Bombay High Court
Shri. Nai Pal Singh vs Union Of India Through The ... on 20 September, 2017
Bench: R.M. Borde
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IN THE HIGH COURT OF JUDICATURE OF BOMBAY
APPELLATE SIDE CIVIL JURISDICTION
WRIT PETITION NO. 10119 OF 2015
Shri Nai Pal Singh
Age 56 years,
workinga as Commissioner of Income Tax
Departmental Representative (ITAT)-2,
Residing at 102, Ritika Apartments,
9th Gulmohar Cross Road,
JVPD Scheme,
Mumbai 400 049. Petitioner
Versus
1. Union of India
Through the Secretary (Revenue)
Ministry of Finance
Department of Revenue
North Block,
New Delhi 110 001.
2. The Chairman,
Central Board of Direct Taxes,
North Block,
New Delhi 110 001. Respondents
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
respondents.
WITH
WRIT PETITION NO. 10120 OF 2015
Shri Nai Pal Singh
Age 56 years,
workinga as Commissioner of Income Tax
Departmental Representative (ITAT)-2,
Residing at 102, Ritika Apartments,
9th Gulmohar Cross Road,
JVPD Scheme,
Mumbai 400 049. Petitioner
::: Uploaded on - 21/09/2017 ::: Downloaded on - 22/09/2017 01:41:22 :::
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Versus
1. Union of India
Through the Secretary (Revenue)
Ministry of Finance
Department of Revenue
North Block,
New Delhi 110 001.
2. The Chairman,
Central Board of Direct Taxes,
North Block,
New Delhi 110 001. Respondents
Mr. P.K. Dhakephalkar, Senior Counsel i/by Mr. Sandeep V. Marne,
advocate for the petitioner.
Mr. Pradeep S. Jetly & Ms. Neeta Masurkar, advocates for
respondents.
CORAM : R.M.BORDE AND
A.S. GADKARI, JJ.
RESERVED ON : 12th JANUARY, 2017
PRONOUNCED ON : 20th SEPTEMBER, 2017
JUDGMENT : ( Per R.M. Borde, J.)
1 The petitioner, an employee of Income Tax Department,
is praying for issuance of writ of certiorari or any other writ, order
or certiorari in the nature of writ of certiorari for quashing the
order dared 16th July, 2015, passed by the Central Administrative,
Mumbai in Original Application No.284 of 2014 along with
Memorandum of Charge Sheet dated 14.03.2014; and is also
claiming all consequential benefits. The petitioner is also
objecting to the order passed by the Central Administrative
Tribunal, Mumbai in identical matter bearing Original Application
No.285 of 2014, decided on 16th July, 2015 along with
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Memorandum of Charge Sheet of the same date i.e. 14.03.2014;
and is also praying for grant of all consequential benefits.
2 Petitioner belongs to 1983 batch of Indian Revenue
Service and is currently holding the post of Commissioner of
Income Tax. Between the years 1994 and 1996, petitioner was
posted as Deputy Commissioner of Income Tax, Special Range-3
and Special Range-1, Nasik. He passed several assessment orders
relating to assessment years 1992-93 and 1993-94. The CIT
randomly selected 100 cases wherein orders were passed by the
petitioner for regular inspection. The cases taken up by the
Commissioner of Income Tax for regular inspection are different
from the cases taken up for vigilance inspection. On the basis of
inspection in six cases, the Commissioner of Income Tax recorded
adverse entries in the ACR of the petitioner for the year 1995-96
and awarded grading "inadequate". The adverse entries in the
Confidential Records of the petitioner, during the year 1995-96
were communicated to him by the Chief Commissioner of Income
Tax, Pune.
3 The petitioner made representation seeking expunction
of adverse entries in the ACR and for upgradation of the same.
The representation tendered by the petitioner was considered
favourably and the competent authority i.e. Member, Central Board
of Direct Taxes, issued directions expunging adverse remarks in
four columns out of six columns in the ACR for the year 1995-96
and maintained adverse entries against two columns.
