Summary
In contempt proceedings over appointments to the Income Tax Appellate Tribunal, the Search-cum-Selection Committee had on 21.09.2019 recommended 41 persons for 37 vacancies; the Appointments Committee of the Cabinet approved only 22, picking 16 from the main list and 6 from the wait list, relying on a 'feedback' column in the file that often contradicted the Intelligence Bureau reports already before the Committee. The Supreme Court held that all inputs bearing on a candidate must be placed before the Selection Committee in advance, with later tangible material remitted to it only in exceptional cases; it directed the Union to place the feedback and its basis before the Committee within a week for its decision whether to modify its recommendations, declined to pursue contempt, converted the petition into an interlocutory application and directed that ITAT vacancies be filled.
Issues
- Whether the Union Government, in processing the recommendations of the Search-cum-Selection Committee for appointment of Judicial and Accountant Members of the ITAT, may rely on subjective 'feedback' obtained after the recommendations and not placed before the Committee, and whether such inputs must be remitted to the Committee for its consideration.
- Whether the exercise of contempt jurisdiction was warranted for the non-implementation of the Committee's recommendations.
Provisions considered
- Section 3(7) (recommendation of two names per vacancy) and the Search-cum-Selection Committee process, Tribunals Reforms Act, 2021The Attorney General relied on Section 3(7) to justify drawing on the wait list alongside the main list; the amicus pointed out that the corresponding Section 184(7) of the 2021 Ordinance had been struck down on 14.07.2021 and re-enacted. The Court left the amicus's remaining submissions open for final hearing and confined itself to the fairness of the process: the Committee, chaired by a Supreme Court Judge and including two Union Secretaries, conducts a comprehensive exercise with IB inputs, record verification and interaction, so all material must be placed before it in advance. (¶¶ 9, 10, 12, 20)
- Section 270A (penalty proceedings), Income Tax Act, 1961Objections to some candidates rested on pendency of penalty proceedings initiated by the CBDT; the amicus explained that Section 270A results in automatic initiation of penalty proceedings where assessed income exceeds returned income, a consideration the Committee itself should weigh. (¶¶ 10, 12)
Held
- The file placed before the Court shows feedback sheets tabulating, for each recommended candidate, the IB report, a 'feedback' and remarks; the feedback discloses no underlying material or process and in many cases is diametrically at variance with the IB report. Since the IB report is placed before the Committee before shortlisting and interview, recommended candidates have already been cleared by the IB on credentials, integrity and character; subjective comments without disclosure of underlying material substantially detract from the fairness of the process. (¶ 12)
- As a general practice all inputs bearing on a candidate, whether from the IB, the CBDT or any other source, ought to be placed by the Union Government on the record of the Search-cum-Selection Committee in advance, before recommendations are formulated; only in exceptional situations where tangible material comes to light afterwards should it be drawn to the Committee's attention so that it may determine whether any modification of its recommendations is necessitated. (¶¶ 11, 12)
- The feedback tabulated in the file note, together with any tangible underlying material, must be placed before the Committee within one week; a meeting of the Committee is requested thereafter to decide whether any modification of its recommendations is warranted, after which the Union shall process the recommendations and apprise the Court. The question of the ITAT's appropriate strength, the pendency figures having fallen from 92,386 to 50,426, is not decided as no Government decision has been taken. (¶¶ 13, 14, 15, 16, 17)
- It is not expedient in the interests of justice to pursue proceedings in contempt jurisdiction; the contempt petition is re-numbered as an interlocutory application, the vacancies in the ITAT shall be duly filled so that it can function effectively, and the amicus's remaining submissions are left open for final hearing. (¶¶ 18, 19, 20)
Result
Directions issued: the Union Government to place the feedback and underlying material concerning the Search-cum-Selection Committee's recommendations of 21.09.2019 before the Committee within one week for its consideration whether to modify its recommendations, then process the Committee's decision and apprise the Court; contempt not pursued, Contempt Petition (C) No. 708 of 2021 re-numbered as an interlocutory application; ITAT vacancies to be duly filled; listed on 12.07.2022.