TMI BlogFinance Act, 2015- Single Member Bench (SMC) of ITAT - more scope is desirable for disposal of cases by SMC benches.X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2015- Single Member Bench (SMC) of ITAT - more scope is desirable for disposal of cases by SMC benches. - By: - CA DEV KUMAR KOTHARI - Income Tax - Dated:- 15-6-2015 - - Relevant links and references: Section 252 and 255 of the Income-tax Act, 1961 , THE FINANCE ACT, 2015 Increased scope of SMC benches of ITAT: The Finance Act, 2015 has increased scope for functioning of SMC benches, by increasing limit of assessed income from Rs. Five lakh to Rs. Fifteen lakh. However, considering all relevant aspects, author suggests that scope for functioning of SMC benches deserves to be increased based on value of disputes (revenue involved) and not assessed income. Further covered matters can be decided by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y senior member sitting singly. If suggestions of author are explored and implemented, it will go a long way in quick justice, early disposal of revenue disputes and will improve efficiency in government working. Presently we have shortage fo members in ITAT, therefore, disposal of cases by SMC benches will be very helpful in disposal of cases. Provisions about qualification and experience for members of ITAT: In section 252 we find relevant provisions which are reproduced below with highlights: Appellate Tribunal. 252. (1) The Central Government shall constitute an Appellate Tribunal consisting of as many judicial and accountant members as it thinks fit to exercise the powers and discharge the functions conferred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellate Tribunal by this Act. 1 [(2) A judicial member shall be a person who has for at least ten years held a judicial office in the territory of India or who has been a member of the Indian Legal Service and has held a post in Grade 3 [II] of that Service or any equivalent or higher post for at least three years or who has been an advocate for at least ten years. Explanation .-For the purposes of this sub-section,- ( i ) in computing the period during which a person has held judicial office in the territory of India, there shall be included any period, after he has held any judicial office, during which the person has been an advocate or has held the office of a member of a Tribunal or any post, under the Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or a State, requiring special knowledge of law; ( ii ) in computing the period during which a person has been an advocate, there shall be included any period during which the person has held judicial office or the office of a member of a Tribunal or any post, under the Union or a State, requiring special knowledge of law after he became an advocate. (2A) An accountant member shall be a person who has for at least ten years been in the practice of accountancy as a chartered accountant under the Chartered Accountants Act, 1949 (38 of 1949), or as a registered accountant under any law formerly in force or partly as a registered accountant and partly as a chartered accountant, or who has been a member of the Indian Income-tax Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Group A and has held the post of Additional] Commissioner of Income-tax or any equivalent or higher post for at least three years.] Observations: From the above provisions, we find that requirement as to qualification and experience for appointment of members of ITAT are very high. For professional intending to apply for Judicial Member (JM) or Accountant Member (AM) At least ten years experience is required. For people coming from prescribed services also there will be significant minimum experience in service. Experience at senior levels required is minimum three years. Therefore, the persons joining as JM or AM of ITAT have significant past experience, and during initial period of working as JM or AM, new members u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sually sits in benches with senior members. So within a period of about six months, new members also gain direct experience in working as member of ITAT with senior members. Many Accountant Members come from revenue services. Earlier they worked as Commissioner of Income-tax, so they have relevant experience. Therefore, after working as JM or AM for about one year a member is well acquainted by relevant aspects, and can work independently. Amended provision relating to hearing by single member of bench of Tribunal . Section 255 of the Income-tax Act, 1961 contains provisions relating to procedure of Appellate Tribunal. Provisions for functioning of benches are reproduced below with highlights for recent amendment abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut SMC benches, added: Procedure of Appellate Tribunal. Procedure of Appellate Tribunal. 