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4 The petitioner, being aggrieved by the order of retention
of adverse entries in two columns, tendered a representation to the
Hon'ble President of India on 18.06.1998. It was communicated to
the petitioner on 30.10.1998 by the Union of India that the adverse
entries made in column 20 of Part-III and Column 3 of Part V,
recorded in the ACR for the 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 1994-95.
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 Rule
3(1)(ii) of Central Civil Services (Conduct) Rules, 1964. The
aforesaid Memorandum of Charge is subject matter of Writ Petition
No.10119 of 2015.
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6 Another charge sheet issued on the same day i.e.
14.03.2014 forms subject matter of Writ Petition no.10120 of 2015.
The charge in the second charge sheet is in respect of violation of
Rule 3(1)(i), (ii) and (iii) of Central Civil Services (Conduct) Rules
1964.
7 The petitioner was posted as Commissioner of Income
Tax (Appeals)-IV, Chennai and was also entrusted with the
additional charge of Commissioner of Income Tax (Appeals)-X,
Chennai, by an order dated 24.07.2006 by the Chief Commissioner
of Income-Tax, Chennai. The additional charge of the post of
Commissioner of Income Tax (Appeals)-X comprises, in addition to
the regular charge as Commissioner Income Tax (Appeals),IV,
Chennai, whereunder certain assigned appeals were entrusted in
view of Notification bearing No.8 of 2005 dated 02.12.2005 by Chief
Commissioner of Income Tax, Chennai. The Central Board of
Direct Taxes wanted to create additional post of CIT, Delhi and as
such, diverted the post of Commissioner of Income Tax (Appeals)-X,
Chennai to Delhi and re-designated it as CIT, DPER, Delhi, by an
order dated 25.09.2006.
8 It is the contention of the petitioner that on diversion
of the post of CIT (A)-X, Chennai, Chief Commissioner of Income
Tax, Chennai failed to pass order for transfer of cases from the
petitioner. Initially the order was passed for transfer of only
territorial cases relating to Chennai and later, by specific order, the
Central charge cases pertaining to CIT (A)-X, Chennai, were
retained with the petitioner. In the year 2007, an assessee by
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name Mr.Rakesh Sarin had presented appeal raising challenge to
the block assessment order. The assessee also presented writ
petition before the learned Single Judge of the Madras High Court
challenging notices for block assessment issued by the Assessing
Officer. In the writ petition, an interim order was passed by the
learned Single Judge of the Madras High Court directing that the
proceedings in the appeal pending before the petitioner may go on,
but the order passed by the petitioner should not be given effect to.
Since there was no impediment in deciding the appeals, according
to the petitioner, he decided the same and directed the Assessing
Officer not to enforce demand against the assessee. 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
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against the order passed by the ITAT dismissing the appeal
presented by the department before the Madras High Court, which
was also allowed and the matters were remitted back to the
Tribunal for decision on merit.
9 In the meanwhile, by notice dated 05.06.2012, the
Directorate of Income Tax (Vigilance), Chennai, called upon the
petitioner to submit his explanation in respect of disposal of
appeals by him in his capacity as Commissioner of Income Tax
(Appeals). The petitioner requested for supply of certain
documents which were not supplied nor he was permitted
inspection of appeal record. On 14.03.2014, memorandum of
charge sheet came to be issued against the petitioner alleging
various deficiencies in the order passed by him on 04.01.2007
while disposing of appeal presented by Mr.Rakesh Sarin. The
petitioner presented reply to the charge sheet questioning its
maintainability. The petitioner also objected to the charge sheet by
presenting Original Application No.285 of 2014. The learned
Tribunal, by an order dated 16.07.2015, was pleased to dismiss
both the Original Applications presented by the petitioner objecting
to two different Memorandums of Charge served upon him by the
department.
10 The petitioner has objected to the Memorandums of
Charge in both the matters mainly on the ground of delay in
issuing the Memorandums of Charge. So far as first Memorandum
of Charge, forming subject matter of Writ Petition No.10119 of 2015
is concerned, it refers to the assessment years 1992-93 and 1993-
94, whereas, the charge sheet has been served in the year 2014
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almost after twenty years from the date of passing of the
assessment orders by the petitioner. In the years 1992-93 and
1993-94, the petitioner was functioning as Deputy Commissioner
of Income Tax and thereafter in due course, he earned promotion
as a Commissioner of Income Tax and while further promotion to
the post of Principal Commissioner of Income Tax was within
contemplation, instant Memorandums of Charge have been served
upon the petitioner.
