Gujarat High Court
Union Of India & vs Govindbhai Bhagat Son Of Baldevdas T ... on 13 January, 2015
Author: Akil Kureshi
Bench: Akil Kureshi
C/SCA/173/2010 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 173 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MS JUSTICE SONIA GOKANI
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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UNION OF INDIA & 1....Petitioner(s)
Versus
GOVINDBHAI BHAGAT SON OF BALDEVDAS T BHAGAT....Respondent(s)
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Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Petitioner(s) No. 1 - 2
MR KEYUR A VYAS, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
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C/SCA/173/2010 JUDGMENT
HONOURABLE MS JUSTICE SONIA GOKANI
Date : 13/01/2015
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) Income Tax department has filed this petition challenging the judgment of the Central Administrative Tribunal, Ahmedabad dated 31.8.2009 in Original Application No.53 of 2008. Brief facts are as under:
The respondent at the relevant time was discharging his duties as Assistant Commissioner of Income-tax (Investigation), Rajkot. A search was conducted at the establishment of one M/s.Navinchandra Jewellers, Rajkot on 8.9.95 and thereafter. A detailed appraisal report was prepared on 6.11.95 on the basis of the documents collected and materials seized during such search operations. The respondent as the Assessing Officer completed the assessment for the block period in question. On the premise that in the process, the respondent had failed to maintain absolute integrity and devotion to duty, a chargesheet dated 15th May 2001 came to be issued which contained following two charges:
"Article I That Sh. G.B.Bhagat while functioning as ACIT (Inv). Circle- 2 Rajiot completed the block period assessment in th case of M/s.Navinchandra Jewellers, Rajkot without making proper enquiries and scrutiny of the seized material. Sh. Bhagat accepted the retraction made by the assessee with a dishonest motive to favour the assessee and cause loss to the revenue.Page 2 of 15
C/SCA/173/2010 JUDGMENT By the aforesaid acts of omission and commission, he failed to maintain absolute integrity, devotion to duty and exhibited conduct unbecoming of a Govt. servant, and thereby violated rules 3(1)(i), 3(1)(ii) and 3(1) (iii) of CCS (Conduct) Rules, 1964.
Article II That Sh. G.B.Bhagat while functioning as ACIT (Inv). Circle- 2, Rajkot recommended the release of books of account/documents and valuables found and seized from the business premises of M/s.Navinchandra Jeweller and from the residential premises of Sh. Navinchandra G.Thaver in due haste and in an improper manner. Sh.Bhagat acted with a dishonest motive in recommending and releasing the books of account to prevent detection of his misconduct. By the aforesaid acts of omission and commission, he failed to maintain absolute integrity, devotion to duty and exhibited conduct unbecoming of a Govt. servant and thereby violated rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of CCS (Conduct) Rules, 1964."
Statement of imputation of misconduct accompanying the chargesheet elaborated these charges. With respect to article I, it was alleged that there was several important points raised by the investigating team in its appraisal report concerning unaccounted investments of the assessee firm in various immovable properties. It was pointed out that construction of a house was underway in Mahavir Society, Kalavad Road, Rajkot on a plot of 800 sq. yards area. There were discrepancies in the rough accounts maintained by the assessee which falsified the declaration of unaccounted investments of 8.93 lacs. The appraisal report suggested that reference should be made to the valuer for valuation of the property in order to determine the real consideration paid. There were other Page 3 of 15 C/SCA/173/2010 JUDGMENT instances of the respondent not taking into account the points raised in the appraisal report.
Regarding charge article II, it was alleged that with dishonest intention and in order to prevent detection of his misconduct, the delinquent recommended release of books of accounts and other documents upon passing the order of assessment.
The respondent denied the charges. A departmental inquiry was thereupon conducted. Before the Inquiry Officer, the respondent presented a detailed written submissions dated 16.9.03. As regards not referring the matter for valuation, he submitted as under:
"In view of the statement recorded of Shri S.N.Thaver, details called for of the immovable property of family members and conclusion arrived by my successor, it is clear that there was no underassessment of Rs.15,50,000/-. The reassessment order is also approved by the CIT concerned. The question now raised why I have not referred to the valuation cell to decide the cost of land which has been done by successor. In this regard is submitted that the block assessment is to be completed on the basis of the evidences, material collected during the course of search. Referring of issue of cost of land/construction does not fall within the jurisdiction of order passed u/s 158BC. Therefore, matter is not referred to the valuation cell. It is supported by judgment of the Supreme Court in the case of Amiya Bala Paul Vs. CIT 262 ITR 407."
