Central Administrative Tribunal - Madras
T. Goraknathan vs Union Of India (Uoi) And Ors. on 30 November, 2006
Equivalent citations: 2007(II)SLJ360(CAT)
ORDER
P. Shanmugam, Vice-Chairman
1. The applicant was functioning as Commissioner of Income Tax (DR) in the Income Tax Appellate Tribunal (ITAT) during the period 2001 to 2003 having jurisdiction to hear appeals filed by certain high profile individuals such as Ms. J. Jayalalitha, former Chief Minister of Tamil Nadu, Mrs. Sasikala and some other firms in which they are partners besides certain other concerns. Three Articles of Charges for misconduct were framed against the applicant alleging that he passed appellate orders conferring undue favour to the assessees with the malafide intent.
2. The prayer of the applicant in this O.A. are as follows:
(i) To call for the records in F. No. C-14011/17/2006-V & 1 of the Central Board of Direct Taxes, Department of Revenue, Government of India, North Block, New Delhi 110 001 including the secret note of the Department of Revenue of March 2004, based on which the file seems to have been opened.
(ii) To call for the records of the Central Vigilance Commission, Satarkta Bhawan, G.P.O. Complex Block A, INA, New Delhi 110 023 in Reference No. 006/ITX/044 and
(iii) To quash the proceedings initiated under Rule 14 of the CCS CCA Rules against the applicant in F. No. C-14011/17/2006-V dated 23.5.2006 and thus render justice.
3. The facts of the case are as follows:
The applicant joined the services with the Government of India as Income Tax Officer in the year 1976 and subsequently became Commissioner of Income Tax. During the relevant period namely 23.6.2001 to 9.11.2003, he was functioning as Commission of Income Tax (Appeals-II) at Chennai. The applicant was due to retire on 31.5.2006. However on 26.5.2006, he was served with a Memorandum dated 23.5.2006 proposing to hold an enquiry under Rule 14 of CCS (CCA) Rules, 1965. The Memorandum contained three Articles of Charges. The applicant submitted his representation to the Charges on 30.5.2006 requesting to make records available for verification so that written statement of defence could be submitted. Thereafter, the applicant submitted a written statement of defence on 3.7.2006. The applicant submitted a reminder on 3.8.2006 requesting to drop the proceedings but there was no response. Hence the above O.A.
4. The Learned Senior Counsel for the applicant Mr. C. Chinnaswamy took us through the relevant portions of the Imputation of Misconduct and submitted elaborately that they do not prima facie establish the case of misconduct. He further submitted that the appellate order passed by the applicant are of quasi-judicial in nature and there are no prima facie materials to hold that the orders were passed on extraneous consideration to confer undue favour to the assessee. The imputation of motive against the applicant is made generally without any specific allegation. There are no supporting materials even to sustain the prima facie charges levelled against the applicant. According to him, there is inordinate delay in initiating the above departmental proceedings and there is no justification to do so at the fag end of this career.
5. The Hon'ble Supreme Court had laid down certain parameters within which the quasi-judicial authorities can be proceeded against the orders passed by them in their quasi-judicial capacity. According to the Senior Counsel, applying the ratio laid down by the Hon'ble Supreme Court, the charge is liable to be quashed even at the preliminary stage.
6. Notice of motion was ordered on 25.9.2006 returnable by 9.10.2006 and Mr. M.T. Arunan, Additional Central Government Standing Counsel (ACGSC) took notice on behalf of the Government on that day. On 9.10.2006, Notice of Motion was ordered to be issued directly to the Department by Speed Post returnable by 12.10.2006. On 12.10.2006, at the request of ACGSC, the matter was adjourned to 17.10.2006. On 17.10.2006, on further request by ACGSC, further time to file reply was granted till 26.10.2006. Again on 26.10.2006, at the request of the Counsel of both sides, the matter was adjourned to 30.10.2006. On 30.10.2006, when the ACGSC made a request for further time to file reply, the matter was adjourned to 13.11.2006 finally. It was also ordered that if no reply was filed on that date, the matter will be decided on merits. On 13.11.2006, at the request of the learned Counsel for the applicant, the matter was adjourned to 14.11.2006 to be heard on that day. The matter was finally heard on 14.11.2006.