11 It is contended by the petitioner that out of six cases
referred to in the charge sheet, three cases were subject matter of
recording of adverse entries in the ACR. The petitioner objected to
the adverse entries in the ACR recorded by the superiors and the
objection of the petitioner was upheld and the adverse entries were
directed to be expunged. So far as remaining three cases are
concerned, the charge is 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,
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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 jurisdiction. Such a ground is
raised only while issuing Memorandum of Charge to the petitioner.
The orders passed by the petitioner, in his capacity as
Commissioner of Income Tax (Appeals) were maintained by the
appellate forum and ultimately the learned Single Judge of the
Madras High Court proceeded to quash the notice relating to block
assessment itself, which order was later on reversed while
considering the appeal presented by the department and the
matters were remitted back.
13 It is the contention of the petitioner that the decision
rendered by him in his quasi judicial capacity, while rendering
decision in appeals presented against the order passed by lower
authorities, cannot be a matter of scrutiny in departmental
proceedings. The correctness or otherwise of the decisions
rendered by the petitioner in his capacity as CIT (Appeals) is liable
to be gone into and corrected by the appellate forum. The
decisions rendered by the petitioner while functioning in quasi
judicial capacity cannot be analysed and commented upon in
departmental proceedings and any error even if assuming it exists,
cannot be taken as an act lacking maintenance of absolute
integrity and devotion to duty or misconduct leading to a
conclusion of contravention of provisions of Rule 3(1)(i), (ii) and (iii)
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of CCS (Conduct) Rules, 1964.
14 Perusal of the charges levelled against the petitioner in
the second charge sheet indicates that the orders passed by the
petitioner in the case of Mr.Rakesh Sarin itself is a matter of
inquiry and articles of charge served on the petitioner assailing the
correctness of the judgments delivered by the petitioner, are in fact
liable to be assailed before the appellate forum. In article of
Charge No.V, the petitioner has been called upon to explain as
regards orders passed for block assessment period 1997-98, 2002-
2003 and part of 2003-2004 and it has been asserted that he has
committed an error in holding that the block assessment is barred
by law relying on the case law in the matter of Dr. C.Balakrishna
Nair Vs. CIT, 237 ITR 71 (Kerala) and CIT Vs Ms. Sandhya P. Nayak,
253 ITR 534 (Bombay). It is further recorded that reliance placed
by the petitioner for drawing conclusion in the aforesaid matters is
wrong for the reason that the facts of the reported cases are
distinguishable and not applicable to the facts of the case of the
assessee. Any objection to 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
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questioning bona fide of the officer while dealing with the matters
in his quasi-judicial 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 quasi-judicial
capacity, cannot be questioned in departmental proceedings and
the decision rendered by him while exercising quasi-judicial
functions also cannot be a matter of inquiry. The department has
not alleged any mala fide intention or corrupt motive against the
petitioner while recording decision in the appeals. While recording
decision in the appeal, the petitioner has misinterpreted the order
passed by the learned Single Judge granting "liberty" to the
deciding authority to deal with the appeals by treating it as a
"direction". The misconception of the petitioner to treat the
"liberty" granted by the High Court as a direction cannot form the
basis of the charge sheet. The fact, however, remains that the
appellate authority was granted liberty by the learned Single
Judge of the Madras High Court to decide the appeals and the
petitioner, while availing the liberty, has dealt with the matter and
decided the same. That itself cannot be treated as violation of the
directions of the learned Single Judge of the Madras High Court.
The petitioner was issued a minor penalty charge sheet alleging
misconduct committed by him while functioning as Commissioner
of Income Tax during the year 1994-95 and 1995-96 and at the
same time, instant Memorandum of Charge came to be issued
alleging misconduct while functioning as Commissioner of Income
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Tax, Chennai, during the year 2006-2007. Both the
Memorandums of Charge issued to the petitioner while his
promotion was within contemplation, according to the petitioner,
were issued only to divest him of the benefits of the promotion.
