Central Administrative Tribunal - Chandigarh
Unknown vs Union Of India Through Secretary To ... on 29 October, 2015
CENTRAL ADMINISTRATIVE TRIBUNAL
CHANDIGARH BENCH
(Reserved on 09.10.2015)
O.A No. 851/CH/2012 Date of decision- 29.10.2015
CORAM: HONBLE MR. SANJEEV KAUSHIK, MEMBER (J)
HONBLE MR. UDAY KUMAR VARMA, MEMBER (A)
Manjit Singh, Civil List Code No. 92087, Joint Commissioner of Income Tax, Presently posted as Senior DR, Income Tax Appellate Tribunal, Kendriya Sadan, Sector 9, Chandigarh.
S/o Sh. Prem Singh R/o 518 Ist Floor, Sector 10-D, Chandigarh.
APPLICANT
BY: Sh. G.S.Bal, Sr. Advocate along with Sh. Sewa Singh, Advocate, counsel for the applicant.
VERSUS
1. Union of India Through Secretary to Government of India, Ministry of Finance, Department of Revenue, North Block, New Delhi.
2. The Chairman, Central Board of Direct Tax, Ministry of Finance, Department of Revenue, North Block, New Delhi.
3. The Director, Central Vigilance Commission, Government of India, Satarkta Bhawan, GPO complex, Block-A, New Delhi-110023.
RESPONDENTS
BY: Sh. K.K.Thakur, Sr. Panel Counsel
ORDER
HONBLE MR. SANJEEV KAUSHIK, MEMBER (J):-
The applicant has invoked the jurisdiction of this Tribunal under Section 19 of the Administrative Tribunal Acts, 1985 impugning the charge sheet dated 02.01.2004 and order dated 12.03.2008 passed by respondent no. 3 with further prayer to quash the entire disciplinary proceedings initiated/pending against the applicant.
2. The facts born out from a conjunctive perusal of the pleadings as available on record which led to filling of the present application, are that on the basis of the rank secured in All India Service Examination, the applicant was appointed to Indian Revenue Service (Income Tax) of 1992, batch having Civil List Code No. 92087. He joined as Assistant Commissioner of Income Tax on 05.09.1993, after he was given one years extension. Sometime in the year 1997, he was promoted as Deputy Commissioner of Income Tax and thereafter, as Joint Commissioner of Income Tax in the year 2003. After completion of his training at National Academy of Direct Taxes, Nagpur, he was posted to Mumbai in the year 1995. Subsequently, in the middle of the financial year i.e. in November 1997 he was posted as DCIT in Central Circle Mumbai. It is the case of the applicant that while being posted there, he detected a huge evasion of Income Tax by the famous Harshad Mehta Group. He was served with a charge sheet alleging that under assessments were made by him between November 1997 to March 1998. Immediately, the applicant submitted his reply denying the charges, and a regular inquiry was initiated against him. One Sh. S.K.Chaurasia, Commissioner for Departmental Inquires of Central Vigilance Commission was appointed as Enquiry Officer along with Sh. Laxman Singh, Additional Commissioner of Income Tax as Presenting Officer. Finally on 14.06.2007, the Enquiry Officer submitted his report wherein the charges levelled against the applicant were not proved. Vide a note dated 12.03.2008, respondent no. 3 (Central Vigilance Commission) advised for imposition of a suitable major penalty upon the applicant after proving the charges in part. It is on the basis of the above advice dated 12.03.2008 that the competent authority issued office memo dated 22.05.2008 requiring the applicant to furnish his representation/comments on Inquiry report, disagreement note and CVC advice. Thereafter the applicant submitted a representation on 16.06.2011 highlighting the erroneous approach of the CVC as well as the Competent Authority in issuing the memo dated 22.05.2008. Under the garb of pendency of the proceedings, the applicant was not considered for promotion to the post of Additional Commissioner of Income Tax, whereas his junior had already been promoted as such in the year 2005. When no decision was taken by the authorities on the pending inquiry, the applicant was forced to approach the Principal Bench of this Tribunal by filing O.A No. 403/2012 which was disposed of in limine on 07.02.2012 with a direction to respondent-Disciplinary Authority to consider the objections raised by the applicant and in case any adverse order is passed against him, it was observed, further in continuity that, it would be open for him to challenge the same by filing a fresh O.A. Advance Career Training Program of IRS officer of the rank of Additional CITs and JCITs was held in the year 2012 but the applicant was not deputed for the said course. It is submitted that applicant sought information under RTI Act from the respondents as to whether charge sheet issued to him had been got approved from the Competent Authority i.e Finance Minister or not? He was informed vide letter dated 05.03.2012 that charge sheet was infact not approved by the Finance Minister but it was approved by the DCIT(V)/Chief Vigilance Officer (CVO), only.
3. In support of his prayer for quashing of the charge sheet and consequential action based thereupon, the applicant has taken the legal grounds, which inter-alia, read as follow:
I. Under Rule 14(3) on CCS (CCA) Rules 1965, the charge sheet could be issued by the Disciplinary Authority only but herein the charge sheet was approved by DG (IT)/CVO, instead of the competent authority i.e. Finance Minister, Government of India which is without jurisdiction and all consequential inquiry proceedings are vitiated as such the charge sheet liable to be quashed and set aside.
II. Under the provision of Section 136 of Income Tax Act, the applicant had performed only quasi-judicial (judicial) functions and the applicant enjoys the protection from any departmental proceedings/prosecution in pursuance to the provisions of Section 293 of Income Tax Act. The bona-fide clerical errors were duly rectified under the provisions of Section 154 of the Act. Under the settled law, if the statutory protection from prosecution is available, then the applicant could not be charge sheeted.
III. The Enquiry officer has positively recorded in the report that the mistake occurred in concluding part of the assessment orders on the part of the applicant was only a bona-fide arithmetical error and prosecution could not bring on record even an iota of evidence to prove that either the action of the applicant was mala-fide or that he conferred any undue benefit to the assessee. And the bona-fide clerical/arithmetical error can be rectified under Section 154 of the Act. Therefore, on this ground, he cannot be charge sheeted.
IV. It is also settled law that consultation with UPSC/ CVC is not mandatory but directory in nature under the statutory Rules. The advice of UPSC/CVC is not binding on the Disciplinary Authority, who can form to an independent conclusion based on the evidence lead by the prosecution. The applicant has been exonerated by the enquiry officer, therefore, the impugned show cause notice along with disagreement note passed by CVC/UPSC is contrary to the settled law. Thus, same are liable to be set aside.
4. In pursuance to notice, the respondents contested the claim of the applicant by filing a detailed reply wherein they have taken a preliminary objection that the instant O.A deserves to be dismissed as same is directed against a show cause notice only and no final order prejudicial to the right of the applicant has yet been passed, therefore, no cause of action has arisen in favour of the applicant. It is also stated that there is no real cause for grievance to the applicant at this stage as the disciplinary proceedings under challenge have not been finalized as yet nor any penalty has been imposed upon the applicant. Therefore, on this ground alone, the instant O.A may be dismissed. In this regard, they place reliance upon the judgment passed by the Honble Supreme Court in case of State of Uttar Pradesh Vs. Brahm Datt Sharma, (AIR 1987 SC 943). It is also submitted that rule 14 (3) of the CCS (CCA) Rules, 1965, nowhere mandates to obtain approval of the Disciplinary Authority for issuance of the charge sheet. It is only an approval for initiation of departmental proceeding, which has been taken from the competent authority and subsequent proceedings can be initiated by the authority lower than the disciplinary authority. With regard to the averment qua discharge of the quasi judicial functions by the applicant and that for same he cannot be charge sheeted, they place reliance upon the decision of the Honble Apex Court in the case of Union of India and Others Vs. K.K.Dhawan, 1993 AIR 1478, 1993 SCR (1) 296 (SC) to argue that even a quasi judicial authority is not immune from disciplinary proceedings.