255. (1) The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof. (2) Subject to the provisions contained in sub-section (3), a Bench shall consist of one judicial member and one accountant member. (3) The President or any other member of the Appellate Tribunal authorised in this behalf by the Central Government may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member and which pertains to an assessee whose total income as computed by the Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case does not exceed 3 [fifteen lakh rupees], and the President may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member. (4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it. (5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings. (6) The Appellate Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the income-tax authorities referred to in section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 193 and 228 and for the purpose of section 196 of the Indian Penal Code (45 of 1860), and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (5 of 1898). ------------------ Notes:- 1. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 2. Substituted for one hundred thousand rupees by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier one hundred thousand rupees was substituted for forty thousand rupees by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and forty thousand rupees was substituted for twenty-five thousand rupees by the Taxation Laws (Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment) Act, 1970, w.e.f. 1-4-1971. 3. Substituted vide THE FINANCE ACT, 2015 w.e.f. 1st day of June, 2015, before it was read as, [five hundred thousand rupees] Single member bench: Portion relevant to single member bench (popularly called SMC bench) are found in sub-section (3) of section 255 as reproduced above. Who can be judge in SMC? The President or any other member of the Appellate Tribunal can be sole member of SMC Who authorize member of SMC? The Central Government may, authorize a member of ITAT to constitute a SMC to dispose of case sitting singly. The case has first to be allotted to a bench, and then a member of that bench can be authorized to decide the case sitting singly. Scope: The case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should pertain to an assessee whose total income as computed by the Assessing Officer in the case does not exceed fifteen hundred thousand rupees. The monetary limit for SMC bench has the following history: ₹ 15 lakh w.e.f. 01.06.2015 , as per recent amendment. ₹ 500 thousand w.e.f. 01.10.1998 ₹ 100 thousand w.e.f. 01.04.1989 Rs.40 thousand w.e.f. 01.04.1971 ₹ 25 thousand before 01.04.1971 Scope of SMC benches can be increased for example by following methods: The amount of disputed revenue should be criterion instead of total income computed by the Assessing Officer. The Tribunal is to look into disputes which are on issues decided by Commissioners. On some relief allowed by Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, the revenue prefers disputes and on relief denied by Commissioners assessee prefers disputes. Therefore what is relevant is the amount of income / loss/ relief and tax effect and not the assessed income. For example in a case assessed income may be say ₹ 50 crore, however, disputes may be of meagre amount. Therefore, the amount of disputed relief allowed or denied can be better criterion in this regard. The revised limit of ₹ 15 lakh based on total income is also very low. It can be raised to ₹ 15 lakh of revenue in dispute. And for this purpose cases of any tax, interest and penalty can be covered. Provision can be made that all covered matters can be decided by SMC bench. In case an appeal contains som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e covered matters, those can be decided by SMC and other matters can then be decided by division bench. We find that the President of ITAT is authorized to constitute Special benches, and Third Member Benches, so the power to constitute SMC can also be vested in the President and / or Vice President of ITAT in any zone where President is not sitting. Tribunal is the final fact finding authority: ITAT is second appellate authority dealing direct taxes. ITAT is also final fact finding authority and the facts found by it are generally final and are not disturbed by the High Court or the Supreme Court unless the findings are challenged and found perverse or patently wrong. In case of perverse finding or patently wrong finding als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o usually courts prefer to remit the matter to the Tribunal for correct ascertainment of facts. Covered matters: If an issue is covered by judgment of High Court or other benches of ITAT, generally it is followed by division bench and SMC bench. If there is difference of opinion, then the president may constitute a special bench or larger bench to resolve difference. Therefore, SMC can easily dispose off covered matters. There are many issues with are covered and settled matters by judgments of Tribunal and High Courts and also the Supreme Court. Such matters can easily be decided by SMC bench and that will reduce work load on division benches. Implements, of above suggestions will make work of Tribunal very convenient to qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ickly dispose of cases. Pending disputes and disputed demand will reduce. There will be continuous functioning of benches. We find many times benches are not functioning because either Judicial Members or Accountant Members are not available to constitute Division bench of ITAT. This is also causing lot of tours by members posted at one place to other places. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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