The Tribunal has not considered these aspects in proper
perspective and has arrived at wrong conclusions.
16 It is the contention of the petitioner that so far as first
charge sheet served on him relating to six cases of the year 1992-
93 and 1993-94 is concerned, departmental proceedings cannot
proceed and the petitioner cannot be charged belatedly after
twenty years of accrual of alleged cause. Similarly, in respect of
second charge sheet, the decisions rendered by the petitioner, in
his quasi-judicial capacity, were declared during the year 2007,
whereas, charge sheet has been presented in the year 2014 after
lapse of 7 years. The charges are not sustainable even on merits
considering the fact that the notice of block assessment which
forms the basis of the decision itself were quashed by the learned
Single Judge of the Madras High Court though decision of the
learned Single Judge 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
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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 quasi-judicial 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 substantiate his contention
that delay in initiating the disciplinary proceedings causes
prejudice to the employee and that itself is a ground for quashing
of the charges, places reliance on the judgment in the matter of
M.V.Bijlani Vs. Union of India & others, (2006) 5 SCC 88; and
State of Madhya Pradesh Vs. Bani Singh and another, 1990
(supp.) SCC 738, P.V.Mahadevan Vs. M.D., Tamil Nadu Housing
Board, (2005) 6 SCC 636, and State of Andhra Pradesh Vs. M.
Radhakishan, reported in (1998) 4 SCC 154.
19 In the matter of Bani Singh, there was a delay of six
years in initiating departmental proceedings and the proceedings
continued for a period of seven years. The Tribunal as well as the
High Court failed to consider the aspect of delay of six years in
initiating proceedings and refused to grant relief in favour of the
petitioner. While dealing with the matter, the Supreme Court
observed in paragraph 16 of the judgment, thus:
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"...... The Tribunal as also the High Court failed
to take into consideration that the disciplinary
proceedings were initiated after six years and
they continued for a period of seven years and,
thus, initiation of the departmental proceedings
as also discontinuance thereof after such a long
time evidently prejudiced the delinquent
officer."
20 The Hon'ble Supreme Court, while deciding the matter
of Bijlani, has also referred to its earlier decision in the matter of
Bani Singh (supra). In the case of Bani Singh, challenge was
raised in respect of initiation of departmental inquiry proceedings
and issuance of charge sheet in the year 1987 in respect of certain
incidence that took place in 1975-76. The Tribunal quashed the
Memorandum of Charge and departmental proceedings on the
ground of inordinate delay of 12 years in initiation of departmental
enquiry with reference to an incidence that took place in 1975-76.
The Hon'ble Supreme Court, while dealing with the appeal
presented by the State of Madhya Pradesh, challenging the
judgment of the Tribunal, observed in para 4 of the judgment, as
quoted below:
"4 The appeal against the order dated
December 16, 1987 has been filed on the
ground that the Tribunal should not have
quashed the proceedings merely on the
ground of delay and laches and should have
allowed the enquiry to go on to decide the
matter on merits. We are unable to agree
with this contention of the learned counsel.
The irregularities which were the subject
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matter of the enquiry is said to have taken
place between the years 1975-77. 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
against the appellant before the Hon'ble Supreme Court, who was
working as Superintending Engineer in Tamil Nadu Housing
Board. The charge memo was issued against him in the year 2004
in respect of the incidence took place in 1990. The appellant
preferred writ petition seeking to quash the charge memo.
However, the High Court refused to entertain the request of the
appellant and as such, he preferred an appeal to the Hon'ble
Supreme Court. The Hon'ble Supreme Court, while considering
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the objection raised by appellant in respect of desirability of
departmental enquiry initiated belatedly, has referred to the
judgment in the matter of Bani Singh as well as in the case of N.
