Union Of India Through The ... vs Kamal Kishore Dhawan & Anr.
2012 Latest Caselaw 2494 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                Date of Decision: 18.04.2012

+                                W.P.(C) No.9519/2009

Union of India through the Secretary,
Department of Revenue & Anr.                                  ...      Petitioners

                                          versus

Kamal Kishore Dhawan & Anr.                                   ...      Respondents

Advocates who appeared in this case:

For the Petitioners              :Mr.R.V.Sinha with Mr.A.S.Singh Advocates.
For Respondent No.1               :Mr.P.S.Patwalia & Ms.Prem Lata Bansal, Sr.
                                  Advocates with Mr.Amanpreet Singh &
                                  Mr. Ruchir Bhatia, Advocates.

CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR
HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA

ANIL KUMAR, J.

*

1. The petitioners, Union of India, through the Secretary,

Department of Revenue & Anr., have challenged the order dated 6th

February, 2009 passed by the Central Administrative Tribunal,

Principal Bench, New Delhi in OA No.1179/2008, titled as „Kamal

Kishore Dhawan v. Union of India through the Secretary, Department of

Revenue & Anr.‟, allowing the original application of the Respondent

No.1 and quashing the charge-memo dated 28th April, 2003, the

dissenting note recorded by the Disciplinary Authority dated 5th March,

2007 and the final order dated 1st April, 2008 imposing the punishment

of compulsory retirement on the Respondent No.1. The petitioners were

further directed to reinstate the Respondent No.1 in service with all

consequential benefits and to pay the costs of Rs 10,000/- to the

Respondent No.1, in view of the long agonizing departmental enquiry to

which he was subjected with regard to assessment orders passed by

him in his quasi judicial capacity.

2. Brief facts to comprehend the disputes between the parties are

that Respondent No.1 is a Group „A‟ officer of 1977 batch of the Indian

Revenue Service. He earned his promotions to the posts of Deputy

Commissioner, Joint Commissioner, Additional Commissioner and then

Commissioner, Income Tax, which undoubtedly implied that he had

been assessed as a meritorious officer, suitable and fit for the said

posts. The next promotion was to the post of Chief Commissioner or

Director General of Income Tax. However, he was issued a preliminary

show cause notice dated 7th November, 2000 seeking an explanation

regarding alleged lapses/ irregularities in eight cases, out of which six

cases were completed by him as Deputy Commissioner

(Assessment/Assessing Officer) and remaining two, were pertaining to

the period when he was the Deputy Commissioner-in-charge of the

Range. In response to the preliminary show cause notice, the

Respondent No.1 by his letter dated 3rd January, 2001 had stated that

the said preliminary show cause notice was regarding matters that had

occasioned several years back and, therefore he would not be able to

give a proper reply without referring to primary/original records. This

request was followed by other letters dated 1st February, 2001 and 9th

February, 2001 by the Respondent No.1 again pointing out that the

complete records were not supplied to him, nor was he allowed the

inspection of the same.

3. Despite this, on the basis of whatever records were supplied to

him, the Respondent No.1 submitted his replies dated 9th February,

2001 and 12th March, 2001. However, no response to any of his letters

and representations were received and instead a charge sheet was

issued to him after a lapse of about two years i.e. on 28th April, 2003.

According to the Respondent No.1, the perusal of the chargesheet

revealed that the imputations made therein were substantially different

from the lapses/ irregularities alleged in the preliminary show cause

notice. The Respondent No.1 denied the allegations made out in the

charge sheet by his letter dated 27th May, 2003.

4. On 17th November, 2003, the Respondent No.1 again made a

request for inspection of the complete case records. On 10th November,

2005, the Respondent No.1 had also requested for expeditious disposal

of the enquiry proceedings as he was being punished in the form of

frequent cross country transfers and sidelined postings, causing grave

mental torture to him, as well as, his entire family. The education of his

children also greatly suffered due to the frequent transfers.

5. Since there was no progress made in the enquiry, the Respondent

No.1 was compelled to approach the Jabalpur Bench of the Tribunal by

way of OA No. 769/2005 praying for the quashing of the enquiry

proceedings on the ground of delay and latches. The writ petition filed

by the Respondent No.1 was disposed of by order dated 19th October,

2005 directing the petitioners to conclude the departmental enquiry

within a period of six months. However, the petitioners obtained an

extension of time for three months through a miscellaneous application.

Thereafter, they moved yet another misc. application for an extension of

one month which was obtained by order dated 20th July, 2006. Still

there was no compliance and instead the petitioners sought further

extension by moving the High Court in WPC No. 11525/2006.

Thereafter, the High Court allowed an extension till the first week of

November, 2006. However, the petitioners still did not comply with the

orders of the High Court and further extension was allowed by order

dated 15th December, 2006 up to 28th February, 2007 by imposing a

cost of `5,000/- on the petitioners and again by order dated 2nd March,

2007 up to 15th April, 2007 subject to payment of cost of `5,000/- to

the Respondent No.1.

6. In the meantime, by letter dated 14th November, 2005 the

Respondent No.1 again wrote to the Enquiry Officer stating that the

complete records were not shown to him which was, in fact, allowed by

the Enquiry Officer. He also requested for allowing Sh. Keshav Prasad,

retired member, ITAT, Lucknow to be his defense assistant. The

Enquiry officer in his proceedings dated 23th November, 2005 noted

with concern the delay on the part of the disciplinary authority in the

non-production of the complete records for the Respondent No.1‟s

inspection. Again on 5th December, 2005, the Respondent No.1

informed the Enquiry Officer that all the relevant documents which

were permitted were not made available for inspection. The Enquiry

Officer took cognizance of the same in his daily order sheet dated 5th

December, 2005. However, by order dated 16th December, 2005 the

Respondent No.1 was refused to avail the services of Sh. Keshav Prasad

as a defence assistant, and he was also directed to produce the defense

documents. Thereafter, Respondent No.1‟s representation dated 19th

December, 2005 against the rejection of the defense assistant was not

taken into consideration. On 2nd January, 2006, the regular hearing

commenced and concluded on the same day in the absence of the

defense assistant, as well as, the defense witnesses of the Respondent

No.1. On 1st February, 2006, a general examination of the Respondent

No.1 was made by the Enquiry Officer again in the absence of his

defense assistant and on 8th February, 2006 the Respondent No.1 was

made to submit his defense brief.

7. After a lapse of more than a year, the Respondent No.1 was

served with a copy of the note of disagreement along with the enquiry

report dated 27th October, 2006 and the second stage advice of the CVC

on 5th March, 2007. According to the Respondent No.1, on perusing the

CVC advice, as well as, the note of disagreement, it was clearly evident

that the Respondent No.1 was held guilty at that very stage itself

without giving him a reasonable opportunity to defend himself and

thereby violating principles of natural justice. However, despite this the

Respondent No.1 submitted a detailed reply dated 5th April, 2007 to the

note of disagreement contending that the disagreement note of the

disciplinary authority was contrary to the facts, material and evidence

available on record.

8. Since the enquiry was not completed and the final order in the

matter had not been passed despite enough opportunities given, the

Respondent No.1 was compelled to again move the Administrative

Tribunal of the Jabalpur Bench. The Jabalpur Bench of the Tribunal

passed a final order on 21st August, 2007 in OA No. 911/2007 holding

that the enquiry proceedings would become non-existent and would be

deemed to have become extinct, if the same would not attain finality by

31st October, 2007 in view of the decision of the High Court by order

dated 25th June, 2007, subject to furthers costs of `5,000/- imposed on

the petitioners. Despite extensions given time and again, instead of

complying with the same, the petitioners again approached the High

Court of Madhya Pradesh and by order dated 22nd April, 2008 the High

Court of Madhya Pradesh granted a fifth and final extension to the

petitioners up to 30th May, 2008 by imposing another amount of `

10,000/- as cost on the petitioners.

9. Meanwhile, the petitioners, however, already passed the penalty

order No. F.No.C-14011/17/2003, dated 1st April, 2008 imposing the

major penalty of compulsory retirement on the Respondent No.1, prior

to the order passed by the Madhya Pradesh High Court on 22nd April,

2008. This fact was also not disclosed to the High Court of Madhya

Pradesh. The cheque of `10,000/- was enclosed with the penalty order,

when the same was served upon the Respondent No.1 by registered

post on 27th May, 2008. As per the Respondent No.1, the penalty order

was merely a verbatim reproduction of the note of disagreement,

without taking into consideration the reply and submissions made by

the Respondent No.1 against the same.

10. Against penalty order and the note of disagreement dated 5th

March, 2007 and charge sheet memo dated 28th April, 2003 the

Respondent No.1 filed an original application being O.A. No. 1179/2008

contending, inter alia, that the allegations against the Respondent No.1

were without any evidence; that even the Inquiry Officer had only held

that the some of the charges against the Respondent No.1 were partly

proved on account of only alleged technical error committed by the

Respondent No.1; no mala fides or culpable negligence was attributable

to him; that the Respondent No.1 was greatly prejudiced since the

disciplinary proceedings were initiated and conducted at a very belated

stage. The allegations were regarding the assessment for the period of

1995 while the charge memo was issued only in 2003 and the enquiry

was concluded after a period of 5 years in 2008. The disciplinary

authority completely disagreed with the findings of the enquiry officer in

a whimsical and arbitrary manner and concluded the guilt of the

Respondent No.1 without giving him an opportunity of being heard. The

impugned order was passed without complying with the directions of

the High Court of Madhya Pradesh.

11. Per contra, the petitioners had contended, inter alia, that the

Respondent No.1 has been engaged in protracted litigation with the

department in respect of two disciplinary proceedings pending against

him. The petitioners further contended that the directions of the High

Court of Madhya Pradesh were duly complied with as the penalty order

of compulsory retirement was served upon the Respondent No.1 on

27th May, 2008 along with a cheque of 10,000/- as ordered by the

Madhya Pradesh High Court. With regard to the averment that the

allegations are in relation to certain assessment orders passes by the

Respondent No.1 as a quasi judicial authority and therefore, it cannot

be subjected to disciplinary proceedings, the petitioners alleged that the

allegations fell within the six exception enumerated by the Apex Court

in Union of India v. K.K. Dhawan, 1993 (2) SCC 56 holding that even

officers exercising quasi judicial functions are liable to be proceeded

within disciplinary proceedings. With regard to the contention of delay

in initiating the disciplinary proceedings against the Respondent No.1,

the petitioners had urged that the same had already been argued before

the Jabalpur Bench of the Tribunal in O.A. No. 769/2005 which was

also considered by the Tribunal in its order dated 19th October, 2005.

The petitioners had also contended that the permission to engage Sh.

Keshav Prasad as defense assistant was rightly denied as on the date of

hearing he was a legal practitioner, moreover the enquiry officer had

very cogently mentioned in the daily order sheets dated 16th December,

2005 and 2nd January, 2006 that there was no need for any defense

assistant as neither any prosecution witnesses were to be cross

examined, nor any defense witnesses were to be examined as they were

unable to attend the proceedings.

