At the outset, I welcome you all to the family of this august institution and I thank the Hon’ble President for giving me this opportunity to interact with you all. I have been directed by the Hon’ble President to talk on a very delicate subject. I consider it to be delicate because, generally, our conduct flows directly from our inherent nature. If our conduct is not in consonance with the expected norms, then to mould it, to fit within the norms, we are expected to change our nature which, it is believed, is very difficult, or almost impossible. Therefore, at the end of the talk, if you feel that you need to undergo some transformation, then, also keep in mind that merely listening to a lecture on conduct or reading some material about it, is not going to help you. A constant, conscious and conscientious effort will be required on your part, to reach the expected levels. Let it be known, that my role here, is not to sermonise. Whatever I am going to say, is not my own creation. They are words of wisdom handed over to us from our esteemed seniors, both present and past and also by acclaimed jurists of this country. Right now, you all may be wondering as to how you will feel when you actually sit on the regular bench and that how you will be accepted by your colleagues and the Bar. Well, let me assure you, if your conduct is conducive, you have won half the battle. How — we now proceed to see, somewhat in detail.

Foremost, it has to be appreciated that the Institution you have joined, is a temple of justice of which you are the pujari. The seat you are going to adorn, is a divine seat, because, to do justice is a divine function. Only those who are fortunate, get an opportunity to sit on it. However, the unfortunate part is, that some of us forget that we are mere mortals, and start harbouring a feeling, that we ourselves are divine and then all the trouble starts. The question is, why such feeling? Well, it is not denied that the Tribunal has wide powers under the statute to pass orders as it thinks fit. But power breeds arrogance, and being unmindful, of this likely culmination, we start behaving as if we are omnipotent and that we can say or do whatever we like, simply because we are sitting on a slightly elevated pedestal. We forget that we are public servants first, and then quasi-judicial officers with powers prescribed by the statute. Now let us see how this culminates into our day-to-day behaviour, most of the time, unconsciously.

Our good conduct should start with being punctual. Firstly, we should try to reach the office as early as possible and not at 10.15 or 10.20, leaving very little time to get ready to go to the assembly and then to the court. Of course, I fully appreciate, that to reach office in time, we are dependent on our colleagues also, in view of sharing of vehicle amongst the members. But if everyone understands the value of being punctual, then there will not be any difficulty. Reaching office early has many advantages. You can lead by example, and induce your P.A. and peon also, to come early. If you yourself are late, you lose the moral authority to tell them anything. You are quite fresh in the early morning and, if your PA is also there, you can get at least 30 minutes to dictate some portion of the pending order. Let me assure you, work done during this hour of the day, will be the most productive in terms of quality. Secondly, you have to be punctual in reaching the assembly but before going to the assembly, it should be ensured that, your dress is not only in conformity with the rules, but it is also immaculate in all respects. It is Shakespeare who said that “apparel oft proclaims the man”. Immaculate dressing lends dignity to the position you are holding and hence, it is necessary that you do not show a casual approach towards it. Casual approach creeps in, because of its routine nature and we start considering it to be a mundane ritual. Be that as it may, at 10.24 you should be ready for the first bell to go and no sooner the bell goes at 10.25, you should be walking down the corridor to reach the chamber of the senior member. I have seen people having a very casual attitude in this regard. It has been a reputation of this Institution that all its courts in the country start functioning at 10.30 sharp. Hence, any disturbance in this schedule, upsets the Sr. Members/VP or President, as the case may be. It is a matter of inculcating the habit, and if we are conscious of our duty, it may not be difficult to form the habit of being punctual.

From the assembly, we now move to the court room. By now, you must have observed the convention, to greet the court with folded hands and then take your seat. Also, as per convention, the Sr. Member sitting to your right, is the presiding officer and will start the proceedings of the court. It is the prerogative of the Sr. Member to conduct the proceedings. Normally, again as per our convention, we first start with adjournment requests. Whether to grant adjournment or not, if to be granted – to what date and all related matters are to be exclusively dealt with by the Sr. Member. As a member sitting on the left, you are not expected to interfere in these matters. Let it be clarified, that it is a matter of courtesy, if the Sr. Member seeks your opinion in matters of adjournment, but he is not bound to do so. Most of the time, it will be dealt with by the Sr. Member himself only, and you, being part of the Bench, your concurrence is deemed to be there in whatever he decides, howsoever strongly you may feel, that your decision could have been different. In fact, you should take these to be the most relaxing moments on the Bench as you are not expected to bother yourself in these proceedings. Thus, there should not be any discord on the Bench on this account.

