TMI Blog2013 (8) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... sheet - Charges relating to quasi judicial function - Held that:- It is now well settled principle of law that an officer taking decision in exercise of quasi judicial function is not immune from disciplinary proceedings. However, it is only the conduct of the officer in discharge of his duties and not correctness or legality of his decision which could be the subject matter of the disciplinary proceedings - A wrong interpretation of law cannot be a ground for misconduct - it is necessary that before initiating disciplinary action, the Department must have a prima facie material to show recklessness and that the officer had acted negligently or by his order unduly favoured a party and his action was actuated by corrupt motive - Following decision of Union of India vs. K.K.Dhawan [1993 (1) TMI 255 - Supreme Court], Zunjarrao Bhikaji Nagarkar vs. U.O.I. [1999 (8) TMI 142 - SUPREME COURT OF INDIA] and UOI & Ors. vs. Arindam Lahiri [2009 (3) TMI 909 - Delhi High Court] - Decided against Petitioner. - W. P. (C) 3209/2012 - - - Dated:- 5-8-2013 - Pradeep Nandrajog And V. Kameswar Rao,JJ. For the Petitioners : Mr. R. V Sinha, Mr. R. N. Singh and Mr.A.S. Singh, Advocates For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh, acting beyond his jurisdiction and displaying an attitude of insubordination to and confrontation with the authorities under whose control and directions he is required to function, raised, discussed and commented upon issues on which the Central Board of Direct Taxes had already issued clarification under the Voluntary Disclosure of Income Scheme of 1997. By his aforesaid acts, Shri Ajit Kumar Singh failed to maintain integrity and devotion to duty and exhibited conduct unbecoming of a Government servant in violation of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS Conduct Rules, 1964. Article II: That Shri Ajit Kumar Singh, while functioning as Deputy Commissioner of Income-tax, Central Circle 1(3), Ahmedbad committed irregularities as indicated below in the course of passing the reassessment orders for the relevant block period on 04.03.2002 in the case of M/s. Mark Leasing Finance Ltd., Ahmedabad, and Shri Harising Padamsing Champavat, Ahmedabad (i) Shri Ajit Kumar Singh, in flagrant violation of system and procedure, did not procure the approval of the Commissioner of Income Tax, as required under the statutory provisions of section 158 BG of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lack of respect towards his superiors through language and tenor his communication dated 11.04.2002 addressed to the Addl. Commissioner of Income Tax pursuant to Commissioner of Income Tax requisition of Shri Singh s explanation in connection with assessment made in the case of Shri Nitin P.Shah for of A.Y. 1997-98. By his aforesaid acts, Shri Ajit Kumar Singh failed to maintain integrity and devotion to duty and exhibited conduct unbecoming of a Government servant in violation of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS Conduct Rules, 1964. 4. The respondent No.1 submitted his reply to the charge-sheet vide his letter dated November 07, 2008. In the said letter the respondent No.1 had stated that to enable him to prepare a written statement of defence, inspection of all the documents referred to and relied upon in the charge-sheet be given to him. The same was followed by further letters dated January 06, 2009, January 12, 2009 and January 20, 2009. Suffice would it be to state that the requirement under the rules is that a charged officer is required to deny or admit the charge(s) on receipt of the charge-sheet. Be that as it may the Inquiry Officer was appointed on J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 14, 2006 held to be bad. The Tribunal further holds that the scope of judicial review in respect of disciplinary proceedings initiated against officer discharging quasi judicial authority is no more resintegra on the basis of the judgment of the Supreme Court in (2006) 5 SCC 680 Union of India vs. Duli Chand and when the actions of the respondent No.1 have been defended upto the Supreme Court, the petitioners cannot approbate and reprobate simultaneously by alleging misconduct against the respondent No.1 and ultimately the Tribunal held unless the case of respondent No.1 falls in the categories enumerated by the Supreme Court in (1993) 2 SCC 56 Union of India vs. K.K.Dhawan, the disciplinary proceedings are contrary to law and cannot be countenanced. 8. The petitioners being aggrieved with the impugned order dated April 20, 2010 have filed the present petition under Article 226 of the Constitution of India. 