12. The Tribunal considered the pleas and contentions of both the

parties and examined the documents on record. With regard to the plea

that the orders of the High Court of Madhya Pradesh were not complied

with on the ground that the costs directed to be given to the

Respondent No.1, was given along with the order of penalty and not

prior to the penalty order, the Tribunal observed that just because the

costs were not paid before the penalty order was passed, it could not be

held that it was in non-compliance of the orders of the High Court of

Madhya Pradesh.

13. The Tribunal, however, found merit in the contention that the

disciplinary authorities dissenting note, dated 5th March, 2007

disagreeing with the findings of the enquiry officer was without

affording reasonable opportunity to the Respondent No.1 and in gross

violation of principles of natural justice. The Tribunal observed that

there was no manner of doubt that the disciplinary authority, while

recording its disagreement note, predetermined the issues without

taking into consideration the representation made by the Respondent

No.1. The relevant portion of the Tribunal‟s findings are as follows:

"We are not reproducing the discussion made by the disciplinary authority on articles of charge so as not to unnecessarily burden the judgment, as also for the reason that with regard to each article of charge, the disciplinary authority has drawn a firm conclusion. The conclusion has not been arrived at on each charge separately, like 1st, 2nd, 5th, 6th and 7th articles of charge as proved, whereas 3rd

and 4th as fully proved, but collectively as well in conclusion drawn as extracted above. While disagreeing with the enquiry officers findings in relation to articles I to VII, articles I, II, III, IV, V and VII have been held to have been fully proved, article VI having been substantially proved, and only part (a) of charge under article VI has been viewed as not proved. There cannot be any manner of doubt that the disciplinary authority while recording its disagreement note pre-determined the issues without taking into consideration the representation that may have been made by the applicant. This, in our view, clearly amounts to pre-judging the issue. Such a course is not permissible."

14. The Tribunal also relied on the judgments of Commissioner of

Police v. Const. Pramod Kumar & Ors. CWP No. 2665/2002 &

4593/2001, Yoginath D. Bagde v. State of Maharashtra & Anr. JT 1999

(7) SC 62, and Punjab National Bank & Ors. v. Kunj Behari Mishra,

(1998) 7 SCC 84 wherein it was held that while disagreeing with the

findings of the enquiry officer, the disciplinary authority must arrive at

a decision in good faith and he is also required to give the rationale for

such a disagreement, while such decision is a tentative and not final.

15. The Tribunal further observed that in view of the facts and

circumstances of the matter, it was clear that the disciplinary authority

had not considered the representation of the Respondent No.1 against

the disagreement note. The relevant portion revealing the rationale for

this finding is as follows:

"15. In the facts as fully detailed above, we are of the considered view that the applicant has been deprived of giving his comments/representation against the disagreement note, or in other words, the disciplinary authority has returned an incorrect finding that the applicant had submitted nothing with regard to the note of disagreement made by the disciplinary authority. The disciplinary authority in the facts and circumstances as fully detailed above, only considered the reply of the applicant wherein he had mentioned that because of non- compliance of the orders passed by the Tribunal and the High Court, the proceedings had abated. His main reply dated 5.4.2007 sent through covering letter dated 22.8.2007 was not considered at all. While trying to explain the observations of the disciplinary authority that the applicant did not bring anything new on record which had not been considered earlier and that there was nothing new in the representation of the applicant which could lead to change in the view formed earlier, it is interesting to note that the disciplinary authority while mentioning that nothing new was brought on record, tried to explain that it was referring to the earlier opportunities provided to the applicant at the time of calling for his version before issuance of the chargesheet, as also the defence brief by him during the course of enquiry proceedings. All that the disciplinary authority thus considered was the defence projected by the applicant before the charge was submitted, or, at the most, the case as put up by him before the enquiry officer. The requirement of law at the stage when the disciplinary authority was to pass the final order was to consider the objections or representation of the applicant dated 5.4.2007 dealing with the dissent expressed by the disciplinary authority to the report of the enquiry officer. The same, it is proved, even though having been received, never came to be considered."

16. The Tribunal, thereafter, found it appropriate to decide the whole

issue in the matter, instead of remitting the matter back to the

disciplinary authority, since in the later scenario the charges would still

be pending against the Respondent No.1 and he would become

disentitle for any substantive relief in case of charges not getting

established and as considerable delay had already been caused in

conducting the enquiry. Thus, the Tribunal further considered the plea

of delay in the initiation of the proceedings and also in concluding the

same. With regard to the aspect of delay in concluding the proceedings

in view of the sequence of events in the facts and circumstances of the

case it was observed that since the petitioners had complied with the

orders of the High Court as per the final extension allowed in the

matter, within which the proceedings had indeed culminated, the same

cannot be allowed to be re-agitated by the Respondent No.1 before the

Tribunal but it will be a relevant factor to consider and decide whether

to decide the allegations against the Respondent No.1 or to remand the

matter back to the disciplinary authority. The plea of delay in initiating

the proceedings against the Respondent No.1 was not relied by the

Tribunal to quash the charge sheet and punishment, observing that the

Respondent No.1 had raised such a plea in his original application

before the Tribunal of Jabalpur Bench bearing OA. No 911/2006, but

the Tribunal had only gone into the aspect of delay in concluding the

proceedings. The Respondent No.1 had also filed the two OA bearing no.

769/2005 and 911/2006 where this plea was also allegedly taken. The

Tribunal held that the orders of the Tribunal and High Court of

Jabalpur have attained finality and the same cannot be allowed to be

re-agitated, as it would render the said orders to be non-existent. The

relevant portion of the Tribunal‟s judgment is as follows:

"17.......... Insofar as, the plea of the applicant with regard to delay is concerned, the same can be divided in two parts, the first would be delay in initiation of proceedings, whereas the second would be delay in concluding the proceedings. Insofar as, the second part of the case is concerned, that, in view of various orders passed by the Tribunal and the High Court referred to above, has to be decided against the applicant. It may be recalled that the applicant filed OA No.769/2005 before the Tribunal at Jabalpur, which was disposed of on 19.10.2005 directing the Respondents to conclude the departmental enquiry within a period of six months. The Respondents thereafter obtained extension of time by three months through a miscellaneous application. They moved yet another misc. application vide which another extension of one month was obtained on 20.7.2006. Still there was no compliance, and the Respondents instead moved the High Court seeking further extension of time for completing the departmental proceedings. The prayer was allowed by the High Court in WP No.11525/2006(s) and time was extended till the end of first week of November, 2006, making it clear that the proceedings should be concluded from all spectrums and no further extension would be granted. However, the Respondents did not comply with the order, and instead moved yet another application seeking extension of time, but this time the High Court extended the time vide order dated 15.12.2006 upto 28.2.2007 subject to payment of costs of Rs.5000/- to the applicant. However, the proceedings were not completed by 28.2.2007, and the Respondents again pressed for another extension of time, which was extended upto 15.4.2007 subject to payment of a further sum of Rs.5000/- as cost to the applicant, vide order dated 2.3.2007. It was mentioned in the order that if the total cost of Rs.10000/- was not paid within two weeks, the order dated 2.3.2007 would be deemed to have become extinct. Vide another misc. application No.1190/2007 before the High Court, the Respondents sought extension of time for a period of six months to fully comply with the order dated 2.3.2007. The High Court vide order dated 25.6.2007 allowed the prayer of the Respondents and granted extension of time as sought for, subject to a further

payment of Rs.5000/- as cost to the applicant. The Respondents were directed to ensure compliance of the orders passed by the High Court fully and positively by the end of October, 2007. From the events as given above, it is clear that the Respondents were successful in obtaining an order from the High Court granting time to them to finalise the proceedings by the end of October, 2007, by which time, admittedly the proceedings were completed. The plea of the applicant for quashing the proceedings on account of delay in finalisation of the same ultimately resulted only in partial success, when a time bound direction came to be issued and within the time last prescribed by the High Court, the proceedings were completed. This aspect of the case, in our considered view, cannot be re-agitated by the applicant. The second aspect is with regard to delay in initiation of the proceedings. The two OAs of the applicant bearing Nos.769/2005 and 911/2006, it may appear from records of the case, were for quashing the chargesheet on the ground of delay caused in both initiation and conclusion of the proceedings. In the order dated 21.8.2007 in OA No.911/2006, it is clearly recorded that the applicant had approached the Tribunal so as to quash the disciplinary proceedings initiated against him for certain alleged omissions committed by him during the period 1995 to 1998. Whereas, it may be true that the only aspect gone into by the Tribunal or for that matter, even the High Court, was delay in finalising the proceedings, and the issue with regard to delayed initiation of proceedings was not gone into, but it appears that such a plea was raised by the applicant. The applicant has not placed on records copies of the two OAs filed by him in the Jabalpur Bench. Once, there was a plea raised by the Respondents that the matter with regard to delay has achieved finality in view of the orders passed by the Tribunal or the High Court at Jabalpur, the applicant ought to have placed on records his two OAs to show that the plea with regard to delayed initiation of proceedings was not a subject matter of dispute before the Tribunal and the High Court at Jabalpur. The applicant has indeed filed a rejoinder, but there as well, nothing like that the plea with regard to delay in initiation or conclusion of the proceedings was not taken, has been mentioned. From the tenor of the orders passed, referred to above, and in particular the order dated 21.8.2007 in OA No.911/2006, it appears that the plea to quash the charge was also based on the ground of proceeding against the applicant in 2003 for the alleged acts of omission pertaining

to the period 1995 to 1998. Be that as it may, the plea with regard to delayed initiation of departmental proceedings vis- a-vis the events was available to the applicant at that stage. Such a plea having not been raised, the applicant would not be permitted at this stage to agitate the matter. Even though, strict provisions of Code of Civil Procedure may not be applicable, but this Tribunal can take the view that all causes of action have to be joined in one lis, and that a party cannot be permitted to seek the same relief based on different grounds in different petitions. Further, in case, this Tribunal may hold initiation of proceedings to be delayed, warranting quashing of the charge, the orders passed by the Tribunal and the High Court would be as if non-existent. Once, the applicant has accepted the orders, as referred to above, and the Respondents were allowed to conclude the proceedings by the specified period, during which period they did complete the proceedings, the ground of delayed initiation of proceedings, in our considered view, cannot be taken into consideration at this stage."