General practice is to take up covered matters after adjournment are over. By and large, the Sr. Member would be more in the know of the covered matters. However, while on the Bench, if you feel, that it is not a covered matter, and that, it needs argument, you may whisper in the ears of the Sr. Member. Having done that, leave the matter to the Sr. Member, and go, by what he decides. Avoid friction, both on and off the Bench. Another thing to be kept in mind, is that, a matter is to be treated as covered even if you do not agree with the conclusion in the earlier order. Even if you hold a different view, or even if you strongly feel that it is a wrong conclusion, you are bound to follow the earlier order unless subsequently there has been an amendment in law or there has been a decision of the larger bench or a decision by the jurisdictional High Court. At best, with the concurrence of the Sr. Member, the matter may be referred to the Hon’ble President to constitute a larger Bench if you are having reservation about the decision in the earlier order. At times, in situations like this, a strong will is required to resist the temptation of passing an order expressing different view.

After the covered matters, hearing in case of other matters start. Here again, it has to be kept in mind, that it is the Sr. Member, who will conduct the proceedings, and the proceedings shall be treated as closed once he declares it to be closed. The process of hearing the parties is our core job and it is in fulfilment of one of the most important principles of natural justice; i.e., Audi Alterem Partem. This has to be followed, both, in letter, and in spirit. It means, you are required, not only to hear, but also listen, and listen attentively. Your total concentration has to be towards the arguments being advanced. Here, I will narrate some of the things that I have observed in my tenure so far. I have seen members dozing of for a few moments during the arguments. Sometimes I have seen members, thinking of something else — may be, about their personal problems. Once I whispered to a member sitting on my left — did you follow the argument, I did not follow it — the member was frank to immediately admit that, sorry, he has not heard what is said. At times, I have seen members engrossed reading either the assessment order or the CIT(A)’s order, while the counsel is trying to make his point. The tendency is, to point out some finding of the lower authority, and cut short, the argument of the counsel. I do not claim myself to be perfect. I too, may have, at times, fallen prey to these tendencies. The purpose of pointing out these tendencies is that we should constantly be aware of the pitfalls, and try to avoid them, as far as possible. Another important thing to be noted during the hearing is about the use of log-book. Sometimes, a certain amount of over- confidence, conquers us, and we hardly jot down anything in the log-book. The over- confidence may be about memory. Well, speaking for myself, I will never trust my memory on this aspect. The counsel from both sides, may have made several points, and we may have heard, at least, half a dozen cases, during the day. Even if we miss a single point, it can cause injustice to either side. Not only that, the counsel whose point we may have missed, will be horribly upset, and, despite his best efforts, he may fail, for no fault on his part. Just think for yourself, that if someone refuses to listen to you, what would be your feeling. If these pitfalls are not taken care of, Miscellaneous Applications are bound to follow, which only adds to our work.

Another important thing to be noted during the hearing is that, one should not keep on interrupting the counsel while he is arguing, either by putting too many questions, or by putting forth your own view-point or by finding faults or flaws in the argument made by him. It needs to be appreciated, that every counsel has his own way of arguing, and may have prepared in a particular way, to argue the matter. By interrupting, we are breaking his chain of thoughts, and he is bound to be disappointed. All the faults or flaws in the argument can be taken care of in the order. Yes, many counsel have the habit of repeating an argument for more than once. To him we can politely say, Mr. Counsel, we have noted this point, you may please proceed further. Important thing to be taken care of is, about modulating our tone when we want to tell anything to the counsel. If a counsel is cantankerous and has to be told certain thing firmly, we can be firm in our tone without being impolite or without an insulting tone.