9. During the hearing before us the learned counsel for the petitioners would submit that the Tribunal committed an illegality in quashing the charge-sheet issued against respondent No.1 at the very threshold. According to him it is settled law that the Tribunal or Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Ors., (1999) 7 SCC 409 Zunjarrao Bhikaji Nagarkar vs. U.O.I. Ors., (1993) 2 SCC 56 K.K.Dhawan vs. U.O.I, order dated November 24, 2010 passed by this Court in W.P.(C) 5013/2010 UOI Ors. vs. Harsh Vardhan Chauhan, order dated March 20, 2009 in W.P.(C) 7054/2009 UOI Ors. vs. Arindam Lahiri. 12. Written submissions have also been considered by us. 13. The question which falls for our consideration is whether the Tribunal was justified in quashing the charge-sheet at the threshold by holding that the procedure has been curtailed and issue prejudged and further whether charge-sheet could have been issued to the respondent No.1 if the charges relate to the assessment orders passed by him in performing quasi judicial function. 14. We first deal with the first issue. The facts relevant are, the Central Vigilance Commission in its advise dated December 02, 2002 finds no vigilance angle in the matter, however it opined that if any specific instances of official misconduct alleged by the two officers i.e. respondent nos.1 and 2, the same be investigated by the CVO and brought up before the Commission at appropriate stage. The Chairman CBDT gave his approval to refer the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the charges framed are contrary to any law. At this stage, the tribunal has no jurisdiction to go into the correctness or truth of the charges. The tribunal cannot take over the functions of the disciplinary authority. The truth or otherwise of the charges is a matter for the disciplinary authority to go into. Indeed, even after the conclusion of the disciplinary proceedings, if the matter comes to court or tribunal, they have no jurisdiction to look into the truth of the charges or into the correctness of the findings recorded by the disciplinary authority or the appellate authority as the case may be. The function of the court/tribunal is one of judicial review, the parameters of which are repeatedly laid down by this Court. It would be sufficient to quote the decision in H.B. Gandhi, Excise and Taxation Officer-cum- Assessing Authority, Kamal v. Gopi Nath Sons5. The Bench comprising M.N. Venkatachaliah, J. (as he then was) and A.M. Ahmadi, J., affirmed the principle thus : (SCC p. 317, para 8) "Judicial review, it is trite, is not directed against the decision but is confined to the decision-making process. Judicial review cannot extend to the examination of the correctn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed conditions which are essential for the exercise of the statutory powers. (v) If he had acted in order to unduly favour a party. (vi) If he had been actuated by corrupt motive, however, the bribe may be. 18. The Supreme Court has also in the said judgment vide para No.29 has observed as under: Para No.29 The instances above catalogued are not exhaustive. However we may add that for a mere technical violation or merely because the order is wrong and the action not falling under the above enumerated instances disciplinary action is not warranted. Here we may utter a word of caution. Each case will depend upon the facts and no absolute rule can be postulated. 19. In its opinion reported as (1999) 7 SCC 409 Zunjarro Bhikaji Nagarkar vs. Union of India Ors., the Supreme Court has held as under: 40. XXXXXXXXXXXXXXXXX A wrong interpretation of law cannot be a ground for misconduct. Of course it is a different matter altogether if it is deliberate and actuated by mala fides. 41. When penalty is not levied, the assessee certainly benefits but it cannot be said that by not levying penalty, the officer has favoured assessee or shown undue favour to him. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings." 20. In the judgment reported as (2006) 5 SCC 680 Union of India and Ors. vs. Duli Chand, the Supreme Court in para Nos.5 to 9 has held as under: 5. The law on the subject was considered in extenso in the three-Judge Bench decision of Union of India vs. K.K.Dhawan wherein it was noted that the view that no disciplinary action could be initiated against an officer in respect of judicial or quasi-judicial functions was wrong. It was further said that the officer who exercises judicial or quasi-judicial powers acting negligently or recklessly could be proceeded against by way of disciplinary action. The Court listed six instances when such action could be taken: (SCC p.67, para 28) (i) Where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty; (ii) If there is prima facie material to show recklessness or misconduct in the discharging of his duty; (iii) If he has acted in a manner which is unbecoming of a government servant; (iv) If he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers; (v) If he had acted in order to un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and given powers to set aside such orders. The higher courts after hearing the