5. The applicant has also filed a rejoinder contradicting the averments made by the respondents in the written statement
6. In rebuttal to the rejoinder filed by the applicant, the respondents have also filed an additional reply.
7. After exchange of pleadings and hearing the arguments, this court vide its order dated 05.03.2014 allowed the O.A on single plea raised at the hands of the applicant that charge sheet was not approved by the competent authority in terms of the latest judgment passed by the Honble Apex Court in case of Union of India & Ors. Vs. B.V.Gopinath. Subsequent to that, the respondents moved a Review Application No. 060/00007/2015 wherein the respondents had taken a categorical stand that though the Charge Sheet was issued but there was no approval by the competent authority i.e. Finance Minister at that time but subsequent to that Finance Minister on 09.01.2014 had given ex-post-facto sanction for the charge-sheet dated 02.01.2014, therefore, plea advanced by the applicant on the basis of which O.A was allowed and charge sheet was quashed required review.
8. After noticing the contention of the learned counsel for the Review applicant and the arguments advanced by the learned counsel for the parties, the RA was allowed vide its order dated 17.07.2015 and order dated 05.03.2014 recalled and O.A was restored to its original number. Order so passed reads as under:-
1. The present Review Application has been filed by the respondents in the Original Application seeking review of the order dated 5.3.2014 whereby the Original Application was allowed and charge-sheet dated 2.1.2004 was quashed and set aside in view of law laid down by Honble Apex Court in the case of Union of India & Others B.V. Gopinath, JT 2013 (12) SC 392 as the charge sheet had not been approved by the concerned disciplinary authority at that time. A liberty was given to the respondents to proceed in the matter as per law laid down in the case of B.V. Gopinath (supra).
2. The ground of challenge is that the Finance Minister on 9.1.2014 had given ex-post-facto sanction for the charge-sheet dated 2.1.2014, therefore, the Original Application cannot be allowed on the principles laid down in the case of B.V. Gopinath (supra). They also rely upon decision in the case of S. Natraj Vs. State of Karnataka, 1993 Supp. (4) SCC 595, to claim that review may be allowed.
3. Mr. K.K. Thakur, learned counsel for the review applicants submitted that there was no mention in reply to the Original Application or in the additional affidavit filed by authorities that approval indeed had been granted by the competent authority to the charge-sheet. However, when record was produced, the approval was very much in the file and as such the review plea merits acceptance.
4. Upon notice, Mr. G.S.Bal, Senior Advocate assisted by Mr. A.D.S. Bal, Advocate entered appearance for the applicant in O.A. / respondent in R.A. He submitted that the applicants in R.A. did not plead this at the time of final hearing and being the solitary contention at the hands of the applicant in O.A. the Court allowed this O.A. after recording a finding that there is no approval by the Minister in Charge for issuance of charge-sheet. He submitted that approval to charge-sheet cannot be granted retrospectively as charge sheet is dated 2.1.2004 and the alleged approval has come to be granted only on 9.1.2004 and it cannot be related back to 2.1.2004. He submitted that numbers of grounds were raised in the Original Application but the O.A. was allowed only on the ground that charge sheet had not been approved by competent authority. However, he very graciously made a statement that let the R.A. be allowed and O.A. be heard and decided on merit on the grounds raised in the Original Application. Learned counsel for the review applicants has no objection to the suggested course of action.
5. We have given our thoughtful consideration to the entire matter.
6. It is noticed from the interlocutory orders that we had granted the respondents time to file affidavit as to why attempt was not made to bring the aforesaid approval of the Finance Minister to the charge-sheet on 9.1.2014 to the notice of the Tribunal in time when the solitary contention raised at the hand of the applicant was that the charge-sheet had not been approved by the competent authority and thus stood invalidated. However, no such clarification in the form of affidavit has come about. Even number of cases were decided against the respondents on the same issue by placing reliance upon decision in the case of B.V. Gopinath (supra).
7. Be that as it may, in view of the consensual arrangement between the parties that this Review Application be allowed and the O.A. be re-heard and disposed of on merits, we review our order dated 5.3.2014 and Original Application is restored to its original number without prejudice to the right of the applicant to pose a challenge to the legality of the sanction granted on 9.1.2014 to a charge-sheet which was issued on 2.1.2014, on whatever grounds available to him.
9. It is in this background that we proceeded to hear learned counsel for the parties.
10. Learned Senior Counsel for the applicant submits that the perusal of the charges and the imputations in support thereof would show that the same relate to his functioning as an Assessing Officer, discharging quasi judicial function, with respect to certain assessment orders passed by him relating to some persons/ companies. The same cannot be subject matter of a charge-sheet. He would further submits that if an officer is performing judicial or quasi judicial function, disciplinary action should be taken with utmost caution and with proper application of mind. In the present case, he would submit the applicant was exonerated by the Enquiry Officer by holding that charges were not proved and at the best, omission can be termed as an arithmetical mistake, but the disciplinary authority without applying his independent mind acted blinding upon the CVC advice and disagreed with the inquiry report illegally. He also argued that the approval given by the Finance Minister/Disciplinary Authority was not proper as the same was without considering the law in right perspective. He relies upon the judgments reported as (2007) 4 SCC 247 Ramesh Chander Singh vs. High Court of Allahabad & Anr., (2007) 4 SCC 568 Inspector Prem Chand vs. Govt. of NCT of Delhi, (2006) 5 SCC 680 U.O.I & Ors. vs. Duli Chand, (2001) VI AD SC 687 P.C.Joshi vs. State of U.P. & Ors., (1999) 7 SCC 409 Zunjarrao Bhikaji Nagarkar vs. U.O.I. & Ors., (1993) 2 SCC 56 K.K.Dhawan vs. U.O.I, order dated November 24, 2010 passed by W.P.(C) No.3209/2012 Page 10 of 27 this Court in W.P.(C) 5013/2010 UOI & Ors. vs. Harsh Vardhan Chauhan, order dated March 20, 2009 in W.P.(C) 7054/2009 UOI & Ors. vs. Arindam Lahiri and in case Union of India & Ors. Vs. B.V.Gopinath etc.
11. Per contra, learned counsel for the respondents submitted that in view of the settled proposition of law, no writ or application lies against a show cause notice/charge sheet unless prejudice is shown to have been caused to the delinquent officer. Since the applicant has not alleged any prejudice caused to him by virtue of the charge sheet not having been approved by the disciplinary authority, the charge sheet cannot be interfered with. In support thereof, reliance was placed on State of Uttar Pradesh Vs. Brahm Dutt Sharma & Anr., AIR 1987 SC 943, Executive Engineer, Bihar State Housing Board Vs. Ramesh Kumar Singh & Ors. (1996) 1 SCC 327, Special Director & Anr. Vs. Mohad. Ghulam Ghouse & Anr. AIR 2004 SC 1467 and Union of India Vs. Kunisetty Satyanarayana, (2006) 12 SCC 28. He submitted that in view of the ratio laid down in case of U.O.I & Ors. Vs. K.K. Dhawan 1993(I) AISLJ 107, the quasi judicial authority can be charge sheeted for the act while performing his duty for his negligence performance of duties.