7. The respondents have neither filed reply no opposed the matter seriously. Mr. M.T. Arunan, Additional Central Government Standing Counsel (ACGSC) briefly submitted that the O. A. is premature and time limit can be prescribed to dispose of the enquiry. In so far as the merits of the Imputation of Misconduct is concerned, he submitted that he has no answer though he was asked to respond to the legal submissions on merits. The learned Senior Counsel for the applicant requested that the same may be recorded. It is so recorded.
8. Having heard the learned Counsel, we have considered the matter carefully. The points that arise for consideration are as follows:
(i) Whether the Article of Charges issued against the Government servant in his capacity as quasi-judicial authority is liable to be sustained?
(ii) Whether the Memorandum dated 19.3.2006 along with Imputation of Misconduct in support of Article of Charges are liable to be quashed?
(iii) Whether the Memorandum is liable to be set aside on grounds of laches?
Law on the Subject:
9. The law and scope of the departmental enquiry against the misconduct alleged to have been committed by the Government servant in exercise of the quasi-judicial power is now settled. Disciplinary proceedings can be initiated. The law laid down by the Hon'ble Supreme Court can be looked into.
10(a). In Government of Tamil Nadu v. K.N. Ramamurthy 1998 (1) SLJ 63 (SC) : 1997 SCC (L&S) 1749, the Hon'ble Supreme Court held that the Court can interfere if inference of misconduct cannot be drawn from the charges or if the charges are contrary to law. The Tribunal cannot take over the functions of Disciplinary Authority. Their Lordships observed as follows:
This Court further held that in case of charges framed in a disciplinary enquiry, the Tribunal or Court can interfere only if on the charges (read with imputation or particulars of charges, if any) no misconduct or other irregularity alleged can he said to have been made out, or the charges framed are contrary to any law.
(Emphasis added).
10(b). In UOI and Ors. v. K.K. Dhawan 1993(1) SLJ 102 (SC) : (1993) 24 ATC 1, the three Judges Bench of the Hon'ble Supreme Court held as follows:
28. Certainly, therefore, the officer who exercised judicial or quasi-judicial powers act negligently or recklessly or in order to confer undue favour on a person is not acting as a Judge. Accordingly, the contention of the respondent has to be rejected. It is important to bear in mind that in the present case, we are not concerned with the correctness or legality of the decision of the respondent but the conduct of the respondent in discharge of his duties as an officer. The legality of the orders with reference to the nine assessments may be questioned in appeal or revision under the Act. But we have no doubt in our mind that the Government is not precluded from taking the disciplinary action for violation of the Conduct Rules. Thus, we conclude that the disciplinary action can be taken in the following cases:
(i) where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty;
(ii) if there is prima facie material to show recklessness or misconduct in the discharge of his duty;
(iii) if he had 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 shall the bribe may be because Lord Coke said long ago "though the bribe may be small, yet the fault is great.
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."
(Emphasis added) 10(c). In Union of India v. Upendra Singh 1994 (2) SLJ 77 (SC) : 1997(27) ATC 200, the Hon'ble Supreme Court set out the scope of jurisdiction of the Tribunal in such matters as follows:
6. In the case of charges framed in a disciplinary inquiry the Tribunal or Court can interfere only if on the charges framed (read with imputation or particulars of the charges, if any) no misconduct or other irregularity alleged can be said to have been made out or the charges framed are contrary to any law. At this stage, the Tribunal has no jurisdiction to go in to the correctness or truth of the charges. The Tribunal cannot take over the functions of the Disciplinary Authority. The truth or otherwise of the charges is a matter for the Disciplinary Authority to go into. Indeed, even after the conclusion of the disciplinary proceedings, if the matter comes to Court or Tribunal, they have no jurisdiction to look into the truth of the charges or into the correctness of the findings recorded by the Disciplinary Authority or the Appellate Authority as the case may be. The function of the Court/Tribunal is one of judicial review, the parameters of which are repeatedly laid down by this Court. It would be sufficient to quote the decision in H.B. Gandhiv. Gopi Nath & Sons. The Bench comprising M.N. Venkatachaliah, J, (as he then was) and A.M. Ahmadi, J., affirmed the principle thus: (SCC p. 317, page 8) Judicial review, it is trite, is not directed against the decision but is confined to the decision-making process. Judicial review cannot extend to the examination of the correctness or reasonableness of a decision as a manner of fact. The purpose of judicial review is to ensure that the individual receives fair treatment and not to ensure that the authority after according fair treatment reaches, on a matter which it is authorised by law to decide, a conclusion which is correct in the eyes of the Court. Judicial review is not an appeal from the decision but a review of the manner in which the decision is made. It will be erroneous to think that the Court sits in judgment not only on the correctness of the decision making process but also on the correctness of the decision itself.