17. The Tribunal also observed that the articles of charges could be

broadly placed in three categories i.e. (i) not passing appropriate orders

or passing the same in a casual manner (ii) committing irregularities or

lapses and (iii) exhibiting gross negligence and total disregard to

statutory provisions conferring undue benefit upon the assessee. The

Tribunal also noted that the charges did not contain any allegations

that while passing the various orders or conducting the proceedings as

mentioned above, the Respondent No.1 had malafide intentions or had

passed the order on extraneous considerations, or that the said orders

were an outcome of gross negligence. Regarding Article-II of the

charges, it had been mentioned that the Respondent No.1 had failed to

correctly apply the provisions of Section 79 of the Income Tax Act,

thereby conferring undue benefit to the assessee. The Tribunal held

that the mere use of the language employed in the rule, like that the

Respondent No.1 had failed to maintain absolute integrity and devotion

to duty and exhibited conduct unbecoming of a government servant in

total contravention of provisions of rules is not enough. It was further

held that the core allegations ought to have been pointing towards

definite acts of omission and commission which would show that the

employee had not maintained absolute integrity and devotion to duty or

exhibited conduct unbecoming of a government servant. It was

categorically held that, except for Article-II of the charges framed

against the Respondent No.1, none of the charges even remotely showed

or imputed any culpable intention to the Respondent No.1 or that he

had passed orders on extraneous considerations. Even with regard to

Article -II, the Tribunal observed that the Enquiry officer had rightly

held that the charge was not proved, since the difference in view of the

assessing authority and the Respondent No.1 was on account of

difference in perception and, in any case, the appellate authority in the

matter had upheld the order of the Respondent No.1. However, despite

categorical and rational finding of the Enquiry Officer, the disciplinary

authority disagreed with the same without giving any cogent reason and

held that the same is proved on the premise that it was not a difference

of opinion but the failure on the part of the Respondent No.1 to carry

out the basic requirements of verification and investigation. Though the

Tribunal refrained itself from going into the merits of the decision

passed by the Respondent No.1 as specified in Article-II, it did however,

categorically held that it was not a case of mala fides, or gross

negligence and total disregard of the statutory provisions. It was noted

that if the disciplinary authority indeed disagreed with the finding of the

enquiry officer, then the appellate authority who upheld the decision of

the Respondent No.1, also ought to have been chargesheeted. There was

absolutely no cause to have singled out the Respondent No.1. Thus, it

was conclude that the disciplinary authority in departmental

proceedings could not go into the legality of the order passed by the

Respondent No.1, particularly when the same was upheld in appeal.

18. The Tribunal also placed reliance on the judgment of the Apex

Court in the matter of Union of India & Ors. v. K.K. Dhawan, (1993) 2

SCC 56 wherein it was discussed whether disciplinary proceedings can

be initiated against an employee while discharging quasi judicial

functions. The Apex Court while holding that an officer who exercises

judicial or quasi judicial powers acts negligently or recklessly or in

order to confer undue favor on a person, is not acting as a judge, culled

out the following six exceptions where an officer could be

departmentally proceeded even while exercising judicial functions:

(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 because Lord Coke said long ago though the bribe may be small yet the fault is great.

19. It was held that the above stated instances were not exhaustive,

however, for a mere technical violation or merely because the order is

wrong and the action is not falling under the above enumerated

instances, the disciplinary action is not warranted. Thus each case is to

be decided upon the facts and no absolute rule can be postulated.

20. Therefore, in view of the facts and circumstances and the judicial

precedents, the Tribunal held that the department had miserably failed

in its endeavor to prove the allegations of gross negligence against the

Respondent No.1, and that the disciplinary authority appears to have

pre-judged the issue, which is fortified by the fact that the dissenting

note appears to be a final order holding the charges proved. In any

case, if the dissenting note was tentative in nature, even then the

principles of natural justice have been violated, as the pleas and

contentions of the Respondent No.1 had not been taken into

consideration by the disciplinary authority before passing the order of

punishment on the basis of dissenting note. The Tribunal was also of

the view that the punishment of compulsory retirement is grossly

disproportionate to the allegations of negligence, as there is no specific

finding that the Respondent No.1 had acted on extraneous

considerations. The relevant portion of the judgment is as follows:

"30. On facts, we are of the considered view that the department has miserably failed in its endeavour to show that the applicant while passing orders subject matter of article of charge-II and part (a) of article of charge-V had indulged in gross negligence. We have recorded the reasons to that effect hereinbefore. We may only state that the enquiry officer returned a firm finding with regard to both charges mentioned above that the applicant had not indulged in any misconduct, whereas the disciplinary authority fell into a serious and egregious error in reversing the findings of the enquiry officer. May be, if perhaps, the reply/representation of the applicant to the dissenting note of the disciplinary authority was properly gone into, the result would have been different. As mentioned above, even though, the disciplinary authority received the representation of the applicant against the dissenting note dated 5.3.2007, but it chose not to make even a reference of the same. We have already mentioned that at one stage we were thinking of remitting the matter to the disciplinary authority to consider the representation of the applicant against the dissenting note and pass speaking order, but in the facts and circumstances of this case, it does not appear appropriate or desirable. The reasons for that are manifold. The applicant, it may be recalled, was issued charge memo in the year 2003 with regard to orders passed by him in his quasi judicial capacity way back in 1995-86 and 1997-98. The applicant is an officer of 1977 batch. He was at the relevant time Deputy Commissioner of Income Tax. Thereafter, he was promoted to the rank of Joint Commissioner and further to that of Additional Commissioner and then Commissioner of Income Tax. The applicant has thus been subjected to departmental enquiry after he had got as many as three promotions. Even though, in the peculiar facts and circumstances of this case, and in particular, that the applicant may not be

legally permitted at this stage to challenge the proceedings on the ground of unexplained delay, we have rejected his contention, but the fact remains that the applicant has been subjected to departmental enquiry with regard to absolutely stale matters. Further, the Respondents took as many as five years in completing the enquiry, and in the process sought number of extensions from the High Court, thus wasting valuable time, during which the applicant suffered cross-country transfers, naturally to his total disadvantage and inconvenience. Further, the applicant, it appears, is not likely to get any justice from the departmental authorities. The dissenting note and the final order, as mentioned above, are verbatim the same, but for the difference that in the final order, events subsequent to the dissenting note have been mentioned. The disciplinary authority, it appears, had pre-judged the issue, as would be further fortified from the fact that the dissenting note appears to be a final order holding the charges to be proved. As mentioned above, the dissenting note is not a tentative one. Further, even though while explaining in the written statement the observations made in the impugned order that nothing new was stated by the applicant, it has been mentioned that the applicant had projected his defence on receipt of the charge memo and during the course of enquiry. However, we are surprised to note that even the said stand of the applicant was not considered by the disciplinary authority in the impugned order. The disciplinary authority did not choose to refer to what the applicant had already mentioned by way of his defence. As for the quantum of punishment, making only some lapses in the assessment order carried out by the applicant in his quasi judicial capacity perhaps would not have warranted such ghastly punishment as compulsory retirement, even if it may have been a case of gross negligence. It is pertinent to mention that there was no finding returned even by the disciplinary authority that the applicant had favoured the assessee for any extraneous considerations. Even a finding with regard to simply favouring the assessee is not recorded. Over and above the reasons given above, what we find is that no useful purpose at all would be served in remitting the matter to the disciplinary authority, as a clear and categorical finding can be returned on the basis of available records."

21. The Tribunal, therefore, held that there was no purpose in

remitting the matter to the disciplinary authority, and, therefore,

directed that the charge sheet memo dated 28th April, 2003, the

dissenting note dated 5th March, 2007 and the final order dated 1st April

2008 imposing the punishment of compulsory retirement be quashed

and set aside and the applicant be reinstated in service forthwith with

all consequential benefits. A cost of `10,000 was also imposed on the

petitioners which was payable to the Respondent No.1 for putting him

through such a long agonizing departmental enquiry and that too for

assessment orders passed by him in his quasi judicial capacity.

22. The petitioners have challenged the order of the Tribunal dated

6th February, 2009 on the ground that the Tribunal failed to exercise its

power of judicial review and instead acted as an appellate authority by

passing an order which is clearly contrary to the law laid down by the

Supreme Court in B.C. Chaturvedi vs. Union of India: AIR 1999 SC 484,

State of Tamil Nadu v. S. Subramanian: 1996 (7) SCC 509, and Bank of

India & Anr. v. Degala Suryanarayana: 1999 (5) SCC 762.

23. As per the learned counsel for the petitioners, the decision of the

Tribunal to not remand the matter to the Disciplinary Authority and

instead to decide the issue on its own is contrary to the law laid down

in the matter of Managing Director, ECIL, Hyderabad &Ors. v. B.

Karunakaran: (1993) 4 SCC 727. According to him, the Tribunal should

not have acted as the Appellate Authority but instead should have only

exercised its powers within the limitation prescribed under judicial

review. Therefore, the learned counsel contended that in case the

Tribunal was of the view that the procedure prescribed by law had not

been followed while dismissing the Respondent No.1 from the service or

that the principles of natural justice had not been adhered to then

instead of adjudicating the matter on its own, the Tribunal ought to

have remanded the matter back to the Competent Authority.

24. The learned counsel further contended that the Tribunal had

erred in holding that the alleged charges framed against the Respondent

No.1 do not constitute misconduct being a part of the judicial functions

of Respondent No. 1. The learned counsel also relied on the judgments

of Union of India v. K.K. Dhawan, (1993) 2 SCC 56, Para28 at page 67;

Union of India & Ors. v. Duli Chand, (2006) 5 SCC 680, paras 5,7&9

and Govt. of T.N. v. K.N. Ramamurthy, (1997) 7 SCC 101, paras 7,8 &

9. It has also been urged that the judgment of Ramesh Chander Singh

v. High Court of Allahabad (2007) 4 SCC 247 which has been relied on

by the Tribunal while passing the impugned judgment is misplaced and

contrary to the law of binding precedent and judicial propriety since it

had referred to the judgment of the Nagarkar‟s case (supra) which was

overruled in Duli Chand‟s case (supra) and also because the judgments

of the Apex Court in the matter of K.K. Dhawan and Duli Chand‟s case

were neither brought to its notice nor was it taken into consideration. In

any case, as per the learned counsel for the petitioners, the said two

judgments are binding precedents for the co-ordinate bench of the

Supreme Court and, therefore, they could not be overruled by the Co-

ordinate Bench of equal strength. It was also contended that at the

most the observations in the matter of Ramesh Chander Singh‟s case

would only be in the nature of obiter.

25. It was also argued by the learned counsel for the petitioners that

the Tribunal had erred in holding that once the proceedings under the

Income Tax Act had attained finality for the reasons that the order of

the delinquent officer was not challenged or was challenged however, it

did not find favour with the appellate forum or otherwise, the

departmental proceedings could not be initiated. As per the learned

counsel, the proceedings under the Income tax Act or the Customs Act

and the disciplinary rules, both are distinct and different. Whereas, the

proceedings under the I.T. Act or the Customs Act are in the nature of

quasi-criminal requiring the proof of beyond reasonable doubt, whereas,

the proceedings under the service rules are based on the preponderance

of probability. In addition, the authorities under the Act and the

disciplinary authorities under the service rules are different. While

under the Income Tax Act, the proceedings pertain to the assessment

and appeal thereof involving the revenue, whereas under the Service

rule, one is proceeded with for the lapses under the conduct rules.

