Central Administrative Tribunal - Delhi
Kamal Kishore Dhawan vs Union Of India Through on 5 February, 2009
Central Administrative Tribunal Principal Bench OA No. 1179/2008 New Delhi, this the 6th day of February, 2009 Honble Mr. Justice V.K. Bali, Chairman Honble Mr. L.K. Joshi, Vice Chairman (A) Kamal Kishore Dhawan S/o Shri Pyare Lal Dhawan R/o House No. 236, Sector-36A, Chandigarh. Applicant (By Shri G.D. Gupta, Sr. Advocate, and with him Shri S.K. Sinha, Advocate) Versus Union of India through: 1. The Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi- 110 001. 2. Director General of Income Tax, (Vigilance), Dayal Singh Public Library Bldg. 1, Deen Dayal Upadhyaya Marg, New Delhi 110 002. 3. Union Public Service Commission through the Secretary, Dholpur House, Shahjahan Road, New Delhi. Respondents (By Shri R.V. Sinha and Sh. R.N. Singh, Advocates) O R D E R Justice V.K. Bali, Chairman:
Kamal Kishore Dhawan, Group `A Officer of 1977 batch of the Indian Revenue Service, the applicant herein, who claims to have earned his promotions to the post of Deputy Commissioner, Joint Commissioner, Additional Commissioner and then Commissioner of Income Tax immediately when the same were due because of his excellent track record of service, through this Original Application filed by him under Section 19 of the Administrative Tribunals Act, 1985 takes strong exception to the disciplinary proceedings initiated against him in 2003 culminating into order dated 1.4.2008 putting to an end his service career, when he was due for promotion to the post of Chief Commissioner or Director General, Income Tax. In his endeavour to set aside chargesheet dated 28.4.2003 (Annexure A-4), enquiry report dated 27.10.2006 to the extent some of the charges have been held partly proved (Annexure A-3), the disagreement note recorded by the disciplinary authority dated 5.3.2007 (Annexure A-2), and the final order visiting him with the penalty of compulsory retirement dated 1.4.2008 (Annexure A-1), the applicant has raised several issues such as unexplained delay in proceeding against him in 2003 with regard to the events pertaining to the period 1995-96 when he was functioning as Deputy Commissioner of Income Tax (DCIT), Special Range-1, Surat, and the period 1997-98 when he was working as DCIT, Range-2, Surat, illegality of the disagreement note recorded by the disciplinary authority finally holding the applicant as guilty, non-consideration of his representation against the disagreement note, and above all, no misconduct having been found against him by any of the authorities, inasmuch as the allegations subject matter of the charge exclusively pertained to his orders passed from time to time in his quasi judicial capacity, and there being no finding of mala fides recorded against him.
2. Before we may take into consideration the contentions raised by the learned counsel representing the applicant on various aspects of the case, comment and adjudicate the same, it would be useful to trace the background of events culminating into filing of the present Application. The applicant, as set out in the pleadings made in the Application, is Group A officer of 1977 batch of the Indian Revenue Service. He earned his promotions to the posts of Deputy Commissioner, Joint Commissioner, Additional Commissioner and then Commissioner, Income Tax, which would manifest that he has been assessed as a meritorious officer, suitable and fit for the said posts. He was due for promotion to the post of Chief Commissioner or Director General of Income Tax. However, he was issued a preliminary show cause notice seeking explanation regarding alleged lapses/irregularities in eight cases, out of which six cases were completed by him as Deputy Commissioner (Assessment)/Assessing Officer and remaining two, when he was Deputy Commissioner-in-charge of a Range. A copy of the preliminary show cause notice has been placed on record as Annexure A-5. It is the case of the applicant that bare perusal of the show cause notice would reveal that this was a deliberate fault finding enquiry for the reasons best known to the authorities. The alleged lapses were contrary to the legal provisions and facts of the case. The applicant, vide his letter dated 03.01.2001, stated in clear terms that the cases, for which show cause notice was issued, related to several years back and he was not able to give reply without reference to primary/original records, which was followed by other letters dated 01.02.2001 and 09.02.2001 again pointing out that the complete records were not supplied to him nor he was allowed inspection thereof. The applicant, however, on the basis of whatever records were made available to him, submitted his replies dated 09.02.2001 and 12.03.2001. No reply to any of his aforesaid letters was received and instead a chargesheet was issued to him after lapse of about two years i.e. on 28.04.2003. The tone and tenor of the chargesheet revealed that imputations made therein were substantially different from the lapses/irregularities alleged in the preliminary show cause notice. It is the case of the applicant that he was denied the opportunity to rebut new allegations and imputations before the same were thrust upon him in the form of chargesheet. Bare perusal of the articles of charge would show that all the charges were vague and indefinite. None of the allegations in the statement of imputations were supported by any evidence or material on record. In fact, many of the allegations were factually incorrect and not as per law. The applicant was departmentally tried on as many as seven charges framed against him. The same as contained in the chargesheet or the report of the enquiry officer, read as follows:
Article-I That Shri K K Dhawan, while working as Deputy Commissioner of Income Tax, Spl. Range-1, Surat, during the period 1995-96, completed the assessment in the case of Sh. A Sivan for A.Y. 1993-94, U/S 143(3) of the Income Tax Act, in a very casual manner. He made lump sum additions to the manufacturing account without conducting any worthwhile investigations as regards the purchases and sundry creditors and without examining the authenticity of the excise registers. He also failed to initiate mandatory penalty proceedings U/s 271B of the IT Act in this case.