7. Now, if a Court cannot interfere with the truth or correctness of the charges even in a proceeding against the final order, it is ununderstandable how can that be done by the Tribunal at the stage of framing of charges?
(Emphasis added) 10(d). In Zunjarrao Bhikaji Nagarkar v. Union of India and Ors. 1999 SCC (L&S) 1299, the charge against the applicant in that case was that after having held that the assessee had clandestinely manufactured and cleared the excisable goods and evaded the excise duty wilfully, no penalty was imposed. Their Lordships of the Hon'ble Supreme Court held as follows:
The initiation of the disciplinary proceedings against the officer cannot take place on information which is vague or indefinite. Suspicion has no rule to play in such matter. There must exist reasonable basis for Disciplinary Authority to proceed against the delinquent officer. Merely because the penalty was not imposed, and the Board in the exercise of its power directed filing of appeal against the order-in-original passed by the appellant could not be enough to proceed against him. There is no other instance to show that in similar case, the appellant invariably imposed the penalty...."
...To maintain a charge sheet against the quasi-judicial authority, something more has to be alleged than mere mistake of law, e.g., in the nature of some extraneous consideration influencing quasi-judicial order.
10(e). In a recent decision in Union of India and Ors. v. Duli Chand Civil Appeal No. 2168 of 2006 (Arising out of S.L.P. (Civil) Nos. 642-644 of 2005) dated 21.4.2006, Their Lordships of the Hon'ble Supreme Court held as follows:
In our opinion, Nagarkar's case was contrary to the view expressed in K.K. Dhawan's case. The decision in K.K. Dhawan being of that larger Bench would prevail. The decision in Naga rkar's case therefore does not correctly represent the law. Inasmuch as the impugned order of the Tribunal and the High Court were passed on the law enunciated in Nagarkar's 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.
(Emphasis added).
10(f). In the High Court of Judicature at Bombay v. Shashikant S. Patil and Anr. 2000(2) SLJ 98 (SC) : 2000 SCC (L&S) 144, Their Lordships of the Hon'ble Supreme Court held that if there is some legal evidence on which finding can be based, they the adequasy or even reliability of that evidence is not a matter that can be canvassed before the Hon'ble High Court under Article 226 of the Constitution. Their Lordships held as follows:
....Dishonesty is the stark antithesis of judicial probity. Any instance of a High Court condoning or compromising with a dishonest deed of one of its officers would only be contributing to erosion of the judicial foundation. The judiciary has to be reminded itself every hour that it floats only over the confidence of the people in its probity. Such confidence is the foundation on which the pillars of the judiciary are built.
The Judges, at whatever level they may be, represent the State and its authority, unlike the bureaucracy or the members of other service. Judicial service is not merely an employment nor the Judges merely employees. They exercise sovereign judicial power. They are holders of public offices of great trust and responsibility. If a judicial officer "tips the scales of justice its rippling effect be disastrous and deleterious". A dishonest judicial personage is an oxymoron.
(Emphasis added) Though the Hon'ble Supreme Court was dealing with the case of Joint Civil Judge (Junior Division) on the conduct of the officer in discharging of his duties, the same principle would apply equally or more in the case of quasi-judicial officers.
11. In the case of K.K. Dhawan, the Hon'ble Supreme Court held that the charges against the Income Tax Officer that he completed the assessment in an irregular and hasty manner to confer undue favour upon the assessees without maintaining absolute integrity and devotion to duty and exhibiting conduct unbecoming of a Government servant was to be sustained based on the materials available. Their Lordships held as follows:
In the case on hand, article of charge clearly mentions that the nine assessments covered by the article of charge were completed;
(i) in an irregular manner,
(ii) in undue haste, and
(iii) apparently with a view to confer undue favour upon the assessees concerned. Therefore, the allegation of conferring undue favour is very much there unlike Civil Appeal No. 560 of 1991. If that be so, certainly disciplinary action is warranted....