Another important thing to be noted is, that when you are acknowledging an argument, after a brief clarificatory exchange, do not give a feeling, that you are in agreement with what is said. There have been complaints — rightly or wrongly — saying that in the court, the members accepted my arguments but we were surprised to find the order against us. There have also been complaints, where the counsel for the assessee has not been allowed to argue, and the Departmental Representative has been told, that the revenue has no case. But to the dismay of the assessee’s counsel, he finds the order against him. At times, it has also been noticed that a Member’s peon interrupts in the course of hearing to obtain some signature or to give some message to the Member concerned. This also, is quite irritating, particularly for the counsel, as it disturbs his rhythm of argument. It also affects the serenity of the court. The peon should be strictly instructed not to interfere in the course of hearing, unless there is a very strong reason to do so.

Some members harbour a mistaken belief that if he does not speak in the course of hearing, he would be dubbed as a dumb member, not knowing anything. Well, you can prove them wrong, by making your order speak for you, rather than you speaking for yourself. Yes, at times you may need clarification. In that event, if you are sitting on the left, you may whisper in the ears of the Sr. Member, about the point you wish to clarify. Then leave it to the Sr. Member — either he himself will seek clarification, or may advise you to seek clarification. But do not put the question to the counsel without taking the Sr. Member into confidence. Care must be taken to ensure, that our questioning does not give the impression, that we are hostile to the counsel, or that we have arrived at a decision against him. I have also come across some members who keep prompting and advising the Sr. Member to ask this and ask that. This irritates the Sr. Member, it irritates the counsel and a confused or somewhat chaotic atmosphere prevails in the court.

Throughout the proceedings, the atmosphere in the court should be cool, calm, co-operative from both sides and representatives from both sides, should enjoy, arguing the matter before you. No undue pressure should be felt by either side, and it would also be advisable, to keep it light by spraying a little humour here and there, but certainly, not at the cost of the dignity of the Bench. Dignity of the Bench is supreme. In turn, we should also maintain the dignity of the representatives, first because they are also humans, sensitive to the remarks made from the Bench, and secondly because after all, they are the officers of the same court over which you are presiding.

Thus, so far as proceedings in the court are concerned, it can be summarized that, be a patient listener. Sit with an open mind. At times, an argument may apparently seem to be absurd. But my experience has taught me, that many times, that very argument held sway and went in favour of the party putting it forth. It could happen only because of open mind. Keep in mind that every person has a view-point to make. Listen to it, and note it down in the log book, even if you have not appreciated it while on the Bench, and finally, remember that when you are on the Bench, particularly on the left, silence is golden. Preserve that gold with you, rather than frittering it away by opening your mouth. Leave aside your ego. It was Swamy Chinmayanand, who said that ego is nothing but a sum total of past memories and future aspirations. I fail to understand as to how past memories, and your future aspirations, should come in your way of performing your routine duties. Solomon Gabriel said, that the first step in the acquisition of wisdom is silence, the second listening, the third memory, the fourth practice, the fifth teaching others. Of course, I am not trying to teach you but I am only carrying out the directions of the Hon’ble President to apprise you as to what is expected of you. If the parties are heard patiently, their satisfaction knows no bounds, irrespective of the outcome of the appeal. But, even the best of the orders will not be appreciated, if they are passed without giving a due hearing.

Having completed the hearing, you will fold your hands and retire to the chamber of the Sr. Member. The most important aspect to remember here is that you are not supposed to break away from the Sr. Member before you have stepped into his chamber, howsoever compelling the reasons may be. Once you have stepped in, then you may excuse yourself for a minute or two, but only if the circumstances are compelling. As per established convention, the Sr. Member will treat you with a tea. The idea behind this convention is that, the two members discuss in brief, the heard matters, in a relaxed atmosphere, after a gruelling session in the court. This discussion is of atmost importance as it clears certain doubts, irons out the creases, and helps in reaching a consensus, and helps avoiding dissensions. If you feel that the other member is not inclined to discuss, try to coax him a little, inviting him to discuss the issues. At this juncture, it may also be kept in mind by both the members that the order sheets are signed as early as possible, so that the onward journey of the files is not delayed.