Shri Dhawan thus failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant. He thereby violated the provisions of Rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (conduct) Rules, 1964.
Article-II That Shri K K Dhawan while working as Deputy Commissioner of Income Tax, Spl. Range-1, Surat, during the period 1995-96, passed assessment order U/s 143(3) in the case of M/s. Sidmac Laboratories (India) Pvt. Ltd. for A.Y. 1993-94, without gathering necessary details warranting the various disallowances made in the scrutiny assessment order, with the result that CIT(A)-1, Surat, perforce had to set aside the entire assessment order to be reframed. In his order, Sh. Dhawan also failed to correctly apply the provisions of Section 79 of IT Act, inasmuch as he allowed set off of brought forward business losses of Rs.12,58,194/- of A.Y. 1988-89 against the income of A.Y. 1993-94, in total contravention of the provisions of Section 79 of the IT Act, thus exhibiting gross negligence and total disregard to statutory provisions, and conferring undue benefit to the assessee.
By his above acts, Sh. Dhawan failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant, in contravention of the provisions of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964.
Article-III That Shri K K Dhawan while working asDeputy Commissioner of Income Tax, Spl. Range-, surat, during the period 1995-96, committed the following irregularities while completing assessments U/S 143(3) of the IT Act in the case of M/s. United Phospherous Ltd., for A.R. 1994-95:-
he failed to reduce various ineligible receipts from the profits of the business while entertaining the companys claim of deduction U/s. 80 HHC of the IT Act.
He erroneously held an amount of interest U/s.244A of Rs.42,82,152/- as deductible, having been taxed in an earlier year, whereas only an amount of Rs.35,52,932/- should have been allowed as deductible for A Y 1994-95.
He failed to initiate penalty proceedings U/s 271(1)(c) of the IT Act on major issues in which disallowances from the assessees claims had been made both on legal and factual grounds.
By his above actions, Sh. Dhawan failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant. He thus violated the provisions of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964.
Article-IV That Shri K K Dhawan while working as Deputy Commissioner of Income Tax, Spl. Range-1, Surat, during the period 1995-96, passed order U/s 143(3) of the IT Act in the case of M/s. Arochem Silvassa Ltd for A Y 1993-94 without levying mandatory interest U/s 234A of the IT Act, amoutnig to Rs.4,43,694/-, while determining the taxes payable on completion of scrutiny assessments.
Sh. Dhawan, thereby, failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant, thus contravening the provisions of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964.
Article-V That Shri K K Dhawan while working as Deputy Commissioner of Income Tax, Spl. Range-1, Surat, during the period 1995-96, committed the following lapses in assessment of the case of M/s Ecoplast Ltd, A.Y. 1993-94, which was completed by him U/s. 143(3) of the IT Act:
he passed the assessment order in a grossly negligent manner, without calling for the companys explanation on the disproportionate increase in supervision charges and other expenses.
He failed to reduce the unabsorbed investment allowance of Rs.6,83,679/- pertaining to the eligible Unit from the eligible profits of the Unit, for allowing the correct deduction U/s.80I of the IT Act, leading to an under assessment of income by Rs.1,70,921/-.
By his above acts, Sh. Dhawan failed to maintain absolute integrity and devotion to duty and exhibited 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.