appeal may modify or set aside erroneous judgments of the lower courts. While taking disciplinary action based on judicial orders, High Court must take extra care and caution. XXXXXX 17. In Zunjarrao Bhikaji Nagarkar v. Union of India, (1999) SCC 409, this Court held that wrong exercise of jurisdiction by a quasi judicial authority or mistake of law or wrong interpretation of law cannot be the basis for initiating disciplinary proceeding. Of course, if the Judicial Officer conducted in a manner as would reflect on his reputation or integrity or good faith or there is a prima facie material to show recklessness or misconduct in discharge of his duties or he had acted in a manner to unduly favour a party or had passed an order actuated by corrupt motive, the High Court by virtue of its power under Art. 235 of the Constitution may exercise its supervisory jurisdiction. Nevertheless, under such circumstances it should be kept in mind that the Judges at all levels have to administer justice without fear or favour. Fearlessness and maintenance of judicial independence are very essential for an efficacious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s matter also, there is no reference to the earlier three Judge Bench judgment in Duli Chand s case. However, since Nagarkar s case was found to be contrary to the earlier judgment of the Supreme Court in K.K. Dhawan case wherein the Supreme Court had laid down six instances under which a Government servant discharging quasi-judicial function can be proceeded in a disciplinary action (which have been already extracted). We will have to apply those facts also in the present case. But the subsequent judgment in Ramesh Chander Singh case (cited supra), K.G. Balakrishnan, CJ had referred to Nagarkar s case and quoted it with approval. Ultimately, the decisions will have to be applied depending on the fact situation of each case. 15. Therefore, if the decisions in K.K. Dhawan case, Nagarkar case, Duli Chand case, Ramesh Chander Singh case and Inspector Prem Chand case are read together, it is necessary that before initiating disciplinary action, the Department must have a prima facie material to show recklessness and that the officer had acted negligently or by his order unduly favoured a party and his action was actuated by corrupt motive. In fact, K.G. Balakrishnan, CJ in Ramesh Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparately assessable in Independent proceedings under Section 158 BD of the Income Tax Act. (3) He acting beyond jurisdiction and displaying an attitude of insubordination and confrontation commented on issues on which the CBDT has already issued clarification under VDIS 1997. Defence taken by respondent No.1 Assessment order passed by the respondent No.1 defended before the Income Tax Appellate Tribunal Gujrat High Court Supreme Court The entire draft order discussed and approved with/by the Addl. CIT u/s 144A The legal view is approved by the Department s Standing Counsel No insubordination in quasi-judicial decisions. The only issue is whether the clarification and Member s letter is binding. The Clarification is not binding because unlike section 119 of the IT Act, the VDIS does not have provision enabling the CBDT/ its Member to issue clarification as advised by the Standing Counsel in his opinion. Issue no longer res integra (Hemlathaa Gagya v. CIT (2003) 259 ITR 1 (SC); Member s opinion in reply to a communication from assessee not binding on the assessing officer as held in J.K.Synthetics [1972] 83 ITR 335 (SC); A similar opinion by Sh. Batabayal was held not bindin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osecution u/s 197/198 r.w.s. 477A of IPC, for which an enquiry was directed by Asst. Director (Prosecution). Perverse inference as the letter dated 18.03.2002 not relevant for assessment. This was pertaining to launching of prosecution u/s 197/198 r.w.s. 477A of IPC, for which an enquiry was directed by Asst. Director (Prosecution) On the merits of the Assessment, CIT(A) confirmed two additions of Rs.1.81 Crores and Rs.3.71 Lakhs and deleted two additions of Rs.41.37 Lakhs and Rs.1.73 Crores. The Department filed an appeal before ITAT against the deletions. ITAT confirmed the additions of RS.41.37 Lakhs and remanded the issue of addition of RS.1.73 crores for fresh adjudication. Article V He displayed insubordination and utter lack of respect towards his supervisors through language and tenor of his communication dated 11.04.2002 addressed to the Addl. Commissioner of Income Tax pursuant to Commissioner of Income Tax requisition of Shri Singh explanation in connection with assessment made with case Shri Nitin P.Shah for A4- 1997-98. This, too, is a perverse inference. Letter dated 11.04.2002 is only a request for certain details to enable the respondent to file his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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