Radhakishan. While concluding, the Apex Court has observed
that the appellant before the Hon'ble Supreme Court is entitled to
succeed and he need not be put to sufferance for the mistake
committed by the department in initiating disciplinary proceedings
belatedly. In paragraph no.11 of the judgment, the Hon'ble
Supreme Court has observed thus:
11 Under the circumstances, we are of the
opinion that allowing the respondent to
proceed further with the departmental
proceedings at this distance of time will be
very prejudicial to the appellant. Keeping a
higher government official under charges of
corruption and disputed integrity would cause
unbearable mental agony and distress to the
officer concerned. The protracted disciplinary
enquiry against a government employee
should, therefore, be avoided not only in the
interests of the government employee but in
public interest and also in the interests of
inspiring confidence in the minds of the
government employees. At this stage, it is
necessary to draw the curtain and to put an
end to the enquiry. The appellant had already
suffered enough and more on account of the
disciplinary proceedings. As a matter of fact,
the mental agony and sufferings of the
appellant due to the protracted disciplinary
proceedings would be much more than the
punishment. For the mistakes committed by
the department in the procedure for initiating
the disciplinary proceedings, the appellant
should not be made to suffer.
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22 In the case of State of A.P. Vs. N. Radhakishan,
(1998) 4 Supreme Court Cases 154 Respondent before the Hon'ble
Supreme Court was functioning as City Planner in the Municipal
Corporation. The charge memo was issued to the 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 Respondent-employee 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
predetermined principles applicable to all
cases and in all situations where there is delay
in concluding the disciplinary proceedings.
Whether on that ground the disciplinary
proceedings are to be terminated each case
has to be examined on the facts and
circumstances in that case. The essence of
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the matter is that the court has to take into
consideration all the relevant factors and to
balance and weigh them to determine if it is in
the interest of clean and honest
administration that the disciplinary
proceedings should be allowed to terminate
after delay particularly when the delay is
abnormal and there is no explanation for the
delay. The delinquent employee has a right
that disciplinary proceedings against him are
concluded expeditiously and he is not made to
undergo mental agony and also monetary loss
when these are unnecessarily prolonged
without any fault on his part in delaying the
proceedings. In considering whether delay
has vitiated the disciplinary proceedings the
court has to consider the nature of charge, its
complexity and on what account the delay has
occurred. If the delay is unexplained
prejudice to the delinquent employee is writ
large on the face of it. It could also be seen as
to how much the disciplinary authority is
serious in pursuing the charges against its
employee. It is the basic principle of
administrative justice that an officer entrusted
with a particular job has to perform his duties
honestly, efficiently and in accordance with
the rules. If he deviates from this path he is
to suffer a penalty prescribed. Normally,
disciplinary proceedings should be allowed to
take their course as per relevant rules but
then delay defeats justice. Delay causes
prejudice to the charged officer unless it can
be shown that he is to blame for the delay or
when there is proper explanation for the delay
in conducting the disciplinary proceedings.
Ultimately, the court is to balance these two
diverse considerations.
23 The charge-sheet issued by the department on 14.03.2014,
which is subject matter of Writ Petition No. 10119/2015, relates to
six cases of the assessment year 1992-1993 and 1993-1994. The
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three cases, out of six, were considered for recording adverse
entries in the ACR of the petitioner during the year 1996. The
adverse entries recorded against the petitioner in four out of six
columns of the ACR of 1995-1996, were directed to be expunged
and 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 Part-III and column 3 of Part-V 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. Mahadevan and N. Radhakishan, the
objection raised by petitioner, in respect of causing delay in
framing the charges, needs to be accepted and charges levelled
against him needs to be quashed.
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25 In respect of memorandum of charge, which is subject
of challenge in Writ Petition no. 10120/2015, memorandum of
charge has been issued on 14.03.2014 in respect of the decisions
rendered by the petitioner in his capacity as Commissioner of
Income Tax (Appeals) in the years 2006 and 2007.
26 The petitioner dealt with six cases while functioning as
Deputy Commissioner of Income Tax in respect of which
Memorandum of Charge has been framed after lapse of 20 years.