Article-VI That Shri K K Dhawan while working as Deputy Commissioner of Income Tax, Spl. Range-1, Surat, during the period 1995-96, passed assessment order U/s. 143(3) in the case of M/s. Demuric Holdings P Ltd for A Y 1994-95, committing the following lapses:
he inappropriately allowed a set off of speculation loss of Rs.24,31,100/- against the companys long term capital gain.
He blindly accepted the valuation and revised valuation under Rule 1D of the WT Act, with regard to equity shares of United Phospherous Ltd, without obtaining the certified balance sheet of the company on the nearest date available to the valuation date.
He unquestioningly accepted the unsecured loans of Rs.1,95,29,500/- without causing any enquiry as regards Permanent Account Numbers of the loan givers and their creditworthiness.
He failed to correctly reverse interest of Rs.1,07,856/-, allowed U/s 244A of the IT Act in an earlier intimation U/s 143(1)(a) in the same case, while determining the taxes payable in terms of his order U/s 143(3) of the IT Act.
By his above acts, Sh. Dhawan failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant, in contravention of the provisions of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964.
Article-VII That Shri K K dhawan while working as Deputy Commissioner of Income Tax, Range-2, surat, during the period 1997-98, issued inappropriate and irregular directions U/s 144A of the IT Act to the ACIT, circle 2(2), Surat, in the case of M/s. Vijay Fabrics for A Y 1995-96, inasmuch as his directions to allow amendment to the statements of the partner, given in course of survey U/s 133A in this case, from an original lakh metres to lakh rupees, was not actuated by any verification and was also not borne out from the facts of this case.
By his above acts Sh. Dhawan failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant. He, thereby, contravened the provisions of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964. Briefly put, the defence projected by the applicant with regard to each charge has been mentioned in para 4.6 of the Application. Suffice it to say that the applicant denied all the allegations made in the chargesheet, vide his letter dated 27.5.2003. On 17.11.2003 he made a request for inspection of complete case records. He kept on making requests for expeditious disposal of the enquiry proceedings as he was being punished in the form of frequent cross-country transfers and sidelined postings, causing a great mental torture to him as well as his entire family. The education of his children greatly suffered due to frequent transfers from one city to another across the country. Since there was no progress in the enquiry, the applicant approached the Jabalpur Bench of the Tribunal by way of OA No.769/2005 for quashing of the enquiry proceedings on the ground of delay and laches. In the meantime, vide letter dated 14.11.2005 he again wrote to the enquiry officer that the complete records were not shown to him which were in fact allowed by the enquiry officer. He also requested for allowing one Shri Keshav Prasad, retired Member, ITAT, as his defence assistant. The enquiry officer in his proceedings dated 23.11.2005 also noted with concern the delay on the part of the disciplinary authority in non-production of complete records for applicants inspection. To support the aforesaid averment made in the Application, the applicant has annexed copies of letter dated 14.11.2005 and the daily order sheet dated 23.11.2005 as Annexures A-13 and 14 respectively. Again on 5.12.2005, he informed the enquiry officer that all permitted documents were not made available for inspection and the enquiry officer took cognizance of the same in his daily order sheet dated 5.12.2005, copies whereof have been annexed as Annexure A-15 colly. The applicant avers that he was refused to avail the services of Shri Keshav Prasad as defence assistant and he was simultaneously directed to produce defence documents without any further opportunity. Copy of the order of refusal dated 16.12.2005 is annexed with the Application as Annexure A-16. His representation dated 19.12.2005 against the rejection of defence assistance was also ignored. Regular hearing was commenced and concluded on the same day in the absence of defence assistant as well as defence witnesses of the applicant. On 1.2.2006 a general examination of the applicant was made by the enquiry officer again in the absence of his defence assistant and on 8.2.2006 the applicant was made to submit his defence brief. All the documents relating to averments made above have been placed on record. In the meanwhile, the Jabalpur Bench of the Tribunal after allowing two extensions earlier, directed the respondents to complete the enquiry by 20.8.2007 as a last opportunity. The respondents, instead of complying with the directions, preferred to file a writ petition before the Honble High Court of Madhya Pradesh against the orders of the Tribunal, which, vide order dated 24.8.2006 granted time up to 30.11.2006. It was, however, made clear in the said order that no further extension would be granted and non-compliance of the order would amount to violation of directions of the court. The respondents would, however, not complete the enquiry as per the orders of the Tribunal and the High Court, and kept on seeking extension after extension from the High Court. Copies of the orders passed by the Tribunal and the High Court have