12. We have given our thoughtful consideration to the entire matter with the able assistance of learned counsel for both sides.
13. Though the applicant has taken various ground to challenge the impugned order in the O.A including charge-sheet having been issued without approval of competent authority, but we are considering only those grounds upon which arguments were advanced by the Senior Counsel during course of hearing including whether advice given by Central Vigilance Commission is binding upon the respondents or not. From a conjugative perusal of the pleading and the arguments advanced, the following questions of law arise for our consideration:
(1) Whether a challenge to change sheet / show-cause is maintainable?
(2) Whether charge-sheet could have been issued to the applicant if the charges relate to the assessment orders passed by him in performance of quasi judicial function?
(3) Whether or not negligence constitutes a misconduct?
14. Since the respondents have raised a preliminary objection that the present O.A is not maintainable in the present form as the applicant has impugned the charge sheet and subsequent proceedings at infancy stage, therefore, we, at first instance, proceed to decide the first poser.
15. We are aware that the Tribunals power are limited in interfering at the stage of charge memo/show cause notice, but when the charge memo has been issued against a quasi judicial authority while discharging quasi judicial function, the Tribunal has power to interfere with such charge memo. The Tribunal cannot interfere only if there is ulterior motive, malafide intention and arbitrary action or allegation of dishonesty/corrupt motive in taking such decisions. In the absence of such ingredients, the Tribunal has the authority to even interfere in a charge memo/show cause notice and quash the same.
16. In the above context, we place reliance on the judgment of the Hon'ble Apex Court in Union of India vs. Kunisetty Satyanarayana (2006(12) SCC-28). In the said case, while allowing appeal the Honble Supreme Court considered the issue whether in writ petition quashing of charge sheet or show cause notice is a discretionary remedy and if so, whether such discretion should not ordinarily be exercised by quashing a show cause notice or charge- sheet as the same does not infringe the right of anyone, but held that in some very rare and exceptional cases the High Court can quash a charge sheet or show-cause notice, if it is found, to be wholly without jurisdiction or for some other reason. The relevant para reads as under:-
13. It is well settled by a series of decisions of this Court that ordinarily no writ lies against a charge sheet or show-cause notice vide Executive Engineer, Bihar State Housing Board vs. Ramdesh Kumar Singh and others JT 1995 (8) SC 331, Special Director and another vs. Mohd. Ghulam Ghouse and another AIR 2004 SC 1467, Ulagappa and others vs. Divisional Commissioner, Mysore and others 2001(10) SCC 639, State of U.P. vs. Brahm Datt Sharma and another AIR 1987 SC 943 etc.
14. The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge-sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. It is well settled that a writ lies when some right of any party is infringed. A mere show-cause notice or charge-sheet does not infringe the right of any one. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance.
15. Writ jurisdiction is discretionary jurisdiction and hence such discretion under Article 226should not ordinarily be exercised by quashing a show-cause notice or charge sheet.
16. No doubt, in some very rare and exceptional cases the High Court can quash a charge-sheet or show-cause notice if it is found to be wholly without jurisdiction or for some other reason if it is wholly illegal. However, ordinarily the High Court should not interfere in such a matter.
17. Reliance is also placed upon : State of U.P. v. Brahm Datt Sharma, AIR 1987 SC 943;Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh & Ors., (1996) 1 SCC 327; Ulagappa & Ors. v. Div. Commr., Mysore & Ors., AIR 2000 SC 3603 (2); Special Director & Anr. v. Mohd. Ghulam Ghouse & Anr., AIR 2004 SC 1467.
18. In the light of the above judicial pronouncements one can say that it is not the rule of thumb that no writ lies against charge sheet/show cause notice at all. It is to be entertained as per the facts and circumstances of the case as exceptions are there as discussed by their Lordships in the aforesaid paras. In this case those exceptions are indeed available inasmuch as the applicant was charge-sheeted for quasi judicial function without there being any element of malafide intentions. Thus, an Original Application in such a situation would be maintainable before this Tribunal. Accordingly, in view of the above cited law examined in the facts of this case, first poser is decided in affirmative.
19. Before deciding the second poser, we would like to discuss the law on the subject qua initiating of departmental proceedings against an officer for discharge of quasi judicial functions. The Honble Supreme Court in K.K.Dhawan's case (supra) has laid down the circumstances, where disciplinary proceedings can be initiated against an officer, who is discharging quasi judicial functions. The same are enumerated as under:
(i) Where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion of 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, the bribe may be.
20. The Honble Supreme Court in the said judgment vide para No.29 has also observed as under:
29. The instances above catalogued are not exhaustive. However we may add that for a mere technical violation or merely because the order is wrong and the action not falling under the above enumerated instances disciplinary action is not warranted. Here we may utter a word of caution. Each case will depend upon the facts and no absolute rule can be postulated.
21. Subsequently the ratio laid down in case of K.K.Dhwan (Supra) was considered in the case of Zunjarrao Bhikaji Nagarkar Vs. Union of India and Others 1999 -7-SCC-409 . Though, said case relates to the Central Excise, but the issue of quasi-judicial authority and quasi judicial functions under Central Excise Act and under Income Tax Act are the same or similar. Under Central Excise Rules, 1944 Rule173q; Section 11ac of the Central Excise Act, 1944 and Rule14 of Central Civil Services (Classification Control And Appeal) Rules, 1965 were involved. Two principal issues arose for the consideration before the Lordships of the Honble Supreme Court: (1) if levy of penalty under Rule 173-Q was obligatory and (2) was there enough background material for the Central Government to form a prima facie opinion to proceed against the officer on the charge of misconduct on his failure to levy penalty under Rule 173-Q. Relevant issue for the instant OA is about the negligence amounting to misconduct. The same was addressed by the Apex Court in the aforesaid judgment. Before we dwell on this specific issue, it is appropriate to provide brief factual background of the case. The Appellant Zunjarrao Bhikaji Nagarkar was posted as Collector of Central Excise, Nagpur in the year 1995. [Collector is now called Commissioner]. He was served with a memorandum dated September 2, 1997 under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965 informing him that the President proposes to hold an inquiry against him on the allegation that he favoured M/s. Hari Vishnu Packaging Ltd., Nagpur (assessee) by not imposing penalty on it under Rule 173-Q of the Central Excise Rules, 1944 when he passed an order in Original No. 20/95 dated March 2, 1995 holding that the assessee had clandestinely manufactured and cleared the excisable goods wilfully and evaded the excise duty and had ordered confiscation of the goods. The appellant approached Mumbai Bench of this Tribunal challenging the proposed inquiry in OA No. 250 of 1998 on March 18, 1998. While admitting the application the Tribunal granted interim relief and stayed the disciplinary proceedings against the appellant. However, the OA was dismissed by order dated August 12, 1998 with the result the interim order stood vacated. Immediately thereafter the appellant filed a writ petition in the Bombay High Court, (WP No. 4717 of 1998) which was dismissed in limine by a Bench of the High Court by order dated September 7, 1998 and the appellant assailed the same in Hon'ble Supreme Court in appeal by filing Special Leave Petition and while issuing notice on the petition, interim stay was granted. Section 33 of the Act gives powers to Central Excise authorities to adjudicate. Under this Section 'where by the rules made under the Act anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged without limit, by a Commissioner of Central Excise'. In