After tea, and brief discussion, you may retire to you chamber. The Sr. Member will then exercise another prerogative of his, and that is distribution of the heard files. If the Sr. Member has asked for your choice of matters, you may indicate it, or may leave it to the Sr. Member himself. I repeat, the Sr. Member is not bound to ask for your choice, and that, it is his exclusive privilege to do the distribution. Of course, it is expected of the Sr. Member to make a fair distribution. However, when the distribution is not fair, or despite being fair, the junior member still has a grievance, I have seen different members reacting in different ways. My suggestion is that, do not react. Simply and willingly, accept the distribution.

Having got the files for dictation, now is the time, for study and dictating the orders. So far as the art of writing the order is concerned, the same is being dealt with by my senior colleague Shri Bakshi and hence I dare not trespass over his jurisdiction. The only important thing to remember, is that, you should not keep the matters pending for a long time, and in any case, for not more than sixty days. If it is likely to exceed sixty days, it is your duty to bring it to the notice of the Vice President, who will either consider your request to extend the period, or may give any other necessary directions. It will also not be out of place to mention that if you have any reservation on any matter, do not hesitate to discuss it with the other member. Now you will also start receiving orders dictated by your colleague on the Bench. I have seen certain members, sitting over these orders, for a long time under the pretext that he was busy with his own dictation, and had no time to go through the orders. This is no excuse. Please give priority to the orders of your colleagues. Your dictation is a never ending process, and will continue, till you are in service. Hence, this cannot be the reason to delay the orders, waiting for your signature. You should go through the order very scrupulously, and if you agree with the reasoning and conclusion, you should immediately put your signature and send for onward processing. You may correct minor typographical errors under your own initial, but if you feel that certain sentence needs to be modified or reframed, you should draw the attention of the other member who wrote the order. You may give your suggestion to him, and leave the rest to him, only. If you have any reservation, about the reasoning or the conclusion, it is your duty to discuss the matter with the other member. There have been instances, though a few, where a member who does not agree with the view expressed by his colleague, sends a written note to his colleague, stating that, while arriving at a particular conclusion, you have note considered this argument, or this evidence, on record. Please avoid exchanging such notes in writing. Once you put it on paper, it becomes a part of the record, and when it is on record, it is nothing short of washing dirty linen in public. In an unreported judgment by the Gujarat High Court in Gift-tax reference No. 6 of 1988 dt. 3-5-2003, the court observed that when there is difference of opinion, the points on which the members have differed, are referred to the Third Member for opinion, and the majority view prevails. There is no process of making any comment on any of the opinions rendered by the differing members by such members, contemplated under the said provisions and indeed, such a course can lead to ugly and acrimonious exchanges, vitiating the atmosphere of comity and brotherhood amongst the Hon’ble Members of the Bench of the Tribunal, and would be highly improper, and not befitting the high dignitaries entrusted with the sober task of decision-making process by law. The best course, and perhaps the only course is, to orally discuss the matter with your colleague. After the discussion, if you feel that there is no agreement, then very courteously you may tell your colleague that you would be passing a dissenting order. The entire discussion, and the ultimate decision, to pass a dissenting order, should be carried out in a very cordial atmosphere, without any ill-feeling, or acrimony on either side. In short, both the members should willingly agree, to disagree.

