33% of Income Tax Offices Vacant due to Policy Issues: Constitutional Bench of Supreme Court to Consider Petition by Gujarat Principal CCIT [Read Order]

A five-judge bench of the Supreme Court headed by the Chief Justice of India will be considering a petition by the Principal Chief Commissioner of Income Tax as the postings for the vacancy of 33% of income tax officers is vacant.

The petition filed by Shri Anurag Chandra, Deputy Commissioner of Income Tax in the Office of the Principal Chief Commissioner of Income Tax, Gujarat stated that as a result of the interim order earlier, the promotion to the cadre of Income Tax Officers from the cadre of Income Tax Inspectors could not take place. As a result, 33.33% of posts in the cadre of Income Tax Officers are vacant as the same cannot be filled in. As noted earlier, the decision in the case of K.Meghachandra2 applies prospectively i.e. from 19th November 2019.

A bench of Justice Abhay S. Oka and Justice S. Abdul Nazeer observed that “Prima facie, the seniority fixed based on the decision in the case of N.R. Parmar1 has to be given effect. Therefore, while we are recommending a reference to a larger Bench, interim relief will have to be vacated and seniority will have to be fixed on the basis of the impugned judgment, subject to the final outcome of the appeal or the decision of the larger Bench, as the case may be.”

The constitutional bench shall consider the following issues. Firstly, Whether the decision in the case of K. Meghachandra2 can be said to be a binding precedent in the light of the law laid down by the Constitution Bench in the case of Mervyn Coutindo3 and the law laid down by a Coordinate Bench in the case of M. Subba Reddy6?

And secondly, In absence of specific statutory rules to the contrary, when the ‘rotation of quota’ rule is applicable, whether the seniority of direct recruits who were recruited in the recruitment process which commenced in the relevant recruitment year but ended thereafter, can be fixed by following ‘rotation of quota’ by interspacing them with the direct recruits of the same recruitment year who were promoted earlier during the same year?

“The interim relief granted on 13th July 2018 stands vacated. Effect shall be given to the impugned judgment subject to the final outcome of this appeal or reference, as the case may be. We also clarify that the seniority of promotees and direct recruits who may be appointed hereafter will be subject to the final outcome of the decision of this appeal or the decision in reference, as the case may be. Accordingly, concerned persons shall be informed in writing by the Income Tax Department,” the Apex Court added.

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