been placed on records as Annexure A-22 colly. After lapse of more than a year, the applicant was served with copy of the impugned note of disagreement along with the enquiry report dated 27.10.2006 and the second stage advice of CVC on 5.3.2007. It is the case of the applicant that bare reading of the CVC advice as well as the note of disagreement would clearly show that he was held guilty at that stage itself without obtaining his version and without any opportunity of hearing to him, which amounted to prejudging the issues and even deciding upon the penalty in gross violation of the principles of natural justice and the law declared by the Honble Supreme Court. The applicant, however, submitted his detailed reply to the note of disagreement pointing out that the disagreement note of the disciplinary authority is contrary to the facts, material and evidence available on record. It is his case that the disagreement note also did not give any reason as to how the enquiry officers report on all points favourable to him was not acceptable to the disciplinary authority, and that the fact remained that the enquiry officer had exonerated him of almost all charges, as in 4 out of 7 articles of charge, the enquiry officer held that the charges were not proved, while in other 3, although he held the charges as partly proved, he gave a finding in unambiguous terms that the allegations were only of technical nature and did not reflect any mala fide or misconduct on the part of the applicant. Since the enquiry had not been completed and final order not passed in the case even after fixation of time limits by the Tribunal as well as the High Court of Madhya Pradesh, the applicant was compelled to again approach the Jabalpur Bench, which passed a final order on 21.8.2007 in OA No.911/2007 holding that the enquiry proceedings would become non-existent and would be deemed to have become extinct, if the same would not attain finality by 31.10.2007. The High Court of Madhya Pradesh, however, vide order dated 22.4.2008 granted fifth extension to the respondents up to 30.5.2008 imposing a cost of Rs.10,000/- in favour of the applicant. It is the case of the applicant that the essence of the order was that the cost was to be paid to the applicant before any order could be passed in the disciplinary proceedings, but the fact is that the impugned order had been passed on 1.4.2008 even before the date of the Court order, and before payment of cost to the applicant. The cheque of Rs.10,000/- was enclosed with the impugned order when the same was served upon the applicant by registered post on 27.5.2008. It is the case of the applicant that perusal of the impugned order would indicate that the same is mere verbatim reproduction of the note of disagreement and the reply/submissions of the applicant were not at all considered by the disciplinary authority, and that a mere casual reference is made therein to state that the applicant had raised no new contentions, as if his contentions at any stage were considered by the disciplinary authority. After his submissions to the enquiry officer, the applicant got only one opportunity to place his case before the disciplinary authority only after the note of disagreement, and, therefore, it is surprising as to how the disciplinary authority brushed aside the contentions of the applicant by merely stating that nothing new was brought on record by the applicant. It is the case of the applicant that the disciplinary authority had pre-determined the issue without waiting for any reply from the applicant, and that the respondents in fact ignored all the defence documents of the applicant.
3. Shri Gupta, learned Sr. Advocate representing the applicant has primarily raised the following issues:
(i) The allegations against the applicant relate to certain assessments completed by him in his quasi judicial capacity and there is absolutely no evidence on record to even suggest that there was any misconduct on the part of the applicant nor is there any material to show any undue benefit or favour to any assessee. The assessments made by the applicant have been confirmed in appeal by the higher authorities and were actually in favour of the revenue and in some cases, the appellate authority in fact reduced the additions made by the applicant, thus reducing the revenue. The enquiry officer, therefore, rightly held that even in those cases in which the charges are held as partly proved, there was only a technical error and no mala fide or motives or culpable negligence on the part of the applicant. The assessments were also fully in conformity with law declared by various courts up to the Income Tax Appellate Tribunal and the Honble Supreme Court.
(ii) The applicant was greatly prejudiced by the very initiation of disciplinary proceedings at a belated stage as the alleged irregularities related to the assessments completed in the year 1995 in respect of which allegations were made by issuance of charge memo in 2003 and enquiry concluded after five years in the year 2008.
(iii) The disciplinary authority completely disagreed with the findings of the enquiry officer in a whimsical and arbitrary manner and came to the final conclusion of guilt of the applicant without giving any opportunity to him. The impugned order based on the conclusive note of disagreement by the disciplinary authority is stated to be in complete violation of law declared by the Honble Supreme Court.