Having finished your duty on the Bench, we now come to the conduct off the Bench. Of course, the foremost thing to remember is never to enter into loose talk either with your colleagues, with any member of the Bar or with the Departmental Representative. By loose talk, I do not mean to say that, we should not converse with our colleagues, at times, in lighter vein, or that, all the time we should be serious and morose. By loose talk I mean, back-biting, or such talk, which can harm others, or which tend to show our colleagues in bad light. Tiru-Valluvar, the legendary Tamil poet, said, he who indulges in purposeless talk causing disgust to his company, earns universal contempt. Such talk travel to undesirable destinations, and that too, not without getting garnished or marinated en route. It has many consequences. Firstly, it shows you in bad light in the eyes of others. Secondly, the person towards whom the conversation is directed, may misunderstand you, without there being any bad intention, on your part. Thirdly, it affects the quality of your work. Fourthly, the time which you spend in useless conversation, could have been utilized more fruitfully in study. This is true, not only in the initial years but for all times to come. Learning, as you all know, is a never ending process and the more time you devote for it, the better would be the quality of your orders. It will also help you in speedy disposal. Thus, my first suggestion, so far as your conduct off the Bench is concerned, never waste your time in worthless talk with anyone. Second most important aspect is that, you give utmost respect to your seniors, in every aspect of your activities. When any important discussion is going on, do not jump to express your views when a senior is talking, and till you are expressly invited to express you views. My Third suggestion is, of course, slightly out of the purview of the subject, yet not out of place, and I delve on it, with the permission of Mr. Bakshi. When you are writing an order in a matter which is covered by an earlier order of the Tribunal, some important aspects need to be taken care of. Firstly, the primary details of the order you are relying upon should be incorporated. They are ITA No., date of the order, name of the assessee in whose case it was passed, and the assessment year to which it pertains. Very often I have found the date of the order to be missing. The date is important because if anyone wants to read that earlier order, the order can be easily located if the date is available. Secondly, briefly mention the issue that was decided in the earlier order and then giving the facts in your case, you can say as to how the matter is covered by the earlier order. Recently, I was hearing the matter where the counsel rose up to say that it is a covered matter. The appeal had arisen out of the assessment order which was passed pursuant to CIT’s direction under section 263 of the Act. In the appeal before the Tribunal against the order under section 263, the Tribunal had merely stated that similar issue had arisen in the case of the assessee’s sister concern and following the order of the Tribunal in that case we quash the directions of the CIT in this case also. Now we didn’t have the order under section 263 in the case of the sister concern, and the counsel also, for reasons known to him was not carrying a copy of the said order. We were at a loss to understand as to what the directions of the CIT were in the case of the sister concern and how in the present case also, the Tribunal had quashed the directions of the CIT. Ultimately, we had to wait for a day till the counsel produced the copy of the 263 order and then only we could dispose of the matter before us. The Gujarat High Court in the case of Dagina vs. DCIT reported in 147 Taxman 599 observed that recently, it has come across number of orders of the Tribunal, wherein the appeals have been disposed of cursorily, to say the least. The Income Tax Appellate Tribunal is a body which has earned a name and reputation for itself as a leading institution dispensing quick justice and it is hoped that the Tribunal shall maintain the standards it has set for itself. In a very recent decision by the Madras High Court in the case of CIT vs. Matrix Intel Pvt. Ltd. (294 ITR 257) in which it was observed as follows:

“From a reading of the above, it is clear that the Tribunal has merely relied on the decision of the Bangalore Bench of the Tribunal, without even giving the citation. The Tribunal is the last fact finding authority and the Tribunal is required to examine the materials and records before rendering a decision on any issue raised by the parties. The Tribunal ought to have decided the case by recording complete facts and assigning cogent reasons. In this case, mere reference to the decision of the Bangalore Bench of the Tribunal. Would not be enough and sufficient. Also, the Tribunal should have considered the arguments advanced by counsel on both sides and given reasons before coming to the conclusion.”

Therefore, please take care to explain briefly as to how the matter is overed by the order you are relying upon.

I think I have said enough, and though in the beginning I claimed that I do not intend to sermonise, yet I may have indulged in it, though involuntarily. I was only performing my ‘dharma’. I had to conduct myself thus, only to enable you to appreciate as to what the Institution expects from the Members while conducting themselves on and off the Bench. To quote Tiru-Valluvar again, only the joy that comes from right conduct is true happiness. Other pleasures are really sources of pain and causes of shame. I thank all of you, for a patient listening. I thank all the members, past and present, with whom I have had the opportunity to work, for providing me with the necessary inputs, and once again, I thank the Hon’ble President for giving me this opportunity. I wish the new members a very satisfactory tenure in the Tribunal.

Source : Speech delivered at programme for Orientation & Training of New Members, Income Tax Appellate Tribunal, Mumbai. held from 12th November, 2007 to 28th November, 2007.

Acknowledgement: We are thankful to Hon’ble President, Vice President of ITAT, Mumbai for granting us permission to print the article for the benefit of Tax Professionals.