exercise of powers conferred by Section 33 of the Act the appellant held adjudication proceedings against the assessee and two others. A show-cause notice was issued to the assessee on four grounds asking him to show-cause as to why central excise duty of Rs.4,81,950/- be not recovered from him under Rule 9(2) read with proviso to Section 11-A of the Act and why not 95,000 numbers and 25,500 numbers of HDPE bags seized in transit and from its factory premises be confiscated and why penalty be not imposed on it under Rule 173-Q of the Rules. After examining the evidence on record and hearing the assessee the appellant in Original No. 20 of 1995 passed the order (i)confirming the excise duty of Rs.3,57,000/- on 25,500 Nos. of HDPE Woven sacks removed by Noticee-1 clandestinely under Rule 9(2) of the Central Excise Rules, 1994 read with proviso to Section 11-A of the CESA, 1944 (ii) confiscating 95,000 bags cleared clandestinely by Noticee-1 and seized on 16-1-1994 and as the goods had been released provisionally on execution of bond for the full value of the goods and cash security of Rs. 1 Lakh and as the goods were not available for confiscation, Rs. 10,000/-were appropriated in lieu of confiscation; and (iii) ordered confiscation of 'L' shaped 25,500 Nos. of HDPE woven sacks valued at Rs. 1, 27,500/- under Rule 173Q of C. Ex. Rules, 1944. By however, allowing the goods to be redeemed on payment of Rs. 10,000/- Under Section 35-B of the Act an appeal lies to the Customs, Excise and Gold (Control) Appellate Tribunal (Appellate Tribunal) against a decision or order passed by the Commissioner of Central Excise as an adjudicating authority. Powers have been conferred on the Central Board of Excise and Customs (Board) under Section 35-E of the Act to pass certain orders. By order dated February 26, 1996 made under Section 35-E of the Act, Board directed the appellant to file appeal to the Appellate Tribunal to determine whether his order in Original No. 20/95 dated March 20, 1995 against the assessee was correct, legal and proper and whether the appellant ought to have imposed penalty. Accordingly appeal was filed before the Appellate Tribunal which, it was stated to be pending. In answer to these pleas raised by the appellant Mr. Harish Chandra, learned senior Advocate for the Union of India submitted that there was sufficient material to proceed against the appellant and that the CAT and the High Court were right in not interfering in the disciplinary proceedings at the very threshold. He said the appellant would have the opportunity to defend himself in the proceedings which have been initiated against him. The appellant having failed in the CAT and High Court approached the Apex Court in the said civil appeal. The law laid by the Honble Apex Court in the said case is worth reproduction below:
40. When we talk of negligence in a quasi judicial adjudication, it is not negligence perceived as carelessness inadvertence or omission but as culpable negligence. This is how this Court in State of Punjab v. Ram Singh Ex-Constable ((1992) 4 SCC 54) : (1992 AIR SCW 2595 : AIR 1992 SC 2188) interpreted "misconduct" not coming within the purview of mere error in judgment, carelessness or negligence in performance of the duty. In the case of K. K. Dhawan (1993 (2) SCC 56) : (1993 AIR SCW 1361 : AIR 1993 SC 1478 : 1993 Lab IC 1028), the allegation was of conferring undue favour upon the assessees. It was not a case of negligence as such. In Upendra Singh's case (1994 (3) SCC 357) : (1994 AIR SCW 2777), the charge was that he gave illegal and improper directions to the assessing officer in order to unduly favour the assessee. Case of K. S. Swaminathan (1996 (11) SCC 498), was not where the respondent was acting in any quasi judicial capacity. This Court said that at the stage of framing of the charge the statement of facts and the charge-sheet supplied are required to be looked into by the Court to see whether they support the charge of the alleged misconduct. In M. S. Bindra's case (1998 (7) SCC 310) : (1998 AIR SCW 2918 : AIR 1998 SC 3058 : 1998 Lab IC 3491) where the appellant was compulsorily retired this Court said that judicial scrutiny of an order imposing premature compulsory retirement is permissible if the order is arbitrary or mala fide or based on no evidence. Again in the case of Madan Mohan Choudhary (1999) 3 SCC 396 : (1999 AIR SCW 648 : AIR 1999 SC 1018), which was also a case of compulsory retirement this Court said that there should exist material on record to reasonably form an opinion that compulsory retirement of the officer was in public interest. In K. N. Ramamurthy's case (1997) 7 SCC 101 : (1997 AIR SCW 3677 : AIR 1997 SC 3571), it was certainly a case of culpable negligence. One of the charges was that the officer had failed to safeguard Government revenue. In Hindustan Steel Ltd.'s case (AIR 1970 SC 253), it was said that where proceedings are quasi judicial penalty will not ordinarily be imposed unless the party charged had acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. This Court has said that the penalty will not also be imposed merely because it is lawful so to do. In the present case, it is not that the appellant did not impose penalty because of any negligence on his part but be said it was not a case of imposition of penalty. We are, however, of the view that in a case like this which was being adjudicated upon by the appellant imposition of penalty was imperative. But then, there is nothing wrong or improper on the part of the appellant to form an opinion that imposition of penalty was not mandatory. We have noticed that Patna High Court while interpreting Section 325, I.P.C. held that imposition of penalty was not mandatory which again we have said is not a correct view to take. A wrong interpretation of law cannot be a ground for misconduct. Of course it is a different matter altogether if it is deliberate and actuated by mala fides.
41. When penalty is not levied, the assessee certainly benefits. But it cannot be said that by not levying the penalty the officer has favoured the assessee or shown undue favour to him. There has to be some basis for the disciplinary authority to reach such a conclusion even prima facie. Record in the present case does not show if the disciplinary authority had any information within its possession from where it could form an opinion that the appellant showed 'favour' to the assessee by not imposing the penalty. He may have wrongly exercised his jurisdiction. But that wrong can be corrected in appeal. That cannot always form basis for initiating disciplinary proceedings for an officer while he is acting as quasi judicial authority. It must be kept in mind that being a quasi judicial authority, he is always subject to judicial supervision in appeal.
42. Initiation of disciplinary proceedings against an officer cannot take place on an information which is vague or indefinite. Suspicion has no role to play in such matter. There must exist reasonable basis for the disciplinary authority to proceed against the delinquent officer. Merely because penalty was not imposed and the Board in the exercise of its power directed filing of appeal against that order in the Appellate Tribunal could not be enough to proceed against the appellant. There is no other instance to show that in similar case the appellant invariably imposed penalty.
43. If, every error of law were to constitute a charge of misconduct, it would impinge upon the independent functioning of quasi judicial officers like the appellant. Since in sum and substance misconduct is sought to be inferred by the appellant having committed an error of law, the charge-sheet on the face of it does not proceed on any legal premise rendering it liable to be quashed. In other words, to maintain any charge-sheet against a quasi judicial authority something more has to be alleged than a mere mistake of law, e.g., in the nature of some extraneous consideration influencing the quasi judicial order. Since nothing of the sort is alleged herein the impugned charge-sheet is rendered illegal. The charge-sheet, if sustained, will thus impinge upon the confidence and independent functioning of a quasi judicial authority. The entire system of administrative adjudication where under quasi judicial powers are conferred on administrative authorities, would fall into disrepute if officers performing such functions are inhibited in performing their functions without fear or favour because of the constant threat of disciplinary proceedings.
44. Considering whole aspects of the matter, we are of the view that it was not a case for initiation of any disciplinary proceedings against the appellant. Charge of misconduct against him was not proper. It has to be quashed.