It must be noted that during this intervening period, petitioner was
awarded promotion to the post of Commissioner of Income Tax and
continued in the said post since many years and is now due for
promotion to the post of Principal Commissioner of Income Tax.
The alleged irregularity in dealing with the cases while he was
functioning as Deputy Commissioner of Income Tax did not cause
bar in awarding him promotion. It is surprising as to how
proceedings in respect of said lapse, which is tried to be excavated
after gap of 20 years, can be permitted to continue. The initiation
and pendency of the proceedings has a potential of causing
irreparable damage to the future prospectus of the petitioner since
he is within consideration zone for promotion to the post of
Principal Commissioner of Income Tax.
27 The appeals arising out of block assessment notices
issued to one Mr. Rakesh Sarin were decided by the petitioner. It is
the contention of the department that the petitioner was not
invested with the jurisdiction to decide the matters since he was
divested of the charge. The petitioner was holding substantive
charge of Commissioner of Income Tax (Appeals) - IV and was given
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additional charge of Commissioner of Income Tax (Appeals) - X by
an order dated 24.07.2006 by the Chief Commissioner, Income Tax,
Chennai-I. The charge of Commissioner of Income Tax-A-X had
regular territorial jurisdiction of cases as well as certain specially
assigned appeals relating to central charge. Prior to conferment of
additional charge, there were 115 cases with the petitioner. Since
the Central Board of Direct Taxes wanted to create an additional
post of CIT Delhi, it diverted the post of CIT-A-X, Chennai and re-
designated it as DIT (BPR), 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 CIT-A-X. 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 jurisdiction was not raised in the
memorandum of appeal.
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28 It would be erroneous to charge the officer of having
entertained the appeals exceeding the jurisdiction after seven years
of the decision in an appeal, without raising said issue by the
department in the appeal preferred against the order.
29 The contention of the department in respect of
violation of the order of the Madras High Court is also erroneous.
The Madras High Court passed an interim order on 05.08.2005
directing that, an appeal against the assessment order passed by
the assessing officer is stated to be pending before the appellate
authority. The appeal proceedings may go on. Thus, there was no
prohibition for continuing with the appeal proceeding. It was,
however, an error on the part of petitioner to record in the order
that the Madras High Court directed him to decide the appeal
without waiting for decision in the appeal. However, entertaining
such an erroneous impression to treat the "liberty" granted by the
High Court as a "direction" cannot be a matter of departmental
proceedings against the petitioner. Assuming for sake of argument,
that the petitioner has erroneously used the word "direction"
instead of "liberty", it is merely an erroneous understanding which
may reflect on the judicial capabilities or incorrect use of English
language. However, it cannot be construed as violation of the
interim order passed by the Madras High Court. The orders
passed by the petitioner, in his quasi-judicial capacity, without
there being attribution of mala fide or corrupt motive, cannot be a
matter of enquiry.
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30 Learned Counsel appearing for the Respondent-Union
of India, relying upon the decisions of the Hon'ble Supreme Court
in the matter of Union of India and another Vs. Kunisetty
Satyanarayana, reported in (2006) 12 SCC 28, contended that
firstly writ jurisdiction is a discretionary jurisdiction and hence,
such discretion under Article 226 of the Constitution of India
should not ordinarily be exercised by quashing a notice of charge-
sheet. It is further observed in the judgment that in some very
rare and exceptional cases the High Court can quash the notice or
charge-sheet, if it is illegal. It is further contended, relying upon
the judgment of the Hon'ble Supreme Court in the matter of Union
of India and others Vs. K.K.Dhawan, in AIR 1993 SC 1478, there
is no bar for proceeding against an officer performing quasi-judicial
functions; and that the Government is not precluded from taking
disciplinary action for violation of Conduct Rules even with regard
to exercise of quash-judicial 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;
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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'ble Supreme Court in the matter of K.K.
Dhawan, referred to its earlier decision in the matter of Govinda
Menon Vs. Union of India, AIR 1967 SC 1274. The contention
raised in the matter of Govinda Menon was that no disciplinary
proceedings could be taken against the appellant therein for acts
or omissions with regard to his work as Commissioner under
Madras Hindu Religious and Charitable Endowments Act, 1951.
