiatives had been undertaken under the leadership of ITAT President Justice C.V. Bhadang. He said new buildings had been created for the Calcutta, Ahmedabad and Delhi Benches, while land was being acquired at other locations.
“Our President Justice C.V. Bhadang, after taking over, has taken many steps like building infrastructures. He has created new buildings of Calcutta Benches, Ahmedabad Benches, Delhi for that purpose. And other places also, we are acquiring plots,” he said.
The tribunal was also in the process of acquiring land for its Mumbai operations. “For Bombay, we are in the process of acquiring a land,” he added.
On manpower, Singh said a cadre restructuring proposal had been mooted and was undergoing the requisite inter-ministerial process. “We have mooted a cadre restructuring proposal before Ministry. And that is in the process. And I think within a year or six months, it will be over,” he said.
Explaining the time involved, he said: “Because it is a long process. We have to go to DOPT, we have to go to Expenditure Ministry. So, that process is taking time. But we are in the process of doing the things.”
ITAT itself functions as an ADR mechanism
On whether alternative dispute resolution (ADR) could help reduce litigation, Singh said the tribunal’s own functioning incorporated elements of an informal dispute-resolution mechanism because it was not bound by the strict procedural requirements applicable to ordinary civil courts.
“ADR, we are working as an ADR actually as far as litigation at this level is concerned because we are not bound by strict civil procedure code, strict evidence Act,” he said.
Describing the tribunal’s hearing procedure, he added: “The tribunal procedure is very informal. Any day, if you have occasion to see, you will see it is very normal and formal. It is not strict rule based.”
He said the relatively informal procedure enabled the tribunal to pronounce decisions in a large majority of cases on the same day. He added the relatively informal procedure enabled the tribunal to pronounce decisions in a large majority of cases on the same day. “In 90 per cent cases, we pronounce there and there. So, we work as an ADR also,” he said.
However, he distinguished the tribunal’s role from the scope for resolving income tax disputes before they reach the appellate stage. Such mechanisms, he said, would have to be developed by the Revenue Ministry or the Income Tax Department.
Asked specifically whether pre-litigation counselling could make a difference, Singh agreed that it could prevent a certain proportion of disputes from entering the litigation process. “Yes, it can. It can reduce. For that, department has to take steps,” he said.
One order can dispose of 20 similar cases
On measures to improve case management and accelerate disposals, Singh said the tribunal was regularly identifying matters in which the issues had already been covered by the Supreme Court or the High Court, and segregating them. It was also consolidating disputes involving similar questions so that a common decision could help dispose of multiple appeals.
Explaining the benefit, he added: “One case can dispose of 20 cases. So, these type of steps we are taking regularly.” He also underlined the role of technology in identifying and consolidating matters and tracking the institution of appeals.
“Yes, role of technology is very much needed. It helps in consolidation of the matters…. Everything is on fingertips. Technology is helping,” he said.
AI cannot take final judicial decisions
On the possibility of AI-driven courts handling income tax disputes in the future, Singh said artificial intelligence was still at a nascent stage and could not be entrusted with final judicial decision-making. “AI is in very nascent stage actually. And it is only in experimental stage. In final decision making, it cannot be implemented,” he said.
He acknowledged that AI could assist in litigation-related work, including arguments, but maintained that such assistance could not be equated with the actual exercise of judicial discretion. “No doubt, it can be used for the purpose of litigation, arguments, etc. And to some extent, some help can be taken. But it is not a final thing,” he said.
Explaining the limitation, he said adjudication required the application of the human mind and an approach grounded in compassion and fairness. “Because AI, what result it will give, nobody knows. Litigation is such a thing where you have to apply your mind. And you have to be compassionate and even-handed,” he said. “If you are not compassionate, then no purpose of this creating courts.”
Same-day pronouncement of orders a transparency measure
On transparency and building public and corporate confidence in the tribunal, Singh highlighted its practice of pronouncing judgments immediately after hearings in most cases. He said the tribunal’s rules provided for pronouncement of judgments in court, enabling litigants and their counsel to know the outcome without waiting for a subsequent date.
“Actually, the decision making in tribunal, like our rules say so, that you pronounce judgments there and then. I know that 80-90 per cent cases, our pronouncement is there and then. That means finality comes in that judgement,” he said.
Explaining the procedure, he added: “Then public knows that immediate after conclusion of hearing. In court itself, we pronounce that your appeal is allowed, dismissed or partly allowed. This issue is allowed; this issue is dismissed.”
He said the presence of the counsel and assessee during the pronouncement ensured that the parties immediately knew the outcome. “So, if counsel along with the assessee is sitting, they come to know that it has become final. So, this is a transparency. So, there is complete transparency,” he said.
Clarifying that the practice did not extend to every matter, Singh said larger cases requiring deliberation were reserved for judgment.
“Some bigger matters, etc., there we reserve the judgments. And we keep for, their deliberations are required. There are very few cases,” he said.