Reliance was placed on the judgment of Union of India vs. K. K.

Dhawan para 18 (supra) and Union of India v. Upender Singh, (1994) 3

SCC 357, paras 4, 6, 8 to 10.

26. It was further contended that merely because the Respondent

No.1 had got promotions during the pendency of the disciplinary

proceedings would not be a ground in itself to quash the charge memo

or not proceed against him. In this regard, reliance had been placed on

the judgment of Union of India vs. B. C. Chaturvedi, (1995) 6 SCC 750,

para 8.

27. Per contra, the learned counsel for the Respondent No.1 has

contended that the Tribunal has rightly concluded that the Respondent

No.1 has been put through a long agonizing departmental inquiry

pertaining to the matters when he was a Deputy Commissioner of the

Income Tax and that too for the assessment of orders made by him in

his quasi judicial capacity, which is why a cost of `10,000/- was also

awarded in favour of the Respondent No.1. According to the learned

counsel, the present writ petition is not sustainable on the very ground

that the order passed by the Disciplinary Authority is bad in law, in

view of the inordinate delay, first in initiating the proceedings against

Respondent No.1 and then in completing the inquiry. The Charge-sheet

was served against Respondent No.1 only in the year of 2003 for the

orders passed for the assessments years AY 1993-94 and 1994-95 in

the year 1995-96 and 1997 and that too pertaining to matters regarding

the exercise of his powers in his quasi judicial capacity. Even after the

issuance of the charge sheet, there had been gross delay in the

departmental proceedings initiated against Respondent No.1 and in

ultimately passing the final orders by the petitioners, which had only

occasioned after lapse of 5 years i.e. in the year 2008. According to the

learned counsel, the petitioners have been unsuccessful in explaining

the delay and, therefore, on this ground alone the entire disciplinary

proceeding is liable to be vitiated. In this regard the learned counsel for

the Respondent No.1 has relied on the judgment of P.V. Mahadevan v.

M.D., T.N. Housing Board, (2005) 6 SCC 636 wherein the Supreme

Court has categorically held that protracted disciplinary enquiry against

a government employee should be avoided not only in the interests of

the government employees but in public interest and also in the

interests of inspiring confidence in the minds of the government

employees.

28. It is further contended that the findings of the Enquiry Officer on

the charges framed against Respondent No.1 were based on facts and

the evidence available on the record, however, the same was rejected by

the Disciplinary Authority by way of a disagreement note, which

culminated into the passing of the final order imposing the punishment

of compulsory retirement on Respondent No.1. As per the learned

counsel for the Respondent No.1 the findings of the Disciplinary

Authority are not substantiated by any evidence on the record, and

instead it is absolutely perverse and based on mere conjectures and

surmises.

29. It is also argued that the allegations of misconduct on the part of

Respondent No.1 are baseless and that the petitioners have been

unsuccessful in imputing any mala fides or culpable negligence as

against the Respondent No.1 to warrant the imposition of the

punishment of compulsory retirement on him. Even if there is an error

of judgment or an innocent mistake that is imputable against

Respondent No.1, the same would not constitute misconduct. Reliance

has also been place on the judgment of Z.B.Nagarkar v. Union of India

and Ors., (1999) 7 SCC 403.

30. Learned counsel for Respondent No.1 further asserted on the

dissenting note of the Disciplinary Authority not being tentative in

nature and the same clearly revealing a predetermined mind and a final

disposition prior to giving the Respondent No.1 a fair opportunity of

representing against it. Regardless, as per the learned counsel, the

Disciplinary Authority did not even take into consideration the

representation of Respondent No.1 against the disagreement note, and

instead it merely reiterated its findings given in the disagreement note

while passing the final order. This, according to the learned counsel, is

a clear violation of the principles of natural justice and, therefore, it has

been rightly quashed by the Tribunal. The judgments of Yoginath D.

Bagde v. State of Maharashtra JT 1999 (7) SC 62, Punjab National

Bank and Os vs. Kunj Bihari Misra, 1998 (7) SC 62 and Commissioner

of Police v. Constable Pramod Kumar, W.P.(C) No. 2665 of 2002 decided

on 15th September, 2002 have been relied on for substantiating this

plea by the learned counsel for the Respondent No.1.

31. According to the learned counsel, the Tribunal had rightly

observed that having a particular perception in assessment orders

passed by the Respondent No.1 in his quasi judicial capacity which was

also the perception of the appellate authority even though it may be at

variance with the petitioner‟s assessment would not warrant such a

disproportionate punishment of compulsory retirement. Therefore, it is

contended that in the facts and circumstances the writ petition

deserves to be dismissed, and that the directions given in the order

impugned by the petitioners should be upheld.

32. This Court has heard the learned counsel for the parties in detail

and has also carefully perused the documents on record, as well as, the

order of the Tribunal and other orders. One of the pleas that requires to

be resolved is whether or not the Tribunal was justified in not

remanding the matter to the disciplinary authority on noticing various

illegalities committed by the disciplinary authority? What is also to be

seen is whether the Tribunal had assumed the role of the appellate

authority or in no case the Tribunal should have considered the merits

of the charges and ought to have remanded the matter to the

disciplinary authority mechanically.

33. The Tribunal in not remanding the matter to disciplinary

authority, has taken into consideration that none of the charges even

remotely showed or imputed any culpable intention of the Respondent

No.1 or that he had passed orders on extraneous considerations; even

regarding article II of the charge sheet, enquiry officer had held that the

charge was not proved as difference in perception between the assessing

authority/Respondent No.1 and the petitioners would not be the proof

of the charge and that the order of the Respondent No.1 was even

upheld by the appellate authority and no action was contemplated

against the appellate authority for forming the same opinion on the

basis of which charge was framed against the Respondent No.1;

Disciplinary Authority could not go in legality of the order passed by the

Respondent No.1; inordinate delay of 7 years in issuing the charge

sheet; a further delay of 5 years in concluding the departmental

proceedings and that the Respondent No.1 had been subjected to

enquiry with regard to absolutely stale matters; Respondent No.1 is on

the verge of retirement and he has been unnecessarily harassed and

that even after the alleged assessments of the year 1995-1997, the

subject matters of the charge sheet, the Respondent No.1 had been

given three promotions to the posts of Joint Commissioner, Additional

Commissioner and Commissioner of Income tax; and that there is

nothing on record to show that the Respondent No.1 acted in a manner

which would reflect on his reputation for integrity or good faith or

devotion to duty, no material to show recklessness or misconduct on

his part in discharge of his duty, nothing to show that he acted in

manner which was unbecoming of a Government servant or that the

Respondent No.1 acted negligently in prescribing conditions or acted in

manner to favour any of the assesses or that he had been actuated by

corrupt motive.

34. A perusal of the order impugned by the petitioners clearly reveals

that the Respondent No.1 has been subjected to a long period of

proceedings in framing the charges against him which aspect had been

considered in detail by the Tribunal. After considering all the pros and

cons and in the interest of justice, the Tribunal decided not to remand

the matter to the disciplinary authority which would have resulted in

further protracted proceedings, ensuing in the gross violation of the

Respondent No.1‟s rights.

35. There cannot be an absolute proposition that in every case of

disciplinary proceeding, if the disagreement note is not tentative and

the representation made against such a final opinion formed by the

disciplinary authority, has been disposed of without considering the

representation and imposing a harsh punishment almost after one and

half decade, then necessarily the matter is to be remanded back to the

disciplinary authority to issue a fresh tentative disagreement note and

thereafter, to consider the representation made against such a tentative

note and then to pass another order. In the interest of justice taking

into consideration the facts and circumstances and the equities and the

irreparable loss which may be caused to one of the parties and apparent

lack of prima facie material in support of the allegation, the High Court

and the Tribunal cannot be divested of the power to decide the fate of

disciplinary proceedings and to remand the matter mechanically to the

disciplinary authority who has delayed the matter for almost one and a

half decade. In Jagdish Kumar Vs National Building Construction

Corporation and Anr, MANU/DE/8502/2007 it was held that though

the Disciplinary Authority has the power and jurisdiction to disagree

with the findings of the Enquiry Officer by issuing a disagreement note

and issue a notice to the delinquent officer as required. However, care

has to be taken that the order of the Disciplinary Authority should not

result in a second or de novo inquiry otherwise the inquiries could go

on perpetually until the view of the Disciplinary Authority is accepted

and this would be abuse of the process of law.

36. Whether or not to remand the matter to the disciplinary authority

has to be decided in the backdrop of the facts and circumstances of

each case and after considering various facets as enumerated

hereinbefore. Rather, the Supreme Court has held in numerous cases

that the interest of justice would be defeated, if the Courts start

remanding the matter loosely and indiscriminately without application

of mind. In order to appreciate the decision of the Tribunal not to

remand the matter to the disciplinary authority, it would be appropriate

to consider as to what are the charges, the findings of the enquiry

officer, disagreement of the disciplinary authority and the observations

of the Tribunal.

37. Article I.

i. This article alleged that Respondent No.1 while working as

the Deputy Commissioner of Income Tax, Spl Range-1 Surat,

during the period of 1995-96, completed the assessment in the

case of Sh. A Sivan for A.Y. 1993-94, u/s 143(3) of the Income Tax

Act, in a very casual manner. It was also alleged that he had made

lump sum additions to the manufacturing account without

conducting any worthwhile investigations as regards the purchases

and sundry creditors and without examining the authenticity of

the excise registers, and that Respondent No.1 also failed to initiate

mandatory penalty proceedings u/s 271B of the IT Act.

ii. The Enquiry Officer, after carefully examining the evidence

on record, had concluded that the said charge had not been

proved. As per the Enquiry Officer, the Respondent No.1 had

sufficiently explained the reason for the lump sum addition made

by him and also because the department had failed to produce any

evidence showing that the other records, if verified, would have

resulted in addition of some other higher amounts. With regard to

the allegation that the charged officer had made the assessment in

a casual manner, the Enquiry Officer had observed that no specific

guidelines or procedure, which had been allegedly violated by the

Respondent No.1, had been brought out by the department. In

addition, it could not be established from the record as to what

more the Respondent No.1 should have done or what further

verification should have been carried out after the return was filed

by the assesses. There was also nothing evident from the record

that the actions of Respondent No.1 had resulted in any loss of tax

revenue. The Enquiry Officer after carefully considering the

provision of Section 271-B of the IT Act had also come to the

conclusion that initiation of the penalty proceedings under the said

provision was unnecessary since Section 271 of the IT Act was not

applicable prior to 1st July, 1995 while the matter contained in the

charge pertained to the assessment carried out in the year 1993-

1994.

iii. The Disciplinary Authority on the other hand was of the

view that the charge had been proved since the Enquiry Officer had

failed to appreciate the fact that it was the Respondent No.1 who

was required to call for the details of the sundry creditors and

examine the same and also to verify the Excise Register, both of

which wasn‟t done by Respondent No.1 and, therefore, the

assessment had been conducted in a casual manner. The Enquiry

Officer‟s finding that the proceedings under section 271 B of the IT

Act were unnecessary was also not accepted by the Disciplinary

Authority, however, without giving any reason or rationale.

iv. The Tribunal observed that the Respondent No.1 had made

an assessment of Rs. 1,50,000/- higher than the returned income.