12. The submission that no charge can be framed against an officer discharging the functions of a quasi-judicial authority without evidence of extraneous consideration influencing the quasi-judicial order, cannot be sustained in the light of the law laid down.
13. We are to look into the facts as set out in the charges and see whether the imputation if established would make out a case. We are at this stage not concerned with the truth or otherwise of the imputations.
14. We are conscious of the caution expected of us in such matters and each case will depend upon the facts and no absolute rule can be postulated and hence we propose to go into the imputation of charges to seek whether there are materials for a disciplinary action.
On the Charges:
15. There are three Articles of Charges. They are:
(a) Article of Charge No. 1 refers to appellate orders passed by the applicant without proper examination of the issues conferring undue benefits to the assessees with malafide intention in reference to four of the following assessees:
(1) M/s Jaya Publications (Assessment years: 1991-92, 1992-93, 1993-94, 1994-95, 1995-96, 1996-97, 1997-98, 1998-99, 1999-2000).
(2) M/s Sasi Enterprises (Assessment years : 1993-94, 1992-93, 1991-92).
(3) Ms. J. Jayalalitha, 36, Poes Garden, Chennai-86. (Assessment years :1987-88 to 1992-93).
(4) M/s TCV Engineering Ltd. (Block period 01.04.1989 to 22.03.2000).
(b) The Article of Charge No. 2 relates to the appellate orders in reference to the following three cases in favour of the assessees admitting fresh evidence in violation of the prescribed procedure conferring undue favour to the assessees with the malafide intent:
(1) M/s Jaya Publications (Assessment years : 1991-92 to 1999-2000) (2) M/s Sasi Enterprises (Assessment years: 1993-94, 1992-93 , 1991-92) (3) Dr. (Mrs) Jamuna Srinivasan (Block period 01.04.1987 to 10.04.1997).
(c) The Article of Charge No. 3 refers to the appellate orders passed by the applicant in a summary manner without giving reasons in violation of the provisions of the Income Tax Act in favour of the following:
(1) M/s Seshasayee Paper & Boards Limited: (Assessment year: 2000-01).
(2) M/s Sastry Nuts and Plates Manufacturing Private Limited:
(Assessment year: 1999-2000).
16. The brief summary of the Statement of Imputation of Misconduct are as follows:
(a) Charge No. 1: (Conferring undue benefits) Case No. 1. :- Jaya Publications (Assessment Years: 1991-92 to 1991-2000) The case of the assessee M/s Jaya Publications is that during this period of assessment, they have collected deposits from number of persons running to several lakhs of rupees. For instance, in the year 1991 -92, the claim of assessee was that they have obtained deposits of Rs. 10,87,067 during the original assessment proceeding but during reassessment it rose to Rs. 13,54,000. The Assessing Officer after calling for the primary evidence found that what was claimed as deposit, really represented sales and advertisement collections of 'Namadu MGR' and there was no mention of any scheme deposit collection in the impounded books. The Assessing Officer concluded that the scheme deposits were not genuine and it was assessees own money from undisclosed sources introduced as such and accordingly added the sum of Rs. 13,54,000 under Section 68 of the I.T. Act.
(b) According to the Article of Charges, when the matter came up for appeal before the applicant, based on the relevant books of accounts in support of the revised claim confirming the deposits made by them, the Appellate Authority, the applicant herein observed that the Assessing Officer should have summoned the depositors or through any other mode of enquiry to find out the genuineness or otherwise of these depositors. He further found that out of the total of 250 persons, 41 had denied having made deposits, which worked out to 1.5% out of the total deposit (for the year 1996-97). Applying the same percentage for the assessment year 1991-92 also, he retained a round sum addition of Rs. 25,000 and deleted the balance of Rs. 13,29,000. It is also noticed in the Article of Charges that the Assessing Officer had made a written statement before the CIT (A) pointing out that in the reassessment proceedings, no evidence was produced in respect of such deposits and there was no contemporaneous evidence to prove the scheme deposit collections. The allegation is that the applicant ignored these submissions and instead of following the normal procedure of summoning such persons and examining them under oath and decide the issue, concluded by adopting a percentage of the deposits as non-genuine. The same procedure was adopted for assessment years 1992-93, 1993-94, 1994-95, 1995-96, 1996-97, 1997-98, 1998-99 and 1999-2000. The applicant by this process restricted the disallowance of 1.5 % and allowed 98.5% of the amount of additions made by Assessing Officer in the other years.