22. In the case reported as (2006) 5 SCC 680 Union of India and Ors. vs. Duli Chand, the Lordships have considered the same issue and after considering the law on the subject recorded their findings in paras Nos.5 to 9, which read as under :
5. The law on the subject was considered in extenso in the three-Judge Bench decision of Union of India vs. K.K.Dhawan wherein it was noted that the view that no disciplinary action could be initiated against an officer in respect of judicial or quasi-judicial functions was wrong. It was further said that the officer who exercises judicial or quasi-judicial powers acting negligently or recklessly could be proceeded against by way of disciplinary action. The Court listed six instances when such action could be taken: (SCC p.67, para 28) (i) Where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty; (ii) If there is prima facie material to show recklessness or misconduct in the discharging of his duty; (iii) If he has acted in a manner which is unbecoming of a government servant; (iv) If he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers; (v) If he had acted in order to 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?.
6. The Court, however, made it clear that ultimately the matter would have to depend upon the facts of a particular case. The present case would fall squarely within the fourth instance listed above.
7. The decision in K.K.Dhawan case was considered by this Court and followed in Govt. Of T.N. vs. K.N.Ramamurthy. In that case the Tribunal had set aside the order imposing punishment on an officer who had been discharging judicial functions. The Court was of the view that the Tribunal's action was contrary to the several judgments of this Court and the settled law on the question.
8. In 1999 another Bench of two Judges in Zunjarrao Bhikaji Nagarkar considered and referred to these earlier decisions. However, the Court appears to have reverted back to the earlier view of the matter where disciplinary action could be taken against an officer discharging judicial functions only where there was an element of culpability involved. Since in that particular case there was no evidence whatsoever that the employee had shown any favour to the assessee to whom refund had been made, it was held that the proceedings against him would not lie. In fact the Court set aside the disciplinary proceedings at the stage of the issuance of charge-sheet to the charged officer.
9. In our opinion, Nagarkar case was contrary to the view expressed in K.K.Dhawan case. The decision in K.K.Dhawan being that of a larger Bench would prevail. The decision in Nagarkar case therefore does not correctly represent the law. Inasmuch as the impugned orders of the Tribunal and the High Court were passed on the law enunciated in Nagarkar case this appeal must be allowed. The impugned decisions are accordingly set aside and the order of punishment upheld. There will be no order as to costs.
23. Even the Honble Delhi High Court has considered the similar issue in the case of Union Of India & Others vs. Ms. Dolly Saxena reported as 93 (2001) DLT 124, 2001 (60) DRJ 43. The relevant portion reads as under:-
1. :Short question involved is whether a Quasi Judicial Authority could be subjected to disciplinary proceedings under Service Conduct Rules (SCR) on a mere charge of alleged negligence and recklessness in passing an adjudicatory order.
2. Respondent a Collector of Customs and Central Excise at the relevant time, was to adjudicate the cases under Central Excise Act. She is charged to have dropped proceedings against the assessed M/s J.K.Synthesis accused of evasion of customs duty of 1.21 crores or so. a charge sheet dated 28.1.1999 was issued to her charging her with negligence and recklessness in discharge of duties and contravening Rule 3 of Conduct Rules, 1964. She made representations against this but failed. She then filed OA No.2199/99 claiming that she could not be subjected to disciplinary proceedings on a charge of misconduct while exercising her quasi judicial functions. Petitioner opposed this on the plea that charge sheet could not be questioned at the threshold and that disciplinary proceedings could be taken for her negligence in the discharge of her duty causing loss to public revenue.
3. Tribunal, on consideration of the matter, examined Articles of charges and found that these related to her alleged recklessness and negligence only and did not charge her of any other misconduct for showing favor to the assesses. It also went a step further and dabbled in touching the correctness of the charges. It accordingly quashed the charge sheet placing reliance on the Supreme Court Judgment in Nagarkar Vs. UOI (1997) 7 SCC 409 holding that mere charge of negligence was not enough to subject a judicial or quasi judicial Authority to disciplinary proceedings for passing a wrong adjudicatory order.
4. Petition challenges this on the ground that Tribunal was firstly incompetent to quash the charge-sheet and that its order ran counter to the law laid down by Apex Court in UOI & others Vs. K.K.Dhawan holding that a quasi judicial Authority could be subjected to disciplinary proceedings on a charge of negligence or reckless in the discharge of quasi judicial.
5. There is no dispute with the proposition that Tribunal could not examine the truth or otherwise of the charges in a disciplinary proceedings and quash the charge sheet for that at the threshold. In the present case Tribunal has touched the correctness of charges at places which may not sustain but that does not have any crucial importance for the outcome of this matter which required to be decided on a harmonious reconciliation of two judgments of the Supreme Court in Dhawan's and Nagarkar's case. In the first case Apex Court formulated a list of cases, though not exhaustive where disciplinary proceedings could be taken against officers while exercising quasi judicial powers on the premise that such a situation involved the conduct of an officer in the discharge of his/her duties and not the error or illegally committed while exercising quasi judicial powers. The list of such cases includes:
(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 favor a party;
(vi) if he had been actuated by corrupt motive, however small the bribe may be.
6. In Nagarkar's case however the court crystalised it further to hold that charge of mere negligence in exercise of quasi judicial power would not constitute a misconduct to warrant a disciplinary action unless it was accompanied by a further charge of undue favor shown by the officer in dealing with the case. The Court noticed its judgment in Dhawan's case and (40) xxxxxxxxxxxx xxxxxxxxxxx (43). Xxxxxxxxxxx xxxxxxxxxx
7. It is true that in the list of cases given in Dhawan's case a charge of negligence could also sustain a charge sheet against the quasi judicial Authority but it was required to be read in the facts of that case where the further charge was that officer had shown undue favor in the matter. This is how it was distinguished by the court in Nagarkar's case laying down that there must be something more alleged than a mere negligence flowing from a mistake of law to sustain the charge sheet against the quasi judicial Authority.
8. We respectfully follow the ratio and reasoning of the Supreme Court Judgment to hold a mere charge of negligence or recklessness against an officer in passing an adjudicatory order in exercise of quasi judicial functions unaccompanied by any further charge of extraneous considerations or quid pro quo in passing such order would not constitute a misconduct under the relevant rules to justify disciplinary proceedings against the quasi judicial Authority. The reason and rationale for this is not far to seek and is adequately brought out in the judgment supra.
9. This petition accordingly fails and is dismissed.
24. Further the Honble Supreme Court in the case Ramesh Chander Singh vs. High Court of Allahabad and Anr. reported as (2007) 4 SCC 247 has held as under:
12. This Court on several occasions has disapproved the practice of initiation of disciplinary proceedings against officers of the subordinate judiciary merely because the judgments/orders passed by them are wrong. The appellate and revisional courts have been established and given powers to set aside such orders. The higher courts after hearing the appeal may modify or set aside erroneous judgments of the lower courts. While taking disciplinary action based on judicial orders, High Court must take extra care and caution.