Therefore, the order was passed by the Respondent No.1 in favour

of the Revenue and that rather aggrieved by the said order, it was

the assessee who had filed an appeal and challenged the order of

the Respondent No.1. Thereafter, the CIT (A) had confirmed the

additions made by the Respondent No.1. Rather CIT (A) had chosen

to reduce the addition done by the Respondent No.1 by one-half at

`75,000/- in place of `1,50,000/- done by the Respondent No.1.

Regardless, since the Respondent No.1 had passed an order in

favour of the Revenue it was held that it cannot be contended that

he had the intension to confer any undue benefit on the assessee

or that he had any mala fide intension.

v. In the disagreement note, the Disciplinary Authority has

not relied on any rule or regulation which were allegedly violated

by the Respondent No.1 or which procedure for verification, while

carrying out assessment had not been complied with. No facts or

evidence and reasons have been relied on by the disciplinary

authority to justify the charge, that the assessment had been

carried out in casual manner. The fact that the CIT (A) had also not

enhanced the addition during review assessment was though noted

by the Disciplinary Authority, however the same was completely

disregarded without any basis.

vi. Any conduct does not become misconduct merely because

it is stated to be misconduct. The Disciplinary Authority was itself

unable to impute any specific facts, evidence or reasons for

misconduct so as to require reconsideration. Therefore, there is

nothing on the record which requires reconsideration for

establishing charge of misconduct against the Respondent No.1,

nor the matter is to be remanded to be reconsidered by the

disciplinary authority.

38. Article II

i. Article II alleged that Respondent No.1 had passed an

assessment order under section 143(3) for A.Y. 1993-94 in the case

of M/s Sidmak Laboratories (India) Pvt. Ltd without gathering the

necessary details warranting the various disallowances. It was

further alleged that Respondent No.1 had failed to correctly apply

the provisions of Section 79 of the IT Act and thereby exhibited

gross negligence and total disregard to the statutory provisions.

ii. The Enquiry Officer on taking into consideration the

evidence on record and the defense of Respondent No.1 arrived at

the conclusion that the allegation pertained to a matter of

difference in perceptions of two officials exercising quasi judicial

functions which does not establish that it was on account of some

mala fides in any manner. It was held that the charge has not been

proved. It was also observed that the action of the Respondent No.

1 pertaining to the allegation of not following of Section 79 of the IT

Act was not upheld by the Appellate Authority and therefore, the

allegations against Respondent No.1 could not be sustained. It was

categorically noted that the case did not seem to be a matter of

under assessment or escapement of taxable income, therefore the

failure to maintain absolute integrity could not be attracted in the

said case and this was not even the charge.

iii. The Disciplinary Authority, however, in the disagreement

note had observed that the question of difference in opinion could

not arise since the Respondent No.1 had failed to carry out the

basic requirements of verification and investigation and also not

passed a reasoned order. As regards the allegation that non

application of Section 79 of the IT Act by the Respondent No.1 had

been accepted by the Appellate Authority, it was stated that the

same had not been accepted by the petitioners and that an appeal

against the same was still pending. The Disciplinary Authority

further disagreed with the Enquiry Officer‟s finding that there is no

under assessment or escapement of income on two counts, firstly

since it was Respondent No.1‟s conduct that was in question

regardless of the loss of revenue and secondly, since under the IT

Act, losses incurred in any A.Y. are allowed to be carried forward to

be adjusted against the income of later or (successive) A.Y.s,

therefore, it could not be held that no loss of revenue had resulted.

Therefore, the Disciplinary Authority had concluded that the

charge was proved.

iv. The Tribunal on examining the charge and its facets in

detail was of the view that the only charge that could implicate the

Respondent No.1 in the allegation of gross negligence, was

regarding the non compliance of Section 79 of the IT Act. The

Tribunal carefully examined the record to ascertain whether or not

the assessee had been unduly benefitted by the actions of

Respondent No.1 and whether he had any culpable intensions or

passed the said order on extraneous considerations. The Tribunal

observed that the order passed by the Respondent No.1 dated 30th

November, 1995 was the subject matter of challenge by the

assessee in the matter to the extent of additions of `7,230/- made

by Respondent No.1. The Appellate Authority after carefully

considering the contentions of the assessee and the facts of the

said matter, recorded a short order dated 14th August, 1997

wherein it was decided that the matter was to be restored to the file

of the assessing officer to re-frame a fresh assessment order. On

remanding the matter the assessing authority i.e. the successor of

Respondent No.1 held that the provisions of Section 79 were

applicable in the said matter which was a view contrary to the one

taken by the Respondent No.1. The said order was again

challenged by the assessee in the matter, and the Appellate

Authority by order dated 9th January, 2001 clearly held that the

assessing officer had been in error in invoking Section 79 in the

facts of the said case and thus the order passed by the Respondent

No.1 earlier had been upheld. Therefore, the Tribunal relied on the

fact that the Appellate Authority had ultimately upheld the view of

Respondent No.1 in the matter of applicability of Section 79 of the

IT Act in the said case. The Tribunal also took note of the two

counts on which the Disciplinary Authority had disagreed with the

Enquiry Officer. However, the Tribunal stated that it is not for the

Tribunal to determine as to which of the two views, either the one

passed by the Assessing Officer or the one rendered by the

Appellate Authority is correct. Regardless, the very fact that the

Appellate Authority took the same view as that of Respondent No.1

only substantiated his plea that there was no gross negligence or

mala fides or total disregard for statutory provisions. The Tribunal

further observed that if indeed the Respondent No.1 is to be

charged with gross negligence then the Appellate Authority who

upheld the same view as that of Respondent No.1, should also had

been charge-sheeted and that the Respondent no. 1 could not be

solely held responsible for the same. Therefore, the Tribunal

concluded that Respondent No.1 did not in any manner confer any

undue advantage on the assessee and that the Disciplinary

Authority perhaps was not justified to hold that the order passed

by Respondent No.1 was incorrect or against law, till such time

that the appeal filed by the revenue audit before the ITAT is

allowed, the fate of which was not informed to the Tribunal at that

time. Even now the learned counsel for the petitioners was unable

to disclose the fate of said appeal. The Tribunal also categorically

held that the Disciplinary Authority in departmental proceedings

could not go into the legality of the order passed by Respondent

No.1 in his quasi judicial capacity, particularly when the same was

upheld in appeal.

v. This Court is of the view that since the Appellate Authority

upheld the decision of the Respondent No.1 with regard to non

application of Section 79 of the IT Act, therefore, the same cannot

be doubted to imply gross negligence or misconduct on the part of

Respondent No. 1 since the Respondent No.1 had merely passed

an order in exercise of his quasi judicial functions and the

petitioners too have been unsuccessful in imputing any mala fides

or extraneous considerations on his part. In the facts and

circumstances, this Court does not find any illegality or perversity

in the reasoning of the Tribunal, nor the matter is such which

requires re-consideration by the disciplinary authority, nor it is to

be remanded in the circumstances.

39. Article III

i. Article 3 alleged that the Respondent No.1 committed the

following irregularities while completing the assessments under

section 143(3) of the IT Act in the case of M/s United Phosphorous

Ltd. for A.Y. 1994-93:

(a) He failed to reduce various ineligible receipts from the profits of the business while entertaining the company‟s claim of deduction u/s 80HHC of the IT Act.

(b) He erroneously held an amount of interest u/s 244 A of Rs. 42, 82,152/- as deductible having been taxed in an earlier year, whereas only an amount of Rs. 35, 52, 932/- should have been allowed as deductible for A.Y. 1994-95.

(c) He failed to initiate penalty proceedings u/s 271(1)(c) of the IT Act on major issues which disallowance from the assessee‟s claims had been made both on legal and factual grounds.

ii. The enquiry office held that with regard to the allegation (a)

the deductions made by the Respondent No.1 under Section 80

HHC were subject to Appeal and Audit and that in both the stages

neither the CIT(A) nor the RAP had observed any irregularities

therefore, the charge in this regard was not proved. For charge (b)

in Article III, the Enquiry Officer observed that there seemed to be

an arithmetical error which may not attract all the provisions of

Rule 3(1) of the CCS (Conduct) Rules on the Respondent no. 1 i.e.

failure to maintain integrity, etc. However, the Enquiry Officer held

that there was some error apparent on the amount of interest

withdrawn in the matter and therefore, the Respondent No.1 ought

to have left an office note for further verification, if required. Thus

allegation (b) was held to be partly proved. With respect to

allegation (c), the Enquiry Officer observed that there was no case

made out by the prosecution establishing the fact that any penalty

proceedings for the alleged concealment was required to be

initiated in the said case and therefore, the said allegation was

held to be not proved.

iii. The Disciplinary Authority disagreed with the findings of

the Enquiry Officer on Article III and alleged in the disagreement

note that the Respondent No.1 as an Assessing Officer is expected

to be well versed in law and capable of deciding on the

admissibility of deductions claimed by an assessee and therefore,

there is a clear failure to examine the records properly on the part

of the Respondent No.1 for making correct disallowances on

account of interest already allowed to the assessee. It was also

stipulated that the Respondent No.1 erred in not initiating the

proceedings under section 271(1)(c) of the Act. Therefore, the

Disciplinary Authority was of the view that the allegation in Article

III had been fully proved.

iv. With regard to Article III, the Tribunal observed that nil

income had been returned by the assessee, and that Respondent

No.1 had made an assessment at `3.04 crores bringing in revenue

of about `2.49 crores, and that the additions made by Respondent

No.1 were also confirmed in appeal by the CIT (A). Therefore, the

charge could not be sustained. In any case, it is pertinent to note

that the Disciplinary Authority has itself not imputed any mala

fides, or gross negligence on the part of Respondent No.1. Also at

the most there could have been irregularity in the manner of

computing the interest under Section 244A of the IT Act by the

Respondent No.1, however, this in itself does not amount to

misconduct which is to be tried by way of a departmental

proceeding.

v. This Court is of the view that the petitioners have failed to

substantiate the allegations made in the said charge and therefore,

even prima facie the charge is not made out. If that be so the

matter is not liable to be remanded and the petitioners have failed

to show any illegality, irregularity or perversity in the decision of

the Tribunal. Allegations do not show even prima facie any

recklessness or misconduct in the discharge of his duties by the

Respondent No.1 nor any negligence can be inferred in the facts

and circumstances. Any corrupt motive or any undue favour to the

assessee has not even been alleged. In the circumstances, if the

Tribunal has not remanded the matter on account of other

irregularities and illegalities committed by the petitioners, the

order of the Tribunal cannot be termed to be perverse or contrary

to law.

