In a setback to the government's efforts to stem the rot in the allegedly scam-tainted country's top income tax tribunal, the finance and law ministries differ on who should be appointed to head the troubled institution.
The Income Tax Appellate Tribunal (ITAT), which deals with appeals against the orders of income tax commissioners, has been in news for wrong reasons. Faced with complaints of judgments being allegedly outsourced for writing by some ITAT members, the government wants a course correction, but the two key ministries are unable to reach a common ground.
Former law minister M Veerappa Moily, had in last May asked finance minister Pranab Mukherjee to amend the Income Tax Act so that serving or retired high court judges could also be appointed to head the tribunal. In his reply, Mukherjee assured Moily that the issue has been addressed in the Direct Taxes Code Bill, introduced in Parliament in August 2010.
"The Direct Tax Code proposes to replace the Income Tax Act of 1961 and the issue has been adequately addressed," Mukherjee wrote.
The finance ministry informed the law ministry that the Direct Taxes Code Bill states, "The central government may appoint a person, who is, or has been a chief justice of a high court to be the president of the ITAT." The law ministry did not agree with the proposal to restrict the eligibility of the post only for judges.
"While making the request to widen the zone of consideration of persons eligible for appointment to the post by including serving or retired judges was not to exclude others," the legal affairs department informed the appointments committee of the cabinet last month.
Khurshid, in a letter to Mukherjee on January 10, asked for reconsideration of the matter. "The relevant clause of the bill should be substitiuted to state that a person who is or has been a high court judge or a judicial member of the tribunal shall be eligible to head it," he wrote.
The government is under pressure to improve the tirbunal's image following a letter from the chief justice of India.