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17. In Zunjarrao Bhikaji Nagarkar v. Union of India, (1999) SCC 409, this Court held that wrong exercise of jurisdiction by a quasi judicial authority or mistake of law or wrong interpretation of law cannot be the basis for initiating disciplinary proceeding. Of course, if the Judicial Officer conducted in a manner as would reflect on his reputation or integrity or good faith or there is a prima facie material to show recklessness or misconduct in discharge of his duties or he had acted in a manner to unduly favour a party or had passed an order actuated by corrupt motive, the High Court by virtue of its power under Art. 235 of the Constitution may exercise its supervisory jurisdiction. Nevertheless, under such circumstances it should be kept in mind that the Judges at all levels have to administer justice without fear or favour. Fearlessness and maintenance of judicial independence are very essential for an efficacious judicial system. Making adverse comments against subordinate judicial officers and subjecting them to severe disciplinary proceedings would ultimately harm the judicial system at the grass root level.
25. Again in the case Ajit Kumar Singh Vs. Union of India WP(C) No 3209/2012 decided on 5.8.2013, the Honble Delhi High Court considered the same issue. After considering the entire law on the subject held that quasi judicial authority cannot be subjected to departmental proceeding except in those case where case falls under exception as laid down in the case of K.K.Dhawan (supra). This issue has also been considered by various coordinate benches of this Tribunal in a number of cases and they have quashed the charge sheets therein on the ground that one cannot be charge sheeted for quasi judicial functions. The disciplinary proceedings against a quasi judicial officer on the allegations relating to exercise of functions and duties, is barred in law. Our view also find, support from judgment of the Apex Court in the case of Union of India Vs. R.K. Desai 1993 (2) SCC 49; S. Rajguru Vs. Union of India OA No.2815/2012 decided by the Principal Bench on 01.02.2013, the order passed by Allahabad Bench of this Tribunal in case of Dr. Sudhakar Tiwari Vs. Union of India decided on 02.02.2012, judgment passed by the Honble Allahabad High Court in case of Sukhdev Steel Cutters & Ors. Vs. Honble Sr. Lalta Prasad, 2006(2) AWC 1119.
26. The need for protection from disciplinary proceedings for act done in bonafide performance of judicial / quasi judicial functions has been reiterated by Honble Allahabad High Court in Sukhdev Steel Cutters Vs. Honble Sri Lalta Prasad, 2006 (2) AWC 1119. The Honble Allahabad High Court has held that Such a wide immunity has been conferred on judicial orders, so that they may act fearlessly, impartially and with full sense of security. In case of abuse of judicial powers, remedy is provided on the executive side preventing them to exercise such powers any more. The protection so granted does not protect them from disciplinary control by the superior authorities. In para 23 the Honble Court has held that The protection may extend even to an officer having an obligation to perform Quasi-judicial functions.
27. The case of Ashish Abrol Vs. Union of India & Ors. (O.A No. 736/2010) decided on 23.04.2010 by the Principal Bench of this Tribunal has been heavily relied upon by the applicant. The applicant therein, Ashish Abrol was also an officer of the Indian Revenue Service (IRS), (Income Tax) who was charge sheeted vide memorandum dated 12.02.2004 for the act in furtherance of his quasi judicial duties as Deputy Commissioner of Income Tax and proceedings were quashed. For ready reference, the charges levelled against him are reproduced as below:-
That the said Shri Ashish Abrol, while working as Deputy Commissioner of Income-tax, Circle-1, Margao, allowed incorrect deduction u/s.80HHC while completing assessment in the case of M/s Narcissus Investments Private Limited, Vasco, Goa, for the Asst. Year 1995-96, thus causing revenue loss to the extent of Rs.91,65,264/- and conferring consequent benefit upon the assessee.
By his above act, Sh. Abrol failed to maintain absolute integrity and devotion to duty and thereby violated the Rules 3(1) (i) and 3(1) (ii) of the CCS (Conduct) Rules, 1964.
Article II That during the aforesaid period and while functioning in the aforesaid office, the said Shri Ashish Abrol with ulterior motive abandoned the investigation which he had started, on the right lines, in the case of M/s Narcissus Investments Private Limited, Vasco, Goa for the Asst. Year 1995-96.
By the above act, Sh. Abrol failed to maintain absolute integrity and devotion to duty and thereby violated the Rules 3(1) (i) and 3(1) (ii) of the CCS (Conduct) Rules, 1964. Article III That during the aforesaid period and while functioning in the aforesaid office, the said Shri Ashish Abrol completed the assessment in the case of M/s Narcissus Investments Private Limited, Vasco, Goa for the Asst. Year 1995-96 without charging capital gains on the sale of shares, and thus conferred undue benefit upon the assessee.
By his above act, Sh. Abrol failed to maintain absolute integrity and devotion to duty and thereby violated the Rules 3 (1) (i) and 3(1) (ii) of the CCS (Conduct) Rules, 1964.
28. The Principal Bench of this Tribunal after examining the entire law on the subject came to conclusion which reads as under:-
We have already quoted the Articles of charge in paragraph 3 of this order. The inquiry officer has held and the disciplinary authority in his note of disagreement has failed to repel that the charge regarding failure to maintain absolute integrity has not been proved. In regard to the second charge, it has been held that the Applicant acting with ulterior motive has not been proved and that the Applicant did not abandon the investigation. In regard to the third charge the view of the inquiry officer is that the Revenue has not been prejudicially affected by the Applicant not charging capital gains on the transfer of shares and instead assessing it as income from business. These have not been refuted in the note of disagreement. There is not even a whisper in the note of disagreement as to how lack of integrity, ulterior motive, abandoning the inquiry midway and giving undue benefit have been inferred. There is no material before the disciplinary authority to substantiate these charges. Now there is no poison in the fangs of the charges. The Revenue and the Applicant have difference of opinion on a legal point and its interpretation. There is no prima facie material to show recklessness. The action of officer has not been shown to be such as to reflect on his integrity, Showing undue favour to party has not been established. He has not been shown to have acted negligently. No corrupt motive has been proved on the Applicants part in the inquiry. It cannot merely be inferred from the fact that according to the Respondents, the order of assessment is wrong. As was held in Ramesh Chander Singh (supra), in the instant case also the order has been passed on cogent reasons. Furthermore, the note recorded by the Applicant in the file of assessment, as mentioned above, has not been made available. Merely because the internal audit has different views from the Applicant on the interpretation of law would not give rise to the charge of ulterior motives, giving undue benefits and lacking in integrity. The wrong interpretation of law, according to the Respondents would not be a ground for alleging misconduct, as held in Nagarkar (supra). The objections of the Respondents that Nagarkar (supra) may not be considered as it has been overruled in Duli Chand (supra) has been more than adequately answered in the judgment of the Honourable Delhi High Court and we need not labour the point any further.
20. On the basis of consideration of all the facts and circumstances of this case, as analysed above, we are of the considered view that this inquiry should not proceed any further and curtain should finally be drawn in this drama. We quash and set aside the Memorandum of charge dated 12.02.2004 and all the subsequent steps in the disciplinary proceedings. The Applicant would be eligible for consideration for promotion from the date his immediate junior was promoted on notional basis. There will be no orders as to costs.
29. This court has already decided a similar issue in case of R.L. Chhanalia Vs. U.O.I (O.A No. 509-PB-2008) wherein the applicant, therein was also charge sheeted for discharge of quasi judicial functions. This Court vide order dated 06.05.2010 allowed the O.A and charge sheet therein was quashed and set aside. The view taken by this court was also upheld by the Honble jurisdictional High Court in CWP No. 18563/2010 filed at the hands of the respondents by dismissing the writ petition vide order dated 12.10.2010.