40. Article IV

i. Article IV alleged that the Respondent no. 1 passed order

under Section 143(3) of the IT Act in the case of M/s Arochem

Silvassa Ltd. for A.Y. 1993-94 without levying mandatory interest

under Section 234A of the IT Act, while determining the taxes

payable on completion of scrutiny assessment.

ii. The Enquiry Officer on examining the documents on record

in great detail concluded that the said charge had not been proved.

The Enquiry officer had observed that in the Assessment Order the

Respondent No.1 had ordered interest under section 234 B & 234

C etc. Therefore, it could not be held that any undue benefit of

interest of Section 234 A had been conferred on the assessee. The

dispute in the matter remained regarding the issue, whether the

revised return was a valid return and therefore, the question of the

applicability of the tax under Section 234 A had arisen. On

perusing the assessment order, the Enquiry Officer was of the view

that it was not evident that the Respondent No.1 had treated the

revised return as statutorily valid as alleged in the Article and that

the prosecution also could not produce anything to show that the

Respondent No.1 had accepted the revised return or considered the

income disclosed in the revised return as acceptable. The Enquiry

Officer further went a step forward and stated that even if it is to

be assumed that the Respondent No.1 had not discussed about the

rejection of revised return in his assessment order, yet it is not a

case of any malafide intensions or undue benefit to the assessee.

iii. The Disciplinary Authority disagreed with the finding of the

Enquiry Officer and stated that the Enquiry Officer had erred in

concluding that there is no evidence to show that the Respondent

No.1 had considered the income of the revised return. It was

observed that in the revised return the assessee has excluded a

sum of `1, 15,379/- treating the same as income not attributed to

the industrial activity. The Respondent No.1 had taken the said

amount into consideration while computing the deductions under

section 80 H & 80 I, as is evident from the assessment order.

iv. It is pertinent to notice that the Disciplinary Authority

could not assume that the amount excluded in the revised return

by the assessee had been taken into consideration. If that be so

then how undue benefit had been conferred on the assessee or how

the Respondent No.1 had relied on any extraneous material while

taking the alleged decision. The fact that the irregularity, if any,

amounted to "misconduct" is not apparent from the record and the

allegations as has been noted and relied on by the Disciplinary

Authority has not been made out even prima facie. Therefore, the

departmental action taken against the Respondent no. 1 could not

be justified on the said charge.

v. In the circumstances, since no prime facie material was

available with the Disciplinary Authority to show any recklessness

or misconduct on the part of the Respondent No.1 in not

considering the revised return, remanding the matter by the

Tribunal would have been a futile exercise. In Union of India Vs

Duli Chand, (2006) 5 SCC 680 in para 9 the Supreme Court had

held as under:

9. In our opinion, Nagarkar case was contrary to the view expressed in Union of India Vs K.K. Dhawan, (1993) 2 SCC 56 case. The decision in K.K. Dhawan (supra) being that of a larger Bench would prevail. The decision in Nagarkar case therefore does not correctly represent the law.

vi. Consequently, there is no illegality or any irregularity in the

order of the Tribunal not to remand the matter in this regard to the

Disciplinary Authority, so as to require any interference by this

court in exercise of its writ jurisdiction. It also cannot be held in

the circumstances that the Tribunal has exercised its appellate

jurisdiction in the facts and circumstances.

41. Article V

i. Article V alleged that the Respondent No.1 had committed

the following lapses in the assessment of the case of M/s Ecoplast

ltd. A.Y. 1993-94, which was completed by him under section

143(3) of the IT Act:

(a) He passed the assessment order in a grossly negligent manner, without calling for the company‟s explanation on the disproportionate increase in supervision charges and other expenses.

(b) He failed to reduce the unabsorbed investment allowance of `6,83,679/- pertaining to the eligible Unit from the eligible profits of the Unit, for allowing the correct deduction under section 80 I of the IT Act, leading to an under assessment of income by `1,70,921/-

ii. With regard to allegation (a), the Enquiry Officer observed

that the Respondent No.1 had questioned the disproportionate

expenses which is evident from the order sheet wherein he has

written "Why increased" and he had also called for various details

which is recorded in the order sheet and which is evident from the

fact that the assessee had submitted the same in a separate folder.

Therefore, the allegation of the department that the same had not

been taken into consideration by the Respondent No.1 could not be

accepted. It was also observed that the department had failed to

substantiate their allegation that the Respondent No.1 had wrongly

allowed deductions of amounts, since they did not contend as to

what the correct admissible amount would have been which would

not have resulted in under assessment or conferring undue benefit

on the assessee. With regard to allegation (b), the Enquiry Officer

observed that the irregularity in the same was highly technical in

nature and that the same could perhaps be properly appreciated

by an expert in the income tax laws. It was concluded that the said

charge had been „partly proved‟ since the total income as assessed

by Respondent No.1 was `78,87,670/-, whereas the reassessment

order specified the same to be `80,58,590/-.

iii. The Disciplinary Authority accepted that the assessee had

given the details of the expenses, but went on to hold that despite

abnormal increase in the said expenses, no explanation was

obtained by the Respondent No.1 while examining the accounts

and assessing the total income of the case under scrutiny, and that

the five-fold increase in the supervision charges and almost 100%

increase in other expenses in the current year compared to the

accounts of the preceding year should have been enquired into

assiduously by him and a reasonable conclusion for the same

ought to have been drawn on the nature, reasonableness and

genuineness of the expenditure incurred and claimed, and also

that the Respondent No.1 had been grossly negligent in not putting

across to the assessee any queries as regards the abnormal

increase in the expenses compared to the preceding year.

iv. The Tribunal observed that inspite of the categorical finding

of the Enquiry Officer that the Respondent No.1 had made the

necessary inquiries by relying on the order sheet of the Respondent

No.1 wherein the query regarding the increase had been posed to

the assessee, and the details were called for by Respondent No.1,

still the Disciplinary Authority chose to disregard the same. The

Tribunal also held that it was quite aware of having limited

jurisdictional powers while reviewing the order passed by the

departmental authorities, however, in case of a finding which had

been returned by completely ignoring the evidence, as in the

present case in the shape of documents, and by further misreading

and misinterpreting the observations made by the Enquiry Officer

in his report, thus in a way not giving any reason for disagreeing

with the finding returned by the Enquiry Officer on the said issue,

the Tribunal has ample power to look into the same. It was further

held that no Court or Tribunal can ignore such illegalities by the

Disciplinary Authority and blindly follow the findings returned by

the disciplinary authorities, howsoever, grossly unjust and against

the records the same may be.

v. In view of the fact that in the order sheet dated 20th July,

1995 relied on by the Enquiry Officer, it was categorically

stipulated by the Respondent No.1 as to why there has been an

increase in the expenses as claimed by the assessee and also it has

been mentioned that various records be called for in order to

examine the same, it cannot be inferred that the Respondent No.1

had not taken the necessary precautions or examined the requisite

documents before passing the assessment order. Therefore,

negligence against Respondent No.1 could not be imputed in the

facts and circumstances of the case. Also with regard to allegation

(b) of Article V the irregularity as noticed by the Enquiry Officer

himself is of a very technical nature, therefore it cannot be

assumed that the Respondent no. 1 had made the said deductions

or caused the under assessment with a malafide intension or that

the same was based on any extraneous considerations. This also

cannot be disputed that the hierarchy succeeding the Respondent

No.1 was more than capable to correct the technical error, if any,

in the said assessment order.

42. Article VI

i. Article VI alleged that Respondent No.1 while passing the

assessment order U/s. 143 (3) in the case of M/s Demuric Holding

P. Ltd. for A.Y. 1994-95, committed the following lapses:-

(a) he inappropriately allowed a set off of speculation loss of `24,31,100/- against the company‟s long term capital gain.

(b) he blindly accepted the valuation and revised valuation under Rule ID of the WT Act, with regard to equity shares of United Phosphorous Ltd., without obtaining the certified balance sheet of the company on the nearest date available to the valuation date.

(c) he unquestioningly accepted the unsecured loans of `1,95,29,500/- without causing any enquiry as regard Permanent Account Numbers of the loan givers and their creditworthiness.

(d) he failed to correctly reverse interest of `1,07,856/- allowed U/s 244A of the IT Act in an earlier intimation u/s 143(1)(a) in the same case, while determining the taxes payable in terms of his order u/s 143(3) of the IT Act.

ii. Regarding allegation (a) contained in Article VI, the Enquiry

Officer observed that based on the evidence on record, it did not

appear to be case of forward sale or speculation loss as alleged by

the department and, therefore, he held this part of the charge as

not proved. With respect to allegation (b) regarding blind

acceptance of valuation of equity shares, the Enquiry Officer

observed that both the department and the Respondent No.1 had

not produced any specific evidence in this regard, nor had the

department successfully established as to what was wrong in the

valuation accepted by the Respondent No.1. Thus, it was held that

the said charge was not made out. Regarding allegation (c), the

Enquiry Officer noted that since there was no evidence produced

by the department refuting the defence of the Respondent No.1 the

same had to be accepted as it is. With respect to allegation (d), it

was held that the same was partly proved since there was error

apparent on the rectification order passed by the Respondent No.1,

which was accepted by him as well. However, the Enquiry Officer

also categorically noted that the possibility of the error being an

inadvertent one could not be ruled out and that there was no

evidence of any malafide intension to attract the provisions of Rule

3(1) of the CCS (Conduct) Rules and no such facts have been

disclosed by the petitioners which would necessitate to remand the

matter to the Disciplinary Authority in the facts and

circumstances.

iii. The Disciplinary Authority accepted the finding of the

Enquiry Officer with regard to the allegations (a) and (d) however,

disagreed with the findings pertaining to the allegations (b) and (c)

contained in Article VI. Allegation (b) had been merely refuted by

the Disciplinary Authority without assigning any reasons and with

regard to allegation (c) it had been noted that during examination

of any cash credit introduced into the books, an Assessing Officer

is required to examine (i) identity of the creditor, (ii) the

creditworthiness of the creditor & (iii) the genuineness of the

transaction, which had not been adequately discharged by

Respondent No.1, therefore, the said charge was proved.

iv. The Tribunal on examination of the record observed that in

Article-VI, against the returned income of `30.29 lakhs the

Respondent No.1 had completed the assessment at a taxable

income of `99.93 lakhs in a detailed speaking order and the major

addition of `74.88 lakhs was also confirmed in appeal by CIT (A)

dismissing the assessee‟s appeal. Therefore, it is clear that the

order which was passed by Respondent No.1 was also in favour of

revenue, and that it was the assessee who was aggrieved by the

same and not the department. Thus, it cannot be held that the

Respondent No.1 had caused any undue benefit to the concerned

assessee or that there was any prima facie material that the

Respondent No.1 had acted recklessly or negligently.

v. Consequently, there is no illegality or any irregularity in the

order of the Tribunal not to remand the matter in this regard to the

Disciplinary Authority so as to require any interference by this

court in exercise of its Writ jurisdiction. It also cannot be held, in

the circumstances, that the Tribunal has exercised its appellate

jurisdiction in the facts and circumstances.