(iv) The impugned order has been passed without complying with the directions of the Honble High Court of Madhya Pradesh, inasmuch as the cost of Rs.10000/- imposed on the respondents, subject to which a conditional extension was given up to 30.5.2008, was not complied with and that, therefore, the same is non est in the eyes of law.
4. Pursuant to notice issued by this Tribunal, the respondents have entered appearance and by filing their counter reply opposed the cause of the applicant. While giving brief history of the case, it has been averred in the counter reply that the applicant has been engaged in a protracted litigation with the department in respect of two disciplinary proceedings pending against him. The disciplinary proceeding in pursuance of charge sheet dated 28.4.2003 is the subject matter of present Application. This disciplinary proceeding has been concluded by way of penalty of compulsory retirement on the applicant on 1.4.2008. The plea raised by the applicant that the impugned orders have not been passed as per the directions of the High Court of Madhya Pradesh in its order dated 22.4.2008 granting time up to 30.5.2008 to the department to conclude the disciplinary proceedings subject to payment of cost of Rs.10,000/- to the applicant. This penalty order was served on the applicant on 27.5.2008 along with a draft of Rs.10,000/- towards cost. With regard to the plea raised by the applicant that the allegations pertain to certain assessment orders by him in his quasi judicial authority, and, therefore, his actions cannot be subjected to disciplinary proceedings, it is averred that the allegations against the applicant would amount to misconduct being covered under six instances enumerated by the Honble Supreme Court in the case of the applicant only in Union of India v K. K. Dhawan [(1993) 2 SCC 56], where even officers exercising quasi judicial functions were liable to be proceeded with disciplinary proceedings. It has been held in the judgment mentioned above that if the quasi judicial authority acts in reckless and negligent manner conferring undue benefit on others and his actions have been actuated by mala fide intention such authority is liable to be proceeded against. It is the case of the respondents that the disciplinary authority for very cogent reasons disagreed with the findings of the enquiry officer on all the seven articles of charge, and further that the disciplinary authority was right in reiterating its comments as made in the note of disagreement dated 5.3.2007, as no new contentions were raised by the applicant while giving his comments on the note of disagreement, and that while commenting that the applicant had not brought anything new, the disciplinary authority was referring to the earlier opportunities given to him at the time of calling for his version before issuing the chargesheet as also the defence brief filed by him during the course of enquiry proceedings, and, therefore, the averment of the applicant in this regard is incorrect. With regard to the allegation of the applicant that CVC and UPSC also did not apply their mind while giving their respective advices in the matter and that no opportunity was provided to him, it is averred that when the enquiry officer holds the charges to be proved, then that report has to be given to the delinquent officer who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer, and further that in this case also the comments of the applicant were called for on the enquiry officers report, CVCs advice and the disciplinary authoritys views on the report and thus the principles of natural justice were adhered to. The charge of the applicant with regard to delay and laches in issuing chargesheet is also refuted by stating that the chargesheet was issued to him in 2003 and the disciplinary proceedings were concluded in 2008, whereas the matter pertained to assessments completed by him in 1995. It is further averred that the applicant had already raised this ground before the Jabalpur Bench of the Tribunal in para 4.9 of OA No.769/2005, which was duly considered by the Tribunal in its order dated 19.10.2005. With regard to the charge of the applicant that he was not allowed the services of defence assistant and further that defence witness was not examined by the enquiry officer and the enquiry was completed without affording him sufficient opportunity to clarify the issues through experts in income-tax law, it is averred that permission to engage Shri Keshav Prasad as defence assistant was rightly denied as on date of hearing he was a legal practitioner, and moreover, the enquiry officer has very cogently mentioned in daily order sheets dated 16.12.2005 and 2.1.2006 that there was no need for any defence assistant as neither any prosecution witnesses were to be cross examined nor any defence witness was to be examined as the defence witness was unable to attend the hearings. The brief defence projected by the applicant with regard to each charge as mentioned above, has also been refuted by giving counter arguments similar to the ones noted by the disciplinary authority in its disagreement note and the final order. The same, therefore, may not need any mention.
5. The applicant has filed rejoinder to the counter reply filed on behalf of the respondents by and large reiterating the averments made by him in the OA refuting the one contained in the counter reply.