With respect to release of the documents, he contended that the powers were vested in the Commissioner of Income-tax. He had Page 4 of 15 C/SCA/173/2010 JUDGMENT only made recommendations. He was not involved in passing the final order. He contended as under:
"The power of release of books of accounts is absolutely vested with the Commissioner of Income Tax u/s 132(8) of the Act. When power is vested in the hands of C.I.T. Only, I cannot be charged for the power exercised by the CIT. The recommendation is being interpreted as irregularity with malafide intention. Recommendation is only recommendation which may be accepted or may not be accepted. The recommendation was not binding to the CIT. Therefore, recommendation cannot come under the purview of misconduct. One copy of appraisal report was already with the CIT. He was also involved in the completion of block assessment of the firm. I did not hide any fact as alleged by the Presenting Officer."
The Inquiry Officer presented his report dated 12.12.2003. With respect to charge article I, he split the same into two components, (a) regarding the charged officer having completed the assessment without making inquiry and scrutiny of the seized material and (b) regarding the charged officer having accepted the retraction made by the assessee with dishonest motive to favour the assessee and to cause loss to the revenue. He held that portion (a) of the charge was partly proved. Insofar as the completion of assessment ignoring the points raised in the appraisal report is concerned, he held that the charge was not proved. He concluded as under:
"i) Perusal of the assessment records show that the AO (CO) had sent a detailed questionnaire vide letter 26.4.1996 to the assessee. The questionnaire covered almost all the points suggested by the ADIT in the appraisal report. The assessee Page 5 of 15 C/SCA/173/2010 JUDGMENT submitted his detailed reply to the questionnaire which is placed on record. On four different dates in May 1996 the assessee along with the CO had appeared and various annexures had been discussed and verified.
ii) The draft assessment order was forwarded to the CIT through Addl. CIT, Rajkot, Range-2, and order was passed after receipt of approval of CIT, Rajkot.
iii) The CO took care to frame the assessment in line with the findings of the ADIT in the appraisal report after obtaining the explanation of the assessee and keeping in mind various seized material."
However, he held that the charged officer should have referred the matter to the Valuation Officer since there was controversy with respect to the price of the land as per the notings in the seized papers. He noted that in the subsequent reassessment, there was an addition of Rs.2.44 lacs on this count after reference to the valuation cell.
With respect to part (b) of the charge, he held that the same was not proved. He held that the charged officer had succeeded in explaining the acceptance of the retraction.
With respect to charge article II also, the Inquiry Officer split the same into two parts, (a) regarding dishonest intention in releasing the books of accounts to prevent detection of his misconduct and (b) showing undue haste in releasing such books of accounts. As recorded by the Disciplinary Authority, the Inquiry Officer held component (a) as proved and (b) as not proved for the Page 6 of 15 C/SCA/173/2010 JUDGMENT following reasons:
"Component (a):
The IO held component (a) as 'proved' since what is to be retained or not is known to the AO who is well conversant with the facts of the case and the fact that the block assessment in the individual cases were pending was well known to the CO. The higher authorities had not directed him to submit a positive recommendation for release. The AO could have brought out the facts of the case in his report such as pendency of block assessment, status of appeal proceedings, payment of taxes against he demand raised and his opinion regarding the release of books. The CO also accepted the undertaking given by the assessee that no appeal will be filed against the assessment order. The CO acted hastily without waiting for the limitation period for filing appeal to be exhausted, without verification of payment of taxes and without ascertaining whether other proceedings dependent on the seized material were pending under the Act.
Component (b):
As regards the release of books the IO held the component of charge as 'not proved' since books were released only after the order of release was passed by the CIT.
Article II was held by the to be 'partly proved."
After considering the representation of the charged officer, the Disciplinary Authority agreed with the view of the Inquiry Officer. Taking into account the advise of the UPSC, he imposed punishment of 15% cut in pension of the respondent for 10 years by the order dated 20th April 2007, since the delinquent officer had in the meantime retired.
Page 7 of 15C/SCA/173/2010 JUDGMENT The respondent thereupon challenged the order of punishment before the Central Administrative Tribunal, Ahmedabad. By the impugned judgment, such petition was allowed. The Tribunal placed reliance on the decision of the Supreme Court in the case of Zunjarrao Bhikaji Nagarkar v. Union of India, AIR 1999 SC 2881 and in the case of P.C.Joshi v. State of UP, (2001) 6 SCC 491 to come to the conclusion that the charges were wrongly held to have been proved. It is this judgment of the Tribunal which the department has challenged in this petition.