(c) For the assessment years 1991-92 to 1996-97 the Assessing Officer disallowed the claim of agricultural income on the ground that the lease and licence agreement entered into with one Shri P.S.R. Vasudevan was not produced and the revenue authorities deny that there records of any tenancy in respect of the land in possession. However, the applicant allowed the claim on the basis of the certificate of Tahsildar dated 25.10.2001 and confirmation letter given in the year 2001. In that process, the appellant treated the assessees as having received the agricultural income of Rs. 8,01,961 for the year 1991-92 but restricted it to Rs. 4,54,500 since the assessee has claimed that the amount is only agricultural income. The allegation contained in the Article of Charges is that there was no contemporaneous evidence to support the list and no records have been produced to prove the receipt of agricultural income. It is further alleged that the applicant did not follow the procedure laid down under Income Tax Rules before accepting fresh evidence. It was also alleged that though the assessees claim to have maintained the register in the form in the original course of business, the applicant proceeded to establish the agricultural income as if no records were maintained.
(d) Case No. 2: M/s Sasi Enterprises:
(Assessment Years: 1993-94, 1994-93 and 1991-92).
For the years 1993-94, 1992-93 and 1991-92, the allegation against the applicant is that he has deleted additions towards suppressed receipts and allowed the claim of agricultural income in favour of the assessee. The pattern is similar in all the assessment years. For instance, insofar as the disallowance of agricultural income for these assessment years is concerned, it is seen that the Assessing Officer has disallowed the claim of agricultural income of Rs. 3,37,000 and assessed it as income from other sources. On appeal, the applicant accepted the lease agreement and the affidavit of T.S.R. Vasudevan dated 10.11.2001 retracting his earlier statement and the certificate of Tahsildar dated 25.10.2001 and held that the lease agreement dated 1.4.1990 entered into by the assessee with T.S.R. Vasudevan was valid. In that process the applicant had accepted a fresh evidence inspite of non-production of the lease deed and the evidence available for the enquiry of Tahsildar revealed that there is no record of tenancy in favour of the assessee in support of the alleged lease hold lands. It is also alleged that the firm was reconstituted with effect from 4.5.1990 and there was no mention of anything about the agricultural activities with the firm.
(e) The applicant in the absence of records, not produced before the Assessing Officer and especially in the light of the order of the Assessing Officer that though the authorised representative in his letter dated 12.3.2001 had claimed that the sale bills were available, they were not produced for verification. As the primary records were not produced, the veracity of the assessee's claim could not be verified. However, the applicant in his appeal order stated that all the sales of agricultural products, supported by cash bills, have been given to the Assessing Officer. Thereafter the estimated assessee's agricultural income on the premises that three acres were used for ground nut cultivation and 27.34 acres for vegetables etc., as main crop. The allegation is that when the authorised representative claimed that records had been maintained in the ordinary course of business and the records are available, instead of examining them, the applicant estimated the income as if no records were maintained.
(f) The applicant had deleted an addition of Rs. 2,50,000 being advance made to one C. Subramany am on the basis of cash flow statement, overlooking the Assessing Officer's statement to the effect that without any direct evidence regarding advance or source for the same, the assessee's claim cannot be accepted based on the balance sheet. It is alleged that the applicant was somehow determined to allow the claim of the assessee even without production of any evidence. Similar allegations are set out in detail for the assessment years 1992-93 and 1993-94.
