TMI Blog2017 (9) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the relevant provisions of Income Tax Act. Merely because the interpretation put by the petitioner may not be acceptable to the department, itself cannot be a matter of departmental enquiry. If such view is accepted, it would be highly impossible for the quasi- judicial authorities to take decisions in the matter, which would severely prejudice the administration. The department has not attributed anywhere corrupt motive or dishonest conduct on the part of the petitioner while deciding the matters. The belated Memorandums of Charge served on the petitioner surely causes prejudice to the petitioner. Gravity of the allegations also do not calls for permitting the department to proceed with the belated charges levelled against the petitioner after 20 years and seven years, respectively. - Writ Petition No. 10119 -10120 of 2015 - - - Dated:- 20-9-2017 - R. M. Borde And A. S. Gadkari, JJ. Mr. P.K. Dhakephalkar, Senior Counsel instructed by Mr. Sandeep V. Marne, advocate for the petitioner Mr. Pradeep S. Jetly Ms. Neeta Masurkar, advocates for the respondents JUDGMENT ( Per R. M. Borde, J. ) 1 The petitioner, an employee of Income Tax Department, is pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1995-96, have been expunged. There were no steps taken during the years 1998 to 2014 and according to the petitioner, when he became eligible for promotion to the post of Principal Commissioner of Income Tax, at the relevant time, Respondent No.1 issued a Memorandum of Charge under Rule 16 of Central Civil Services (Classification, Control and Appeal) Rules, 1965. The charges levelled against the petitioner are in respect of irregularities in assessment orders passed by him in six cases while he was posted as Deputy Commissioner of Income Tax, Nasik, during the year 199495. 5 It is the contention of the petitioner that three cases out of six cases, which were referred to in the Memorandum of Charge, formed basis of recording adverse entries in his ACR and those adverse entries were expunged considering the representation made by the petitioner. The petitioner objects to the maintainability of the Memorandum of Charge on several grounds including delay in issuing the Memorandum of Charge. The petitioner is raising exception to the Memorandum of Charge wherein it has been alleged that the petitioner, while recording assessment in six cases, has contravened the provisions of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The order passed by the petitioner was challenged by the Department by presenting an appeal to the Income Tax Appellate Tribunal, Chennai. In the meantime, the learned Single Judge of the Madras High Court allowed the writ petition filed by the assessee and held that the notices issued by the Assessing Officer for block assessment were illegal. After decision of the learned Single Judge of the Madras High Court, the assessee produced the said order before the ITAT, Chennai. Dealing with the appeal presented by the department and considering the order passed by learned Single Judge of the Madras High Court quashing notices in respect of block assessment, the appellate authority dismissed the appeals presented by the department. The department presented an appeal challenging the order passed by the learned Single Judge of the Madras High Court before the Division Bench of the Madras High Court. Appeal presented by the department came to be allowed and the Division Bench of the Madras High Court, by its judgment and order dated 24.09.2013, quashed the order passed by the learned Single Judge. The department also filed an appeal against the order passed by the ITAT dismissing the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... founded on the interpretation of provisions of Income Tax Act, which are amenable to different interpretations. In the Memorandum of Charge, it is alleged that the petitioner has not maintained devotion to the duty while issuing assessment orders in six cases. The assessment orders were recorded in the year 1992-93 and 1993-94, which cannot be a matter of departmental enquiry and petitioner cannot be charged after lapse of about twenty years. 12 So far as second Memorandum of Charge is concerned, it relates to the orders passed by the petitioner in his capacity as Commissioner of Income Tax (Appeals) relating to assessee Mr.Rakesh Sarin. The charge is not sustainable on the ground of delay. The petitioner decided the appeals in the year 2007, whereas, charge sheet has been issued almost after seven years i.e. in the year 2014. One of the objection raised by the department is in respect of jurisdiction of the petitioner to decide the appeals. It must be taken note of that though the department challenged the orders passed by the petitioner by presenting an appeal to the Income Tax Appellate Tribunal, there was no ground raised at the relevant time in respect of lack of jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the correctness of the judgment cannot be a matter of inquiry in the departmental proceedings. Similarly, in article of charge no. (III) (i) and (ii) , the order passed by the petitioner in his quasi judicial capacity has been criticised and he has been called upon to explain in respect of alleged error in allowing appeals of the assessee. Similar is the charge contained in articles IV and V. The petitioner, as such, contends that the correctness of the decision rendered by the quasi judicial authority cannot be a matter of inquiry in the departmental proceedings. If, at all, there are issues touching integrity of an officer or any allegation relating to mala fide or unless there is imputation questioning bona fide of the officer while dealing with the matters in his quasijudicial capacity, the decisions cannot be a matter of inquiry and the reasonableness or correctness of the conclusion in the absence of any allegation of mala fide or corrupt motive cannot form a basis of inquiry. 