Mrs.Bhatt for the department contended that after following the principles of natural justice, the Disciplinary Authority held that the charges were partly proved. Such findings could not have been disturbed by the Tribunal since there was sufficient evidence on record to support the conclusion. She submitted that in face of such proved charges, the punishment of 15% cut in pension for a limited period cannot be said to be grossly disproportionate. She relied on a decision of the Supreme Court in the case of Union of India v. K.K.Dhawan, (1993) 2 SCC 56 to contend that even in respect of quasi judicial order, departmental inquiry can be conducted.
On the other hand, Shri Thakar for the respondent opposed the petition contending that the Tribunal has properly considered all aspects of the matter. The respondent was not authorized to release the document. Such documents were in fact released by the CIT after the assessment was completed. Such assessment order Page 8 of 15 C/SCA/173/2010 JUDGMENT was passed after obtaining approval from CIT as required under the statute. He further submitted that reference to valuation officer was not competent as held by the Supreme Court in the case of Amiya Bala Paul v. Commissioner of Income Tax, 262 ITR 407 (SC).
Having thus heard the learned counsel for the parties and having perused the documents on record, we may recall that though the charges contained in the chargesheet were very wide, the Inquiry Officer eventually held both the charges only partly proved. With respected to article 1, the finding of the Inquiry Officer was that the charge was proved to the limited extent of the delinquent not referring the issue to the valuation officer. Rest of the charge was held not proved. We, therefore, may not trouble ourselves with details of such charge and the material on record since even the Disciplinary Authority concurred with the Inquiry Officer's view on this count.
The only element of the first charge that even according to the department stood proved was that the respondent as the Assessing Officer completed the assessment without obtaining valuer's report. According to the department, there were discrepancies in the rough notings on the materials seized during the course of the search operations. If the valuer's report was obtained, correct figures would have come on record. The defence of the charged officer was that such valuation was simply not obtained. He relied on the decision of the Supreme Court in the case of Amiya Bala Paul (supra) which held the field at the relevant time. It was held that Page 9 of 15 C/SCA/173/2010 JUDGMENT the AO cannot make reference to the valuer and obtain a report under section 55A of the Income Tax Act. Reference was made in the context of section 142(2) of the Act. We may recall that the statutory provision has since been amended. However, at the relevant time, in view of the said decision of the Supreme Court, the Assessing Officer was entitled to hold a belief that reference to the valuer would not be competent. If, therefore, he bonafide acted on such belief and did not call for the report, he cannot be said to have committed any misconduct. As a quasi judicial authority, he was authorized to compete the assessment in terms of the legal provisions and the applicable law. Even if he had committed error in judgment, the same could be corrected by following the departmental procedure and unless the lapse had an element of doubtful integrity or negligence, departmental proceedings could not have been initiated.
Coming to charge article II, the Inquiry Officer, in our opinion, came to conflicting conclusion. If in his opinion, the charged officer had shown undue hurry in authorizing return of the books of accounts to prevent detection of his misconduct, his later conclusion that component (b) of the charge not being proved is directly conflicting. Be that as it may, we may look at the conclusion of the Inquiry Officer as a whole. In essence, he held that the charged officer ensured released of the books with undue haste to prevent detection of his misconduct. The delinquent pointed out that it was not his authority to release the books of accounts. The order was to be passed by the CIT. He merely had to Page 10 of 15 C/SCA/173/2010 JUDGMENT make a recommendation. The order in fact was passed by the CIT. There is no dispute about this aspect of the mater. In fact, even in the imputation of misconduct, it was alleged that the delinquent with a dishonest motive to prevent detection of the misconduct, recommended release of the books of accounts and documents.
If this much is clear, it immediately emerges that the only role of the delinquent was to make suitable recommendation on the application of the assessee for release of the documents. The ultimate decision was taken not by him but by the CIT. Whatever be his recommendations, he cannot be blamed for even an erroneous order passed by the competent authority. Had there been some misrepresentation or withholding of the relevant material in such recommendation, there would be some possibility of proceeding against the charged officer. However, these were not the allegations made by the department. For merely making a recommendation without there being anything further, the delinquent could not have been held guilty of any misconduct.