(g) Case No. 3:- Ms. J. Jayalalitha:
(Assessment years 1987-88 and 1992-93) In reference to case No. 3 regarding Ms. J. Jayalalitha for the assessment years 1987-88 to 1992-93, the assessment for the years 1987-88 to 1992-93 were reopened on the ground that the Assessing Officer had reason to believe that the assessee had brought unaccounted cash into her account in the guise of agricultural income. The Assessing Officer finalised the reassessment on 28.3.2000 as follows:
Assessment Returned Income/ Returned Agricultural Income/ Year Assessed Income Agricultural income disallowed 1987-88 26,850/ 4,80,000/ 11,81,320 2,52,240 1988-89 38,910/ 5,50,000/ 24,51,483 3,22,240 1989-90 25,200/ 7,00,000/ 35,69,315 4,72,240 1990-91 86,860/ 8,00,000/ 1,32,34,080 4,75,040 1991-92 4,48,660/ 9,00,000/ 87,59,290 6,94,040 1992-93 6,64,528/ 9,50,000/ 2,24,00,790 5,63,440 The main allegation against the applicant is in reference to the method of computation of agricultural income for these assessment years. The Assessing Officer has taken three factors:
(a) Inspection by the then DCIT, Range-IV in the year 1993;
(b) Inspection by the Assessing Officer (A=\A) in January, 1994 and
(c) The report of the Horticultural Officer.
The assessee's claim of cultivation for the years 1987-88 to 1992-93 was not accepted. The Assessing Officer assessed the cultivation of grapes at 4.86 acres but at the appeal stage on the basis of sale deed dated 7.6.1968, the applicant on presumption that another five acres of agricultural land would have been brought under grape cultivation, concluded that about 10 acres were under grape cultivation. The allegation is that the inspection of DCIT, Range-IV, Chennai during March 1993 and inspection of Horticultural Department of Government of Andhra Pradesh on 11.12.1996 referring to grape cultivation in 4.86 acres were based on the facts and this should have been taken into account instead of accepting the additional evidence in the form of sale deed to accept the claim of cultivation of 10 acres. The computation of agricultural income by the Assessing Officer was based on the data furnished by the NABARD. However, at the appellate stage the applicant accepted the objection on behalf of the assessee and accepted the devious method viz., working back the agricultural income and expenditure on cost inflation index without assigning proper reasons. The allegation is that if the rates furnished by the NABARD was held reasonable for the Assessment Years 1994-95, they cannot become arbitrary for the Assessment Years 1987-88 to 1992-93.
17. Case No. 4:- (M/s TCV Engineering Limited) In reference to M/s TCV Engineering Limited (Block period 01.04.1988 to 22.03.2000), it is stated that the assessee filed a return of income admitting undisclosed income of Rs. nil and the assessment for the block period from 1.4.1989 to 22.3.2000 was completed, determining the undisclosed amount of Rs. 1,22,89,202. Several issues on the basis of various figures were set out in the chargesheet and ultimately it was found that the applicant deleted the addition of Rs. 13,54,648 conceding the contention of the assessee that if the amount of Rs. 11,00,000 had been paid by cheque as contended by Mr. V. Durairaj, it should have been found place in any of the assessee's Bank accounts. This aspect was not verified by the Assessing Officer, the applicant concluded that the sum did not amount to undisclosed income of the assessee. The applicant deleted additional holding that the Assessing Officer relied merely upon the statement of the payer and did not file any clinching evidence to show that the sum of Rs. 2,65,345 was actually received by the assessee. The applicant also deleted another addition of Rs. 2,38,358 holding that it was a genuine transaction. According to the charge, the decision has been given with a view to provide undue favour to the assessee relying on irrelevant decision to the prejudice of the interest of the revenue.
18. The Article of Charge No. 2 refers to three cases wherein the appellate orders were passed in favour of the assessees admitting fresh evidence in violation of the procedure prescribed in favour of Jay a Publications for the assessment years 1991-92 to 1999-2000 and M/s Sasi Enterprises for the assessment years 1993-94,1992-93 and 1991-92 and Mrs. Jamuna Srinivasan for the block period 1.6.1987 to 10.4.1997.
18(a). In reference to the agricultural income in favour of Jaya Publications it was alleged that fresh evidence produced during appellate proceedings was not examined as per the requirement. For the rental income for the year 1999-2000 with regard to M/s Jaya Publications at the appellate stage, copies of the orders of the Corporation, Chennai indicating the annual value of four properties was taken into account and rental income was determined. This, according to the charge, is a fresh evidence admitted without giving an opportunity to the Assessing Officer.