15 The petitioner also contends that the reasons set out by the petitioner while deciding the appeals in his quasijudicial capacity, cannot be questioned in departmental proceedings and the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of the Madras High Court was quashed by the Division Bench of the Madras High Court while entertaining an appeal presented by the Income Tax Department. 17 The fact remains that the decision rendered by the petitioner has been upheld by the judicial forum. Even the appeals presented against the orders passed by the petitioner were disposed of in view of quashing of the block assessment notices and ultimately, the Division Bench of the Madras High Court directed the matters to be remitted back. There may be two different views on interpretation of a particular provision of law or as regards interpretation of the precedence. However, some view taken by the deciding authority, which is not to the satisfaction of the department, cannot form basis for proceeding departmentally against the quasijudicial authority. If such logic is applied and is accepted as a correct proposition, it would be difficult for the judicial forums to render decisions in the matter, which may lead to disastrous consequences. The delay in taking cognizance of the alleged acts of misconduct or lack of devotion to the duty, itself is a ground for quashing the charges. 18 The petitioner, in order to substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The irregularities which were the subject matter of the enquiry is said to have taken place between the years 197577. It is not the case of the department that they were not aware of the said irregularities, if any, and came to know it only in 1987. According to them even in April 1977 there was doubt about the involvement of the officer in the said irregularities and the investigations were going on since then. If that is so, it is unreasonable to think that they would have taken more than 12 years to initiate the disciplinary proceedings as stated by the Tribunal. There is no satisfactory explanation for the inordinate delay in issuing the charge memo and we are also of the view that it will be unfair to permit the departmental enquiry to be proceeded with at this stage. In any case there are no grounds to interfere with the Tribunal's orders and accordingly we dismiss this appeal. The Hon'ble Supreme Court, thus, refused to cause interference in the order of the Tribunal directing quashing of the departmental proceedings on account of inordinate delay. 21 In the matter of P.V. Mahadevan Vs. Md. T.N. Housing Board, (supra), certain disciplinary actions were taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent employee on 12.11.1987 under Rule 19 of the Andhra Pradesh Civil Services Rules, 1963. There was no explanation for delay. On 31.07.1995, another charge memo came to be issued. Even in the new charge memo, there was no explanation for delay. During pendency of second memo, Respondent became due for consideration for promotion for which DPER meeting was held on 16.08.1995. Two more charge memos dated 27.10.1995 and 01.06.1996 were issued to the Respondent. The respondent approached the Administrative Tribunal seeking to quash the charges and issuance of directions for promoting the employee. The Administrative Tribunal quashed the memo dated 31.07.1995 and issued a direction that Respondentemployee be promoted on the basis of recommendations of DPC ignoring subsequent memos dated 27.10.1995 and 01.06.1996. The decision of the Tribunal was a matter of challenge in the petition presented by the State of Andhra Pradesh before the Hon'ble Supreme Court. The Hon'ble Supreme Court referred to its earlier judgments and while considering the argument in respect of delay in issuing charges, the Supreme Court has observed: 19 It is not possible to lay down any predeter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adverse remarks against two columns were maintained. The petitioner tendered an appeal to the Honourable President of India aggrieved by retention of adverse remarks in two columns, in the year 1998. It was communicated to the petitioner on 30.10.1998 that the competent authority has expunged two adverse entries in column 20 of PartIII and column 3 of PartV recorded in the ACR of 1995. 24 It must be noted that the issue relating to six cases was taken up after lapse of about 20 years and Memorandum of Charge came to be issued on 14.03.2014. The objection raised by the department in respect of three cases stands overruled since adverse entries in the ACR, recorded on the basis of scrutiny of three cases, were directed to be expunged. In respect of three cases dealt with by the petitioner, the charge is framed relating to want of devotion to the duties, after lapse of 20 years. There is no reasonable explanation for the delay caused. It is only stated that the matter was pending for consideration at various levels of the department and as such, there was delay. Considering the ratio laid down by the Honourable Surpeme Court in the matter of M.V. Bijalini, Bani Singh, P.V. Mahadeva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi, by an order dated 25.09.2006. The petitioner contended that what was diverted was the post of CIT and not the charge having workload of appeals. It is contended that there were about 55 matters dealt with by the petitioner relating to additional charge. He sought clarification on receipt of Notification No. 12/2006 dated 07.12.2006 and corrigendum dated 14.12.2006 pointing out that specially assigned cases were still pending with him. The notification dated 07.12.2006 and corrigendum dated 14.12.2006 were silent about specially assigned appeals of Central charge in CITAX. The deficiency was realised thereafter and the notification and corrigendum were amended on 11.01.2007 thereby including specially assigned appeals of the central charge. According to the petitioner, finding recorded by the Tribunal, that the petitioner was not invested with the jurisdiction beyond 25.09.2006 to deal with the appeals, is erroneous. It