It is undoubtedly true that a quasi judicial officer or even a judicial officer can be called upon to answer the allegations of misconduct if there is sufficient material to suggest that the quasi judicial or judicial order was passed with extraneous consideration or some such allegation. This much is clear from the decision of the Supreme Court in the case of K.K.Dhawan (supra). It was held that an officer taking decision in exercise of quasi judicial function is not immune from disciplinary proceedings. However, it was provided Page 11 of 15 C/SCA/173/2010 JUDGMENT as under:
"19. The above case, therefore, is an authority for the proposition that disciplinary proceedings could be initiated against the government servant even with regard to exercise of quasi-judicial powers provided:
i) The act or omission is such as to reflect on the reputation of the government servant for his integrity or good faith or devotion to duty, or
ii) there is prima facie material manifesting recklessness or misconduct in the discharge of the official duty, or
iii) the officer had failed to act honestly or in good faith or had omitted to observe the prescribed conditions which are essential for the exercise of statutory power."
In the case of Zunjarrao Bhikaji Nagarkar (supra), the Supreme Court held and observed that a mere mistake of law or wrong interpretation of law cannot be the basis for initiation of departmental proceedings against a quasi judicial authority. In the said case, the petitioner was discharging his duty as Collector of Central Excise. He was served with a chargesheet for not imposing penalty on an assessee under rule 173Q of the Central Excise Rules, 1944. He challenged the initiation of departmental proceedings. Supreme Court held as under:
"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 Page 12 of 15 C/SCA/173/2010 JUDGMENT proceed against the appellant. There is no other instance to show that in similar case the appellant invariably imposed penalty."
In the case of P.C.Joshi (supra) in the context of a judicial officer granting bail to an accused for which departmental proceedings were initiated against him, the Supreme Court referred to and relied upon a decisions in the case of K.K.Dhawan and in the case of Ishwar Chand Jain (1988) 3 SCC 370 and held and observed as under:
"........That there was possibility on a given act of facts to arrive at a different conclusion is no ground to indict a judicial officer for taking one view and too for alleged misconduct for that reason alone. The Enquiry Officer has not found any other material,which would reflect on his reputation or integrity or good faith or devotion to duty or that he has been actuated by any corrupt motive. At best he may say that the view taken by the appellant is not proper or correct and not attribute any motive to him which is for extraneous consideration that he had acted in that manner. If in every case where an order of a subordinate Court is found to be faulty a disciplinary action were to be initiated, the confidence of the subordinate judiciary will be shaken and the officers will be in constant fear of writing a judgment so as not to face a disciplinary enquiry and thus judicial officers cannot act independently of fearlessly. Indeed the words of caution are given in K. K. Dhawan's case (1993 AIR SCW 1361 : AIR 1993 SC 1478 : 1993 Lab IC 1028) (supra) and A. N. Saxena's case (1992 AIR SCW 1336 : AIR 1992 SC 1333 : 1992 Cri LJ 1940) (supra) that merely because the order is wrong or the action taken could have been different does not warrant initiation of disciplinary proceedings against the judicial officer. In spite of such caution, it is unfortunate that the High Court has chosen to initiate disciplinary proceedings against the appellant in this case."
Under the circumstances, we do not find that the Tribunal committed any error in holding that both the charges were held to have been proved by the Disciplinary Authority.
Page 13 of 15C/SCA/173/2010 JUDGMENT There is one more aspect of the matter, namely, rule 9 of the CCS (Pension) Rules, 1972 reserving right to withdraw pension. Sub-rule (1) thereof provides that the President reserves to himself the right of withholding of pension or gratuity or both, either in full or in part, or withdrawing pension in full or in part, whether permanently or for a specified period and of ordering recovery from a pension or gratuity of the whole or part of any pecuniary loss caused to the Government, if in any departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of service. In the present case, even going by the account of the Inquiry Officer as concurred by the Disciplinary Authority, there was no case of grave misconduct. Cut in pension, even a portion thereof, for a limited period results into serious penalty to a retired Government servant. For example, in the present case, the charged officer would be deprived of 15% of his pensionary benefits for a period of ten years which would undoubtedly cause considerable monetary loss to a retired Government servant. Such penalty could not have been imposed on charges which were not established.
In the result, the petition is dismissed. Rule is discharged. Interim relief is vacated.
(AKIL KURESHI, J.)
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C/SCA/173/2010 JUDGMENT
(MS SONIA GOKANI, J.)
(vjn)
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