Since the orders made by him were quasi-judicial in character,
they should be challenged only as provided for under the Act.
Rejecting the contention, the Hon'ble Supreme Court has observed
thus :
"It is not disputed that the appropriate
Government has power to take disciplinary
proceedings against the appellant and that he
could be removed from service by an order of
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the Central Government, but it was contended
that I.A.S. Officers are governed by statutory
rules, that 'any act or omission' referred to in
Rule 4(i) relates only to an act or omission of
an officer when serving under the
Government, and that serving under the
Government means subject to the
administrative control of the Government and
disciplinary proceedings cannot, therefore, be
instituted against the appellant in respect of
an act or omission committed by him in the
course of his employment as Commissioner. e
are unable to accept the preposition
contended for by the appellant as correct.
Rule 4(i) does not impose any limitation or
qualification as to the nature of the act or
omission in respect of which disciplinary
proceedings can be instituted. Rule 4(1)(b)
merely says that the appropriate Government
competent to institute disciplinary proceedings
against a member of the Service would be the
Government under whom such member was
serving at the time of commission of such act
or omission. It doe snot say that the act or
omission must have been committed in the
discharge of his duty or in the course of his
employment as a Government servant. It is,
therefore, open to the Government to take
disciplinary proceedings against the appellant
in respect of his acts or omissions which cast
a reflection upon his reputation for integrity or
good faith or devotion to duty as a member of
the service. It is not disputed that the
appellant was, at the time of alleged
misconduct, employed as the First Member of
the Board of Revenue and he was at the same
time performing the duties of 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 subject-matter of
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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 opinion that even if the
appellant was not subject to the
administrative control of the Government
when he was functioning as Commissioner
under the act and was not the servant of the
Government subject to its orders at the
relevant time, his act or omission as
Commissioner could form the subject-matter
of disciplinary proceedings provided the act or
omission would reflect upon his reputation for
integrity or devotion to duty as a member of
the service. " In this context reference may be
made to the following observations of Lopes,
C.J. in Pearce v. Foster, (1866) 17 QBD 536, p.
"If a servant conducts himself in a way
inconsistent with the faithful discharge of his
duty in the service, it is misconduct which
justifies immediate dismissal. That
misconduct, according to my view, need not be
misconduct in the carrying on of the service of
the business. It is sufficient if it is conduct
which is prejudicial or is likely to be
prejudicial to the interests or to the reputation
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of the master, and the master will be justified,
not only if he discovers it at the time, but also
if he discovers it afterwards, in dismissing
that servant."
It is further observed thus :
"We next proceed to examine the
contention of the appellant that the
Commissioner was exercising a quasi-judicial
function in sanctioning the leases under the
Act and his orders, therefore, could not be
questioned except in accordance with the
provisions of the Act. The proposition put
forward was that quasi-judicial orders, unless
vacated under the provisions of the Act, are
final and binding and cannot be questioned by
the executive Government through
disciplinary proceedings. It was argued that
an appeal is provided under S. 29(4) of the Act
against the order of the Commissioner
granting sanction to a lease and that it is open
to any party aggrieved to file such an appeal
and question the legality or correctness of the
order of the Commissioner and that the
Government also may in revision under S.99
of the Act examine the correctness or legality
of the order. It was said that so long as these
methods were not adopted the Government
could not institute disciplinary proceedings
and re-examining the legality of the order of
the Commissioner granting sanction to the
leases."
It is further observed thus :
"The charge is, therefore, one of
misconduct and recklessness disclosed by the
utter disregard of the relevant provisions of S.