43. Article VII

i. Article VII alleged that Respondent No.1 had issued

inappropriate and irregular directions u/s 144A of the IT Act to the

ACIT Circle 2(2), Surat, in the case of M/s. Vijay Fabrics for A.Y.

1995-96, in as much as his directions to allow amendment to the

statements of the partner, given in course of survey u/s 133A in

this case, from an original "lakh metres" to "lakh rupees", was not

actuated by any verification and was also not borne out from the

facts of this case.

ii. The Enquiry Officer examined the said order passed by

Respondent No.1 and found it to be reasoned and detailed order.

Therefore, the allegation that orders were issued without

verification was held to be not correct. It was also observed that the

assessment order passed by Respondent No.1 was challenged

before the Appellate Authority and the same was upheld and the

stand taken by Respondent No.1 was approved. Therefore, there

was no material for sustaining the charge against the Respondent

No.1 particularly in view of CO‟s detailed directions, and thus the

charge was not proved.

iii. The Disciplinary Authority disagreed with the finding of the

Enquiry Officer and referred to in the disagreement note without

any cogent reason and by stating that while issuing direction to the

Assessing Officer under Section 144 A of the IT Act, he had failed

to take notice of basic facts and, therefore, it was held that the

charge had been proved.

iv. On examining the report of the Enquiry Officer it was clear

that it was observed that the concerned ACIT after getting the

details from the firm and the ACIT who had conducted these

survey had submitted to the Respondent No.1 that "from the above

figure it appeared that the partner during the course of statement

had referred to the value of cloth in rupees and not in meters".

This was also based on confirmation of Shri Peerya, ACIT, stating

"mistake occurred inadvertently as claimed by the assessee" which

is why Respondent No.1 had finally issued directions to change the

unexplained stock from 7 lakh meters to Rs. 7 lakh. The Enquiry

Officer also gave a clear finding that in the said charge, the

responsibility to verify the discrepancies in the book of records was

that of the concerned ACIT and not the Respondent No.1. In any

case, the Department had not been able to impute any mala fides

against the Respondent No.1 in the said charge. Thus, it cannot be

held that the charge can be established against the Respondent

No.1. The petitioners have not disclosed such facts which would

have required re-evaluation by the Disciplinary Authority in the

facts and circumstances.

44. The Tribunal while considering the charges framed against the

Respondent No.1 had noted that none of the charges imputed that while

passing the various orders or conducting the proceedings as alleged in

the charges, the Respondent No.1 had mala fide intensions or that he

had passed the orders on extraneous considerations, or that the said

orders were an outcome of gross negligence, except for Article-II and

Article V (a). In the said charge, it was alleged that Respondent No.1

had exhibited gross negligence and total disregard of the statutory

provisions, by conferring undue benefit to the assessee. The Tribunal

also held that by merely using the language employed in the charges

framed, that the Respondent No.1 had "failed to maintain absolute

integrity and devotion to duty and exhibited conduct unbecoming of a

government servant in total contravention of the provisions of the rules"

is not enough. According to the Tribunal, the core allegation ought to

have been pointing towards definite acts of omission and commission

which would show that the employee did not maintain absolute

integrity and devotion to duty or exhibited conduct unbecoming of a

government servant. Therefore, the Tribunal held that barring Article II

and Article V (a), none of the other Articles remotely showed that the

Respondent No.1 had any culpable intentions or had passed an order

on extraneous considerations. The Tribunal further held that in view of

the charges framed against the Respondent No.1 it is clear that even the

department had not attributed extraneous considerations to

Respondent No.1 in passing the various orders. The orders passed by

him at the most could only be alleged to have contained some

irregularities or lapses. This Court on perusing the allegations

contained in the charges framed against the Respondent No.1 is also of

the opinion that none of them except for Article II and Article V (a)

imputes any "misconduct" on the part of Respondent No.1 as per the

ratio of the judgment of the Supreme Court in the case of K.K.Dhawan

(supra).

45. Therefore, the petitioners could proceed against the Respondent

No.1 only in respect of Article II and Article V (a) regarding the

Respondent No.1 exercising his quasi judicial functions. However, these

have also been analyzed to be without any legal and even factual basis.

The Tribunal examined all the charges framed against the Respondent

No.1 in great detail and came to the conclusion that most of the orders

passed by Respondent No.1, which were stipulated in the charges, were

in favour of the revenue, therefore, there couldn‟t have been even a

remote possibility of the Respondent No.1 having any extraneous

considerations in his mind while passing the said orders. There is also

no evidence on the record that would reflect, even prima facie, that he

had intended to confer any undue benefit on the assesses concerned, or

that he had any mala fide intentions while passing the orders. At the

most certain charges could have been viewed as irregularities or lapses

on the part of Respondent No.1 which could have been rectified by the

higher authorities.

46. The Tribunal also considered as to what acts of the Respondent

No.1 would constitute "misconduct" which was exhaustively dealt with

in the impugned order by relying on the provisions of Rule3(1)(i) 3(1)(ii)

and 3(1)(iii) of the CCS (Conduct) Rules, 1964 and also by relying on the

list of acts specified in the Notes on CCS(Conduct) Rules, 1964 3rd

Edition, 1980, published by the Government of India, MHA, DP & AR,

below rule 3-C of the 1964 Rules. The Tribunal noted that even though

a straightjacket definition of misconduct could not be given, but as

generally and normally understood, misconduct amounts to

transgression of some established and definite rule of action.

47. The Tribunal referred to the judgment of the Supreme Court,

Union of India & Ors. v. K. K. Dhawan, (1993) 2 SCC 56 and held that

in view of the six instances highlighted therein, in the instant case, it

cannot be inferred that for a mere technical violation or merely because

the order is wrong the disciplinary action was not warranted. The

Tribunal also referred to the judgment of Zunjarrao Bhikaji Nagarkar v.

Union of India & Ors. (1999) 7 SCC 409 wherein it was held that in the

said case there was nothing to show that the Disciplinary Authority had

any information within its possession from which it could form an

opinion that the Respondent No.1 had showed any favour to the

assessee by not imposing the penalty. He may have exercised his

jurisdiction wrongly, however, that wrong could have been corrected in

appeal as well, therefore, this reason alone would not form the basis for

initiating the disciplinary proceedings against an officer while he is

acting as a quasi judicial authority, since he is always subject to

judicial supervision in appeal. It was also held that if every error of law

is to be treated as a charge of misconduct, then it would impinge upon

the independent functioning of quasi judicial officers.

48. The learned counsel for the petitioners had contended that the

judgment of Ramesh Chander Singh v. High Court of Allahabad, 2007

(4) SCC 247 has been relied on by the Tribunal while passing the

impugned judgment, which is misplaced and contrary to the law of

binding precedent and judicial propriety, since the said judgment had

relied on the judgment of the Nagarkar‟s case (supra) which was

overruled in the case of Union of India & Ors. v. Duli Chand‟s case and

also because the judgments of the Apex Court in the matter of K.K.

Dhawan (supra) and Duli Chand‟s case (supra) were neither brought to

its notice nor were they taken into consideration.

49. The learned counsel for the petitioners contended that the said

two judgments are binding precedents for the co-ordinate benches of

the Supreme Court and, therefore, they could not be overruled by the

Co-ordinate Bench of equal strength. It was also contended that at the

most the observations in the matter of Ramesh Chander Singh‟s case

would only be in the nature of obiter.

50. On perusing the impugned order it is clear that the Tribunal did

not rely on the judgment of Ramesh Chander Singh (supra) in order to

adjudicate upon the present matter. It had indeed referred to the same

and had observed that there is a controversy regarding which ratio of

either Duli Chand (supra) or Ramesh Chand (supra) would be a

precedent. The judgments of K K Dhawan (supra), Duli Chand (supra)

and Nagarkar (supra) which has been followed in the Ramesh Chander

(supra) were duly examined and it was observed that while in the

judgments of K K Dhawan (supra) and Duli Chand (supra) it was held

that gross negligence can be a misconduct for which departmental

enquiry can be held even if the charged officer was discharging

functions in quasi judicial capacity, whereas, in the judgment of

Nagarkar, which has been upheld in the case of Ramesh Chand (supra)

it was held that it would have to be culpable negligence of an officer

which can be tested in a departmental enquiry. The bench strength of

the judgments in K K Dhawan (supra), Duli Chand (supra) and Ramesh

Chand (supra) is also equal, consisting of a quorum of three judges.

Thus which judgment would be a precedent for the controversy,

whether negligence would constitute misconduct to entitle disciplinary

proceedings against the charged officer was questioned? The Tribunal

noted that while the learned counsel representing the Respondent No.1

would insist that it is the law laid down by the Hon‟ble Supreme Court

in Nagarkar‟s case (supra) shall hold the field, which has been followed

in Ramesh Chander Singh (supra), particularly, when the said

judgment (Ramesh Chander Singh) is by a coordinate Bench and later

in point of time than that of Duli Chand (supra), and that the Tribunal

should hold that it is culpable negligence which can be subject matter

of departmental enquiry when it may relate to allegations that may

pertain to functions of an officer, which functions are discharged by

him in his judicial or quasi judicial capacity. On the other hand, the

counsel representing the petitioners would, however, insisted that the

judgment of the Supreme Court in Duli Chand (supra) would hold the

field, particularly when in the decision of Ramesh Chander Singh

(supra) the decision in Duli Chand (supra) has not been considered.

Ultimately the Tribunal concluded that even though it would not be

difficult to determine this controversy, on the basis of judicial

precedents covering the issue, however, it would refrain from doing so

since it did not feel the necessity to do so in the present case. It further

held that on the facts it is evident that the present case may not be one

where the Respondent No.1 can be saddled with the misconduct that

may be grossly negligent. It also held that even though, there is a

hierarchy of tribunals established under the Income Tax Act, the

petitioners did not prefer any appeal or revision against the orders

passed by Respondent No.1 in some matters out of those mentioned in

the charge sheet, where he might have passed orders against the

revenue. In so far as, the orders that were in favour of revenue, the

same had been appealed by the concerned assessee and the orders of

the Respondent No.1 had been ultimately upheld by the Appellate

Authority.

51. As has been detailed herein above, in none of the Articles, except

for Article II and Article V(a) gross negligence has been imputed against

Respondent No.1 nor has the department themselves alleged that the

Respondent No.1 had passed orders on extraneous considerations or

with a mala fide intention. While in Article II and Article V (a), even

though gross negligence has been alleged, however it could not be

substantiated either in facts or in law.