18(b). In reference to M/s Sasi Enterprises for the assessment years 1993-94,1992-93 and 1991-92 fresh evidence in the form of lease deed, affidavit and certificate of Tahsildar though they were not produced before the Assessing Officer for the assessment years 1992-93, the applicant allowed the claim of the assessee regarding receipt of Rs. 94,000 as rental allowance on the strength of letters of the year 2001 and he again accepted the claim of repayment of advance of Rs. 4,50,000 and deleted the addition after entertaining fresh evidence in the form of letter of the year 2002. For the assessment years 1992-93 and 1993-94 the applicant accepted the claim of repayment of advance of Rs. 3,70,000 and deleted the addition on the basis of fresh evidence in the form of letter of the year 2002.
18(c). In reference to Dr. (Mrs.) Jamuna Srinivasan for the block period 1.4.1987 to 10.4.1997 the assessment was completed by assessing the income of Rs. 2,34,36,580 which issue relates to unaccounted investment of Rs. 5,30,996. In the return for the block period, the appellant had disclosed Rs. 11,00,898 towards cost of construction. According to the Assessing Officer, the investment as per the seized material came to Rs. 16,31,894 and since the assessee did not explain the different of Rs. 5,03,996, the said amount was added. However, during the appeal procedure, accepting the plea of the reconcilation statement, investment was worked out at Rs. 11,00,898, the appellant was permitted to file fresh evidence taking the contrary stand before the applicant. The applicant also deleted the additional of Rs. 9,96,027 towards unexplained investment. The charge is that the appellant claimed reconcilation statement filed by the Assessing Officer but the Assessing Officer without considering the same passed the assessment order which ought to have been verified with the Assessing Officer. Further the assessees claim that these fixed deposits were renewal of earlier fixed deposits has been accepted without any verification and without giving an opportunity to the Assessing Officer to examine the reconcilation statement stated to have been filed on 29.6.1999. Thus according to the charge, the applicant without following the prescribed procedure, passed orders intending to confer an undue benefit on the assessee bypassing the procedures prescribed under Income Tax Rules, 1962 thereby, failed to maintain absolute integrity and thereby acted in a manner unbecoming of a Government servant.
19(a). Article 3 relates to passing of order in a summary manner in reference to two order. In reference to M/s Sai Papers and Board Limited for the assessment year 2000-2001, the assessee's claim of diminish in the value of investment in the equity share amounting to Rs. 30,59,000 was disallowed. The appeal was allowed by the applicant in his order dated 26.11.2002 on the basis of certain decisions without a speaking order. The appellate order contained in the last three lines in a summary manner. Even the appellant wrote a letter on 16.3.2002 requesting the applicant to clarify whether the appellate order was allowed on merits and if not to consider the submissions already made. Thereafter, the applicant vide his letter dated 23.12.2002 addressed the appellant to clarify that he has considered various submissions made by the appellant and the appellate order was passed after taking into account the legal as well as factual issues. According to the charge, it clearly proves that the order passed by the applicant on 26.11.2002 was not a speaking order, cryptic and bypassing all instructions/rules to be following which displays lack on his part.
19(b). In reference to M/s Sastry Nuts and Plates Manufacturing Private Limited (Assessment Year: 1990-2000), the Assessing Officer finalised the assessment ex-parte, determined the total income at Rs. 21,56,330 by recording reasons. The Assessing Officer allowed 1/3 of the gross receipt as expenditure in the absence of evidence. He did not accept the claim of lease rent and depreciation in the absence of evidence. However, the applicant on the basis of the assessees claim that he did not receive the letter of the Assessment Officer held that 75% of the gross receipt as allowable expenditure while allowing lease rend and appreciation in the absence of evidence. There was no speaking order by the Appellate Authority. The decision of the applicant in the appellate order in a summary manner without recording the reasons, is grossly violative of provisions of the Income Tax Act and failed to maintain devotion to duty and acted unbecoming of the Government servant.