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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 quasi-judicial functions in
sanctioning leases under S.29 of the Act, but
we shall proceed on the assumption that the
Commissioner was performing quasi-judicial
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 his functions, he acted in
utter disregard of the provisions of the Act and
the Rules. It is the manner i n which he
discharged his functions that is brought up in
these proceedings. In other words, the charge
and the allegations are to the effect that in
exercising his powers as Commissioner the
appellant acted in abuse of his power and it
was in regard to such misconduct that he is
being proceeded against. It is manifest,
therefore, that though the propriety and
legality of the sanction to the leases may be
questioned in appeal or revision under the Act,
the Government is not precluded from taking
disciplinary action if there is proof that the
Commissioner had acted in gross recklessness
in the discharge of his duties or that he failed
to act honestly or in god faith or that he
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omitted to observe the prescribed conditions
which are essential for the exercise of the
statutory power. We see no reason why the
Government cannot do so for the purpose of
showing that the Commissioner acted in utter
disregard of the conditions prescribed for the
exercise of his power or that he was guilty of
misconduct or gross negligence. We are
accordingly of the opinion that the appellant
has been unable to make good his argument
on this aspect of the case."
33 Relying upon the aforesaid judgment in Govinda
Menon's case, the Hon'ble Supreme Court, in the matter of K.K.
Dhawan, concluded that an officer performing quasi-judicial
functions could be proceeded departmentally, provided :
i) the act or omission is such as to reflect on the
reputation of the Government servant for his integrity
or good faith or devotion to duty, or
ii) there is prima facie material manifesting
recklessness or misconduct in the discharge of the
official duty, or
iii) the officer had failed to act honestly or in good faith
or had omitted to observe the prescribed conditions
which are essential for the exercise of statutory power.
34 In the instant matter, it is not an allegation against the
petitioner that he has acted in reckless manner or that there was
any misconduct in discharge of his duties or that he has acted in a
manner unbecoming of a Government servant or that there was
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any corrupt motive or that there was any allegation in respect of
receiving monetary or other favour. What is stated in the
Memorandum of Charge is that the decision arrived at by the
petitioner 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
quasi-judicial 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 Memorandum of Charge
served on the petitioner, which is subject matter of Writ Petition
No. 10120/2015, there is delay of about seven years in serving the
charges. The contention of the petitioner, in this context, needs to
be understood for the reason that the petitioner has come within
the zone of consideration for securing promotion to the post of
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Principal Commissioner, Income Tax, which, according to the
petitioner, is a reason for proceeding against him at the instance of
his rivals. The charges have been belatedly served, according to
the petitioner, in order to throw him out of the zone of
consideration for the promotional post of Principal Commissioner
of Income Tax.
36 The contentions raised by the petitioner, relying upon
the judgment in the matter of M.V. Bijlani, Bani Singh, P.V.
Mahadevan and N. Radhakishan, needs to be considered.
Inordinate delay in initiating disciplinary proceedings causes
prejudice to the petitioner more specially when the track record of
the petitioner is clean and he is placed in the zone of consideration
for the promotional post of Principal Commissioner of Income Tax.
37 Learned Counsel for the respondents, relying upon the
judgment of the Supreme Court in the matter of Secretary,
Ministry of Defence Vs. Prabhash Chandra Mirdha, (2012) 11
SCC 565, contends that the proceedings are not liable to be
quashed on the grounds that those are initiated at a belated stage
or could not be concluded in a reasonable period, unless the delay
creates prejudice to the delinquent officer. It was further observed
that the gravity of alleged misconduct is a relevant factor to be
taken into consideration while quashing the proceedings.
38 In the instant matter, as has been discussed above,
delay in proceeding against the petitioner caused serious prejudice
to him since the matter has been opened up at the stage when the
petitioner has come within the zone of consideration for promotion
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to the higher post. Looking to the gravity of the charges, it must be
noted that, in respect of the Memorandum of Charge served upon
the petitioner, which is a subject matter of Writ Petition No.
10120/2015, Memorandum of Charge has been served after about
20 years. Out of the six cases mentioned in the memorandum of
charge, three cases were the matter of consideration for recording
adverse entries against the petitioner. Those adverse entries,
recorded 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 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-
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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.
39 For the reasons recorded above, according to us, both
the writ petitions deserve to be allowed and same are accordingly
allowed. The Memorandums of Charge, served on the petitioner,
stand quashed and set aside.
40 Rule is accordingly made absolute. There shall be no
order as to costs.
A. S. GADKARI R.M.BORDE
JUDGE JUDGE
adb/wp1011915