30. Subsequently, in the case of Sh. B.B.Mohanty vs. Union of India OA No.1208/2013 decided on 31.3.2014 in which one of us (Mr Uday Kumar Verma, Member (A)) was a Member of the bench, also took similar view and quashed the charge sheet and subsequent proceedings on the same issue therein. The operative para reads as under:-
20. In view of the well settled legal position, we are of the considered view that the applicant as CIT (A) functioned as quasi-judicial authority and discharged quasi- judicial functions. Further, in the absence of any alleged link of the applicant with malafide motive, arbitrary action and question of his integrity, we opine that he is not liable to disciplinary action.
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28. Considering the totality of facts and circumstances of the case and guided by the law laid by the Honble Supreme Court, we are of the considered opinion that the applicant discharged the quasi-judicial function in the position of a quasi-judicial authority i.e. CIT (A). His action or error in law or mistake in law cannot be attracted to proceed against him treating the same as misconduct. As stated within, the law laid by the Honble Supreme Court is extremely clear and binding. He quasi-judicial authorities are to function independently without fear or favour. The fear of facing disciplinary action in case the decision goes against the Government cannot be brought in the mind of such quasi-judicial authorities. We are, therefore, of the considered opinion that the applicants action being of quasi-judicial nature and having acted as a quasi-judicial authority, his decisions in those four cases, wherein no malafide, arbitrariness or question of integrity has been raised, cannot be treated as misconduct.
31. In the backdrop of the above legal position, we are of the considered view that a person who is discharging quasi judicial function, cannot be subjected to disciplinary proceedings for an act which is done bonafidely in furtherance of his quasi judicial functions, in the absence of any malafide motive, arbitrary action and doubtful integrity in terms of exceptions as carved out by their Lordship in case of K.K. Dhawan (supra). Accordingly, second poser is decided in affirmative.
32. Now we proceed to deal with the third poser whether negligence constitutes a misconduct. This question has already considered by the lordships in the case of Union of India and others vs. J. Ahmed reported as (1992) SCC 286 the relevant finding reads as under:-
10. It would be appropriate at this stage to ascertain what generally constitutes misconduct, especially in the context of disciplinary proceedings entailing penalty.
11. Code of conduct as set out in the Conduct Rules clearly indicates the conduct expected of a member of the service. It would follow that that conduct which is blameworthy for the Government servant in the context of Conduct Rules would be misconduct. If a servant conducts himself in a way inconsistent with due and faithful discharge of his duty in service, it is misconduct [see Pierce v. Foster(1)]. A disregard of an essential condition of the contract of service may constitute misconduct [see Laws v. London Chronicle .(Indicator Newspapers) (2)]. This view was adopted in Shardaprasad Onkarprasad Tiwari v. Divisional Superintendent, Central Railway, Nagpur Division, Nagpur(1), and Satubha K. Vaghela v. Moosa Raza(2). The High Court has noted the definition of misconduct in Stroud's Judicial Dictionary which runs as under:
"Misconduct means, misconduct arising from ill motive; acts of negligence, errors of judgment, or innocent mistake, do not constitute such misconduct".
In industrial jurisprudence amongst others, habitual or gross negligence constitute misconduct but in Management, Utkal Machinery Ltd. v. Workmen, Miss Shanti Patnaik(3), in the absence of standing orders governing the employee's undertaking, unsatisfactory work was treated as misconduct in the context of discharge being assailed as punitive. In S. Govinda Menon v. Union of India(4), the manner in which a member of the service discharged his quasi judicial function disclosing abuse of power was treated as constituting misconduct for initiating disciplinary proceedings. A single act of omission or error of judgment would ordinarily not constitute misconduct though if such error or omission results in serious or atrocious consequences the same may amount to misconduct as was held by this Court in P. H. Kalyani v. Air France, Calcutta(5), wherein it was found that the two mistakes committed by the employee while checking the load-sheets and balance charts would involve possible accident to the aircraft and possible loss of human life and, therefore, the negligence in work in the context of serious consequences was treated as misconduct. It is, however, difficult to believe that lack of efficiency or attainment of highest standards in discharge of duty attached to public office would ipso facto constitute misconduct. There may be negligence in performance of duty and a lapse in performance of duty or error of judgment in evaluating the developing situation may be negligence in discharge of duty but would not constitute misconduct unless the consequences directly attributable to negligence would be such as to be irreparable or the resultant damage would be so heavy that the degree of culpability would be very high. An error can be indicative of negligence and the degree of culpability may indicate the grossness of the negligence. Carelessness can often be productive of more harm than deliberate wickedness or malevolence. Leaving aside the classic example of the sentry who sleeps at his post and allows the enemy to slip through, there are other more familiar instances of which a railway cabinman signals in a train on the same track where there is a stationary train causing headlong collision; a nurse giving intravenous injection which ought to be given intramuscular causing instantaneous death; a pilot overlooking an instrument showing snag in engine and the aircraft crashes causing heavy loss of life. Misplaced sympathy can be a great evil [see Navinchandra Shakerchand shah v. Manager, Ahmedabad Co- op. Department Stores Ltd.(1)]. But in any case, failure to attain the highest standard of efficiency in performance of duty permitting an inference of negligence would not constitute misconduct nor for the purpose of Rule 3 of the Conduct Rules as would indicate lack of devotion to duty.
12. The High Court was of the opinion that misconduct in the context of disciplinary proceeding means misbehaviour involving some form of guilty mind or mens rea. We find it difficult to subscribe to this view because gross or habitual negligence in performance of duty may not involve mens rea but may still constitute misconduct for disciplinary proceedings.
33. Again in the case of M. M. Malhotra Vs. Union of India reported as 2005 -8-SCC-351, it was held that the range of activities which may amount to acts which are inconsistent with the interest of public service and not befitting the status, position and dignity of a public servant are so varied that it would be impossible for the employer to exhaustively enumerate such acts and treat the categories of misconduct. It has, therefore, to be noted that the word "misconduct" is not capable of precise definition. But at the same time though incapable of precise definition, the word "misconduct" on reflection receives its connotation from the context, the delinquency in performance and its effect on the discipline and the nature of the duty. The act complained of must bear a forbidden quality or character and its ambit has to be construed with reference to the subject-matter and the context wherein the term occurs, having regard to the scope of the statute and the public purpose it seeks to serve."
34. In the light of the above, third poser is decided in affirmative as negligence cannot constitute misconduct per se unless same is infected with malafide intentions.
35. In view of the judicial pronouncement as enumerated above, now we proceed to examine the facts of the present case. Now our task is to find out whether the exceptions as laid down by the Honble Supreme Court and reiterated by the various Honble High Courts and also followed by the coordinate bench of this Tribunal gets attracted to facts of the present case or not. What is of relevancy is not the correctness or illegality of assessment order passed by the applicant but the conduct of the applicant in discharging his duties as an Assessing officer.
36. Before we dwell over the posers as indicated above, we would like to refer to the relevant rule formation which are being exercised by the Revenue Officers under the Income Tax Act, 1961(for short the Act) for better understanding of the arguments raised by the respective parties. Section 116 of the Act in chapter XIII deals with the income tax authorities for the purposes of the act. Section 139 in chapter XIV deals with procedure for assessment i.e how a return is to be filed which will be further dealt with by the ITO, who works as Assessing Officer in terms of section 143(3) of the Act and frames assessment. The final order of assessment passed is appealable under section 246(A) of the Act before CIT (Appeal), which can further be appealed in second appeal before Income Tax Appellate Tribunal (for short ITAT) under section 253 of the Act. Section 263 of the Act empowers the Revisional Authority to revisit the order of Assessing Officer, if in its opinion, the order is prejudicial to the interest of the revenue.