must be noted at this stage that after decision rendered by petitioner in the case of Mr. Rakesh Sarin, the department has challenged the decision by preferring an appeal to Income Tax Appellate Tribunal (ITAT). However, surprisingly, the objection relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng against an officer performing quasijudicial functions; and that the Government is not precluded from taking disciplinary action for violation of Conduct Rules even with regard to exercise of quashjudicial powers. Thus, the disciplinary action can be taken in cases : 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 discharge 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 unduly favour a party; vi) if he had been actuated by corrupt motive however small the bribe may be. 31 The Court further proceeds to record that the instances above catalogued are not exhaustive. However, it may be added 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. 32 The Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner under the Act in addition to his duties as the First Member of the Board of Revenue. In our opinion, it is not necessary that a member of the Service should have committed the alleged act of omission in the course of discharge of his duties as a servant of the Government in order that it may form the subjectmatter of disciplinary proceedings. In other words, if the act or omission is such as to reflect on the reputation of the officer for his integrity or good faith or devotion to duty, there is no reason why disciplinary proceedings should not be taken against him for that act or omission even though the act or omission relates to an activity in regard to which there is no actual master and servant relationship. To put it differently, the test is not whether the act or omission was committed by the appellant in the course of the discharge of his duties as servant of the Government. The test is whether the act or omission has some reasonable connection with nature and condition of his service or whether the act or omission has cast any reflection upon the reputation of the member of the Service for integrity or devotion to duty as a public servant. We are of the opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter disregard of the relevant provisions of S. 29 and the Rules thereunder in sanctioning the leases. On behalf of the respondents it was argued both by Mr. Sarjoo Prasad and Mr. Bindra that the Commissioner was not discharging quasijudicial functions in sanctioning leases under S.29 of the Act, but we shall proceed on the assumption that the Commissioner was performing quasijudicial functions in granting leases under S.29 of the Act. Even upon that assumption we are satisfied that the Government was entitled to institute disciplina4y proceedings if there was prima facie material for showing recklessness or misconduct o n the part of the appellant in the discharge of his official duty. It is true that if the provisions of S.29 of the Act or the Rules are disregarded the order of the Commissioner is illegal and such an order could be questioned in appeal under S.29(4) or in revision under S.99 of the Act. But in the present proceedings what is sought to be challenged is not the correctness or the legality of the decision of the Commissioner but the conduct of the appellant in the discharge of his duties as Commissioner. The appellant was proceeded against because in the discharge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner is erroneous and reliance placed by him on certain reported judgments is incorrect. The orders passed by the petitioner can be impeached in an appeal on various grounds including that the reliance placed by him on certain judgment is erroneous or that interpretation put by the officer in respect of certain provisions or in respect of certain precedences is incorrect. However, that itself does not reflect corrupt motive or would not amount to misconduct in discharge of official functions or would reflect lack of devotion to the duty. The provisions of law or certain precedences may be amenable to different interpretations. Merely because the deciding authority adopts an interpretation which is not approved by the department, does not itself give rise to any cause to proceed departmentally against the officer exercising quasijudicial functions. 35 So far as aspect of delay in proceeding against the petitioner is concerned, there is no proper explanation forthcoming. In respect of the Memorandum of Charge served on the petitioner, which is subject matter of Writ Petition no. 10119/2015, there is inordinate delay of 20 years in serving the charges. Whereas, in respect of the Mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded at the relevant time, were expunged on consideration of representation / appeal by the petitioner. It is, thus, prima facie clear that the charges were not substantiated and as such, adverse remarks were expunged. So far as other three cases are concerned, the allegation is in respect of lack of devotion to the duty. There is no allegation of corrupt motive or corrupt practice attributed to the petitioner in any of the Memorandums of Charge. So far as second Memorandum of Charge, which has been served after delay of about seven years, is concerned, the department for the first time, raised a contention in respect of lack of jurisdiction invested with the petitioner for deciding the cases. Though the department presented appeals challenging the appellate orders passed by the petitioner, such contention was never raised before any forum. The contention raised by the department, in that regard, is also questionable. The decisions rendered by the petitioner on merit in the matter of Mr. Rakesh Sarin are questioned referring to the interpretation put by the petitioner to certain precedences / case law and the interpretation of the relevant provisions of Income Tax Act. Merely becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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