52. Regardless of all this, it cannot be denied that most of the orders

of Respondent No.1 had been in favour of the Revenue with the

assessee appealing against the same. Therefore, it could not be

contended that he had conferred undue advantage on the assessee

which is also evident from the record that the orders of Respondent

No.1 had been upheld by the Appellate Authority, therefore gross

negligence or mala fide intentions cannot be imputed against him nor

can be inferred nor there are any grounds for the same.

53. The Tribunal in view of the charges framed against the

Respondent No.1 not being proved and taking into consideration that

even if lapses on the part of the Respondent No.1 while exercising his

quasi judicial capacity were to be accepted, held that it could not

warrant such a ghastly punishment of compulsory retirement and,

therefore, decided that the final order dated 1st April, 2008 was liable to

be quashed.

54. The Tribunal while setting aside the punishment order of

compulsory retirement of the Respondent No.1 has also held that the

petitioners, disciplinary authority had pre judged the issue, as though

the enquiry officer had absolved the Respondent No.1 of most of the

charges and had also held that the petitioners had failed to prove the

allegation of gross negligence against the Respondent No.1, the

Disciplinary Authority while issuing dissenting note, disagreeing with

the Enquiry Officer had held that the charges had been proved and the

dissenting note was not at all a tentative note. While awarding

punishment, the Disciplinary Authority did not take into consideration

the representation made by the Respondent No.1. The Disciplinary

Authority had received the representation of the Respondent No.1

against the dissenting note dated 5.3.2007, but it chose not to make

even a reference of the same. The principles of natural justice had been

violated, as the pleas and contentions of the Respondent No.1 had not

been taken into consideration by the Disciplinary Authority. The

Tribunal was also of the view that the punishment of compulsory

retirement is grossly disproportionate to the allegations of negligence, as

there is no specific finding that the Respondent No.1 had acted on

extraneous considerations.

55. The learned counsel for the petitioners has not been able to

demonstrate that the dissenting note was tentative. When the

punishment is already prescribed as against the charged officer in the

disagreement note, then it is clearly indicative of the fact that the

Disciplinary Authority has already closed its mind to the representation

of the charged officer. It also discourages the charged officer, as after a

report by the enquiry officer in his favour, he is intimated that the

Disciplinary Authority not only disagrees but deems a certain

punishment to be imposed would be clearly a denial of an opportunity

of being heard making the entire process reminiscent of a kangaroo

court, wherein the proceedings are merely formalities and wholly

irrelevant. Reliance for this can be placed on Yoginath. D. Bagde Vs.

State of Maharashtra & Anr AIR 1999 SC 3734. In another matter of

Jiban Kumar Sarkar Vs. Union of India (UOI) and Ors. (2011) I LLJ 845

Cal, the Division Bench of the High Court of Calcutta had held as

under:

"20. The Disciplinary Authority has given its conclusive observations and findings in the guise of the disagreement note resulting in grave prejudice to the interests of the appellant apart from violating the enshrined principles of natural justice. There is no dispute that in the disagreement note Disciplinary Authority cannot express conclusive observations and/or findings as the same would prejudice the valuable right of the charged employee to make an effective representation in order to persuade the Disciplinary Authority not to hold the employee concerned guilty and also on the point of imposition of the punishment. In the present case, by expressing conclusive opinion, the entire exercise of issuing show cause notice became idle ceremony and empty formality. The Disciplinary Authority by expressing its final opinion instead of tentative findings in the disagreement note has prejudged the issue in violation of the principles of natural justice."

56. The Disciplinary Authority is required, under the law, to maintain

objectivity, impartiality and openness of mind to ensure the observance

of the principles of natural justice and fairness in administrative action.

Therefore, while disagreeing with the findings of the Enquiry Officer

care should be taken that the disagreement note must contain only

tentative reasons for disagreement. The sole purpose of providing this in

the departmental proceedings is to ensure that the charged officer does

not feel blind sighted and is made aware of the reasons for which the

Disciplinary Authority disagrees with the Enquiry Authority, which had

initially found a report in favour of the charged officer. The main

intention is to allow a proper and reasonable opportunity of hearing to

the charged officer in consonance with the principles of natural justice

and most importantly to render a last opportunity to the charged officer

to persuade the Disciplinary Authority on the basis of the findings of

the Enquiry Report. The reasons for disagreement should be tentative in

nature. Whether or not a disagreement note is tentative might not

necessarily be established by explicitly featuring the word "tentative"

while drafting the same. The same should be reflective in the language

and the content of the disagreement note. The reasons for the

disagreement should not be vaguely and loosely worded but instead

they should be precise and effectively assist the charged officer in

comprehending the apprehension of the Disciplinary Authority, which

in turn enables the charged officer to defend himself properly.

57. If a conclusion is already arrived at prior to giving the opportunity

to represent against the disagreement note, then the entire preceding

thereafter, would be rendered futile and would be a mere formality. A

conclusion specifying the guilt of the charged officer would in itself

discourage the whole purpose behind the proceedings and render the

entire process nugatory and pointless. The enquiry report would

virtually be rendered non-est.

58. When the punishment is already prescribed as against the

charged officer in the disagreement note, then it is clearly indicative of

the fact that the Disciplinary Authority has already closed its mind to

the representation of the charged officer. It also discourages the charged

officer, as after a report by the enquiry officer in his favour.

59. On perusing the record it is apparent that the report of the

Enquiry Officer is a detailed one containing the brief history of the case,

the articles of charges, the statements of imputation of misconduct, the

case as set up by the petitioners and the analyses of the evidence. On

the seven articles of charges framed against Respondent No.1, the

Enquiry Officer came to the conclusion that Articles I, II, IV, and VII not

proved while Articles III, V and VI partly proved. However, the

Disciplinary Authority did not agree with the findings of the Enquiry

Officer and therefore, issued a dissenting note dated 5th March, 2007

which contained the allegations imputed against the charged officer, the

findings of the Enquiry Officer and ultimately its own views. It is

pertinent that while discussing each and every article seriatim, the

Disciplinary Authority ultimately concluded that the "IO‟s finding has

not been found acceptable and the charge has been viewed as „proved‟

or „fully proved‟ except for Article VI which was held to be substantially

proved while only part (a) of the charge was held to be "not proved". The

5th para of the dissenting note titled as "Conclusions" contains the

summary of the view of the Disciplinary Authority pertaining to each

charge and further detailed that the said note was sent to the CVC for

their second stage advice for recommending levy of a suitable major

penalty on the Charged Officer, which was replied to by OM dated 8th

February, 2007 advising the imposition of a suitable major penalty on

Respondent No.1.It is only after the advice of the CVC was received that

the comments of Respondent No.1, representing against the said

dissenting note were called for.

60. The dissenting note is clearly indicative of the mindset of the

Disciplinary Authority, who had already decided that the Respondent

No.1 was guilty of the charges framed against him. It is also evident

that the opportunity of being heard given to Respondent No.1 was

merely a procedural formality. The consultation with the CVC for the

imposition of the punishment prior to hearing of the representation of

Respondent No.1 is also a substantial clue about the mind of the

Disciplinary Authority who had undoubtedly already formed its

conclusion on the guilt of Respondent No.1 with regard to the charges

framed against him. The learned counsel for the petitioners is unable to

point out any single factor or reason which would show that the

dissenting note was tentative nor has been able to show why the

representation of the Respondent No.1 was not considered by the

Disciplinary Authority before imposing the disproportionate punishment

of compulsory retirement in the facts and circumstances.

61. The Tribunal on perusing the record also observed that there was

no manner of doubt that the Disciplinary Authority while recording its

disagreement note had predetermined the issues without taking into

consideration the representation made by the Respondent No.1.

According to the Tribunal, this clearly amounted to prejudging the issue

and therefore, the dissenting note deservedly was quashed. The

Tribunal noted that the law is firmly entrenched that if instead of a

tentative opinion, a final view is taken contrary to the view expressed by

the Enquiry Officer, then it would be violative of the principles of

natural justice.

62. Consequently, for the foregoing reasons the inferences of the

Tribunal that the Enquiry Officer had returned a firm finding that the

Respondent no. 1 had not indulge in any misconduct; the Disciplinary

Authority fell into a serious and egregious error in reversing the findings

of the Enquiry Officer; non-consideration of the representation of the

Respondent No.1 against the dissenting note dated 5.3.2007; not

remanding the matter to the Disciplinary Authority for passing another

speaking order after considering the representation of the Respondent

No.1 for the reasons that the charge memo was issued in 2003 for the

assessment orders passed in 1995 - 1996 and 1997 - 1998, the

Respondent No.1 is an officer of 1977 batch and he had been promoted

despite the departmental enquiry three times to the posts of Joint

Commissioner, Additional Commissioner and Commissioner during the

pendency of departmental proceedings and thus he had been subjected

to departmental enquiry with regard to absolutely stale matters; the

petitioners took 5 years in completing the departmental enquiry after

seeking repeated extension from the High Court subject to cost from

time to time, the Respondent no. 1 suffered cross-country transfers

totally to his disadvantage and inconvenience; the Respondent no. 1

may not get any justice from the petitioners; the dissenting note and the

final order are almost verbatim the same; for procedural flaws based

more on his opinions in the assessment orders passed in quasi judicial

capacity would not have warranted such ghastly punishment of

compulsory retirement especially when there was not even the

allegation that the Respondent No.1 had even favored the assessee for

any extraneous considerations and that no useful purpose at all would

be served in remitting the matter as categorical findings can be

returned on the basis of available records and the Respondent no. 1 is

retiring soon, do not suffer from any illegalities, any regularities or any

such perversities which shall entail any interference by this Court in

exercise of its jurisdiction under Article 226 of the Constitution of India.

63. Therefore, for the foregoing reasons and in the facts and

circumstances, the order of the Tribunal dated 6.2.2009 passed in

O.A.No. 179 of 2008, titled as Kamal Kishore Dhawan Vs Union of India

& Ors. setting aside and quashing the Charge Memo dated 28.4.2003,

dissenting note dated 5.3.2007 and the order of punishment of

compulsory retirement of the Respondent No.1 and reinstating the

Respondent No.1 service forthwith with all consequential benefits and

imposing the costs of `10,000 on the petitioners is upheld and it is held

that the order is justified and in consonance with law and does not

require any interference of any type from this Court. The Respondent

No.1 is further entitled for costs which is quantified as `30,000/- in the

facts and circumstances. Costs imposed by this Court by this order be

paid within four weeks. Any other costs imposed on the petitioners from

time to time in any of the judicial proceedings initiated by the

petitioners, if not already paid, be also paid within four weeks. With

these directions the writ petition of the petitioners is dismissed and the

`Rule‟ issued on 21.7.2010 is discharged and the interim order dated

21.7.2010 staying the operation of the Tribunal‟s order is vacated.

Ordered accordingly.

ANIL KUMAR, J.

SUDERSHAN KUMAR MISRA, J.

April    18, 2012
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