37. The applicant while discharging the duty as Deputy Commissioner of Income Tax ( as an Assessing Officer) processed the returns filed by the five companies and framed the assessment wherein he had shown those companies in profit then the loss. Subsequent to framing of assessment, the assessment order was rectified in terms of 154 of the Act as there were bonafide arithmetical mistake on the face of record which empowers the Revenue department to rectify their mistake if there is any arithmetical mistake on the face of record. That order was subject matter before the CIT(A) which is the first appellate court who affirmed the order which was further subject matter in second appeal before the ITAT who also maintained the view taken by the applicant while Assessing Officer. Subsequently, it was further challenged before the Honble High Court by the department and thereafter in the Honble Supreme Court at the hands of the Revenue stands dismissed. Considering that there was nothing adverse against the Assessing Officer (applicant) by the CIT(A) then by the ITAT and subsequently affirmed by the higher court, it can be said that there was no wilful, deliberate act on the part of the applicant to give undue benefit to the those companies as alleged by the respondents. If Revenue was/is of the view that an assessment framed by the applicant is not according to law then they could invoke Section 263 of the Act which empowers them to review assessment order if it is prejudicial to the right of the Revenue but by not taking that recourse as suggested under Section 263 of the Act, it is implied that revenue has also accepted that these mistakes were bonafide arithmetical mistake, which already stand rectified under Section 154 of the Act. Since the applicant was performing the quasi judicial function, therefore, in terms of law enumerated above, he couldnt be subjected to disciplinary proceeding while framing the assessment.
38. The respondents had issued the charge sheet on 02.01.2004 where they have alleged that while framing the assessment, displayed gross negligence in handling the scrutiny assessments had been done by the applicant to give undue benefit to the assesses. . For better appreciation, the charges which were framed, are reproduced below:-
STATEMENT OF ARTICLE OF CHARGE FRAMED AGAINST SHRI MANJIT SINGH, THE THEN DCIT (CENTRAL CIRCLE), MUMBAI Article-I That Shri Manjit Singh, while functioning as DCIT (Central Circle), Mumbai, from November, 1997 to March, 1998, displayed gross negligence in handling the scrutiny assessments of the under mentioned cases, resulting in substantial under assessment of income and short levy of interest and the conferment of undue benefit on the assesses :-
(I) M/s Topaz Holding (P) Ltd., A Y 1992-93 (II) Pallavi Holdings (P) Ltd., A Y 1992-93 (III) Shrenik J Shah, A Y 1995-96 (IV) Mazda Enterprises (P) Ltd., A Y 1995-96 (V) Mazda Industries and Leasing Ltd., A Y 1995-96 By his said actions, Sh. Manjit Singh failed to maintain absolute integrity and devotion to duty and displayed conduct unbecoming of a Government servant. He, thereby, violated the provisions of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964.
39. Sh. S.K. Chaurasia, Commissioner for Departmental Inquires of Central Vigilance Commission was appointed as Inquiry Officer who submitted his report on 14.06.2007 wherein he held that gross negligence to provide undue benefit to the assessee doesnt arise and it is only the bonafide arithmetical mistake. Charges levelled against the applicant were not proved by the I.O. The relevant finding recorded by the Enquiry Officer at para 17 of the report reads as under:-
17. Considering the entire Charge Sheet as integral document & the case in totality, the article charge is not sustainable yet the mistakes or errors as alleged are directly corroborated from evidence on record, however, there appears to be a case of bonafide error on the part of CO which were rectifiable and of arithmetical in nature, it is for the disciplinary authority to take appropriate view in the matter. Since these errors being bonafide arithmetical mistake as also certified by the dept., I, therefore, hold the article of charge as not proved.
40. The Disciplinary Authority while disagreeing with the inquiry report has heavily relied upon the report submitted by the CVC and came to conclusion that it is not arithmetical mistake rather it is gross negligence on the part of the applicant. The CVC advice dated 12.03.2008, reads as under:-
2. The commission has perused the inquiry report, along with its relevant records and the comments of the administrative authorities thereon. The Commission has observed that as stated by the Disciplinary Authority and the CVO, there has been substantial under assessment of income of the Assessee. The Inquiry officer has also stated that mistakes/errors in the assessment order passed by Sh. Manjit Singh, JCIT, are established from the facts on record in the enquiry and these findings of the IO are also not disputed by the DA and the CVO. Further, it is also a fact that had the errors of under assessment not been detected/rectified subsequently, the loss to the revenue would have been in crores.
3. In view of the above, the Commission would, in disagreement with the Disciplinary Authority and the CVO/CBDT, advise imposition of a suitable major penalty against Sh. Manjit Singh, JCIT.
41. We have examined the Charge Sheet, Inquiry report, Advice of CVC dated 12.03.2008 and disagreement note dated 22.05.2008. The disagreement note shows that disciplinary authority has heavily relied upon the advice given by the CVC to impose major penalty upon the applicant as no where it shows that disciplinary authority has applied his independent mind and came to the other conclusion that the inquiry was only based upon documentation. It is also not denied by the respondents that there was nothing against the applicant. He has unblemished service record except the present charge sheet. He was given various recommendation and his name has also recommended for presidential medal. Not only this, his achievement for subsequent years has also appreciated by the Revenue by indicating his case in their booklet published by the Income Tax Department. It is also not suggested at the time of arguments that the applicant is not having unblemished service record. The entire proceedings are based upon the advice tendered by the Central Vigilance Commission. The allegation of the applicant is that even if the CVC had tendered an advice, the Disciplinary Authority was under obligation to apply his own independent mind and then take a view which process has not been adopted in this case and the. The CVC has recorded that these mistakes reflect some negligence on the part of CO. Therefore, the Commission concluded that charge levelled against the CO is partly proved. It is only a three page note and there is no discussion on any evidence, documentary or oral, which could have been based by the CVC to record the aforesaid finding. The Honble Apex Court in A.N. D'Silva v. Union of India, [1962] Suppl; 1 SCR 968 has expresed the view that the Commission's function is purely advisory. It is not an appellate authority over the inquiry officer or the disciplinary authority. This view was followed in Nagaraj Shivarao Karjagi vs Syndicate Bank, 1991 AIR 1507. The advice tendered by the Commission is not binding on the Government. In that view of the matter it was expected of the authorities to have applied their own independent mind and reach to a conclusion that indeed charges stood proved in part or otherwise also which process has not been adopted and as such proceedings stand vitiated on that premise as well. Be that as it may, considering that those mistakes as recorded by the I.O as bonafide arithmetical mistake which has already been rectified in terms of the provision of Income Tax Act and there is no loss to the revenue, therefore, negligence, as in their view constitute to misconduct, cannot sustain in the eyes of law.
42. In the backdrop of above discussed facts and law, we are in agreement with the submissions made by the learned counsel for the applicant that the impugned charge sheet and show cause notice cannot sustain in the eyes of law as case of the applicant does not fall with the exceptions as laid down in the case of K.K. Dhawan (supra) warranting disciplinary proceedings for quasi judicial functions, accordingly, the present O.A is allowed. The impugned charged sheet and further proceedings based thereupon are hereby quashed and set side. Consequential benefits to follow.
43. No other point was argued.
44. No order as to cost.
(SANJEEV KAUSHIK) MEMBER (J)
(UDAY KUMAR VERMA) MEMBER (A)
Place: Chandigarh
Dated:29.10.2015
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