20. After going through the detailed allegations contained in the Imputation of Misconduct in support of the three Articles of Charges; viz.,
(i) the applicant has passed the orders without proper examination of the issues resulting in conferring of undue benefit to the assessees;
(ii) the applicant has admitted a fresh evidence at the appellate stage in violation of the prescribed procedure and;
(iii) the applicant has passed orders in a summary manner without recording reasons in violation of the provisions of the Income Tax Act and Rules.
We find sufficient and prima faciematerial in support of the Imputation of Misconduct. We are not, at this stage, concerned with the truth or otherwise of the Statement of Imputation of Misconduct. These statements are in the nature of allegations but based on definite materials. If the same is substantiated before the Enquiry Officer and the Disciplinary Authority, it would amount to misconduct for having failed to maintain absolute integrity and devotion to duty. Our attempt at this stage is only to find out, given the facts and the statement of imputation, whether the charge is prima facie sustainable or not. As stated earlier, there are sufficient materials available in the form of Statement of Imputation of misconduct supported by documents showing conduct reflecting on the reputation and integrity or devotion to duty and conferring undue benefits to several assessees.
21. It is not the case of the respondent that there are extraneous consideration influencing the orders by the applicant. Therefore, there is no need for such a material to be brought out in the chargesheet. Similarly on the question of malafides as found by the Hon'ble Supreme Court in Dhawan's case that an officer should exercise quasi-judicial powers, act in such a way to confer undue favour on a person is not acting as Judge. As expected of the respondents, they have taken great caution and close scrutiny before initialing departmental proceedings against the applicant. A perusal of the detailed charge-sheet indicates the investigation that is taken before the charge is framed against the applicant.
22. It is seen that as against the applicant, another charge Memorandum dated 9.3.2006 is pending. The charge relates to failure to maintain absolute integrity by abusing or misuing his official position, obtained pecuniary gain in the form or air travel on three occasions. The O.A. 297/2006 filed against the charge Memorandum was dismissed by Tribunal on 21.4.2006 and the enquiry is pending.
23. In reference to the plea of delay in initiation of the departmental proceedings, it is seen that the orders in appeal were passed by the applicant between 2001-2003. The Office Memorandum dated 11.5.2006 (annexed to the O.A.) issued by the Director of Central Vigilance Commission states that it had taken more than two years for the Department of Revenue to investigate the matter and send the report to the Commission. It was also noticed that the Officer had committed misconduct in contravention of the provisions of Rules and procedures while adjudging the cases repeatedly. They also refer to cases wherein undue favourable orders were passed relying on the decision which would not be relevant. It was further noticed that the acts of omission and commission on the part of the officer cannot be considered to be an error of judgment and that the officer cannot take shelter of being a quasi-judicial authority. According to the Central Vigilance Commission, the acts of omission and commission are grave enough to award major penalty and the Department had to issue charge-sheet dated 23.5.2006 to the applicant well before his retirement on 31.5.2006. There was no delay on the part of the Department of Revenue since in March 2004 itself the Note was sent to the CBDT and they have taken two years to investigate the matter and send the report. Considering the fact that the assessment orders relate to more than 10 years period and several issues were to be considered during the investigation and consequent initiation of proceedings, the delay if any cannot be considered unreasonable.
24. For all the above reasons, we do not find any reasons to interfere with the Charge Memo. The O.A. fails and is dismissed with no order as to costs. However, considering the facts and circumstances, the respondents are directed to complete the disciplinary proceedings expeditiously.
25. Before parting with the case, we are constrained to observe that in a case of this nature, namely chargesheet against high ranking quasi-judicial authority, when notice was taken by ACGSC on the motion on 25.9.2006 on behalf of all the respondents, it is necessary that the Department should have instructed the standing Counsel appearing on their behalf to make necessary submissions on the legal points raised by the applicant even if they could not file a counter statement, so as to enable the Bench to adjudicate the matter expeditiously and properly. As it could be seen that the decision was to be based mostly on legal aspects but in spite of nearly two months time granted, it is unfortunate the Department/respondents were not in a position to instruct their Counsel to assist the Tribunal. Despite several opportunities granted to ACGSC, the argument of the learned Counsel for the respondents, to say the least, is disappointing and of little assistance to the Tribunal.