6. We have heard the learned counsel representing the parties and with their assistance examined the records of the case. We may take into consideration the contentions raised by Shri Gupta in reverse order, by first taking the last ground raised by him with regard to passing of the impugned order without complying with the directions of the Madhya Pradesh High Court. Records would reveal that vide orders dated 25.6.2007, the Madhya Pradesh High Court at Jabalpur, after noting the rival contentions of parties with regard to extension of time, observed as follows:
4. Having heard the parties at length, we are of the considered opinion that the application filed by the applicant deserves to be allowed subject to a further payment of Rs.5,000/- as cost to the respondent. This shall ensure compliance of the orders passed by this Court fully and positively by the end of October, 2007. The OA bearing No.911/2006 filed by the applicant before the Tribunal at Jabalpur, came to be disposed of on 21.8.2007 by observing as follows:
5. It is also noticed that the order in this case was reserved on 16.4.2007 and while the case was pending here for pronouncement, the respondents approached the Honble High Court seeking extension of time by another six months and the High Court allowed time upto end of October, 2007, subject to payment of Rs.5000/- to the applicant. In these circumstances, we are of the view that the OA can be disposed of with a direction to the respondents to comply with the order of the Honble High Court dated 25.6.2007 in letter and spirit, and conclude the pending inquiry proceedings against the applicant by 31st October, 2007, failing which it shall be deemed that the entire inquiry proceedings are no more in existence and it would be deemed to have become extinct. With these directions, the OA is disposed of. The respondents, it appears, however, sought yet another extension of time to comply with the directions issued by the Tribunal as noted above, and vide orders dated 22.4.2008 the High Court of Madhya Pradesh while deprecating the attitude of the respondents, however, observed that the court could not close its eyes to the departmental proceedings initiated against the applicant. However, the High Court extended the time till 30.5.2008, subject to payment of cost of Rs.10000/-. It is the case of the respondents that the penalty order was served upon the applicant on 27.5.2008 along with a draft of Rs.10000/- towards costs. This fact is not in dispute. All that thus is pressed into service is that payment of cost was a condition precedent and it is only when the cost was paid that the order in question could be passed. We find no merit in the aforesaid contention of the learned counsel, as the cheque of Rs.10000/- was attached with the impugned order and received by the applicant along with the same before the extended date, i.e., 30.5.2008. The mere fact that the cost was not paid before the order was passed, cannot be said to be non-compliance of the orders passed by the High Court. Shri Gupta, we may mention, when confronted with the factual situation as mentioned above, did not seriously press his contention based upon non-compliance of the orders passed by the High Court with regard to payment of costs before the order was to be passed.
7. Insofar as, the plea raised by the learned counsel representing the applicant that the disciplinary authority completely disagreed with the findings of the enquiry officer in the dissenting note recorded by it on 5.3.2007, thus pre-determining the issue without affording opportunity to the applicant to make representation against the disagreement note is concerned, the same appears to have merit. The report of the enquiry officer placed on record as Annexure A-3 dated 27.10.2006 is detailed one consisting of 55 pages (page 68 to 122 of the paper book). After giving introduction and brief history of the case, as also articles of charge and the statement of imputation of misconduct, the case as set up by the applicant in defending the charges against him, the enquiry officer analyzed the evidence. The enquiry officer opined with regard to all the charges in seriatim. While dealing with various articles of charge, the findings recorded by the enquiry officer are as follows:
Article-I On careful consideration of the evidences produced before the undersigned and submissions made by the PO and CO, I hold this Article of Charge as not proved. Article-II In view of the discussion in the preceding paragraphs & on consideration of evidences produced before me and also submissions made by PO and CO I hold the charge as not proved. Article-III On consideration of the rival arguments no case has been made out by the prosecution to show that the penalty for concealment was required in this case. I, therefore, hold this part of the charge as not proved. Article-IV From the assessment order it is not evident that the CO has treated revised return as statutorily valid as alleged in the imputation. Prosecution has also not produced any clinching evidence that CO has accepted the revised return or considered the income of revised return as acceptable. I therefore do not find the allegation as substantiated. Even for the sake of argument the argument of PO is accepted that the CO has not discussed about rejection of revised return in his assessment order yet there does not appear to be a case of any malafide intentions or undue benefit to the assessee. I therefore, based on documentary evidence and argument of PO andCO hold the charge as not proved. Article-V Considering the fact that the subsequent income was enhanced to the tune of Rs.1.7 lac and which would have caused loss on tax of this income as alleged. As stated above, the matter was complicated and possibility of omission by CO cannot be totally ruled out. I however hold the allegation as substantiated against the CO based on evidence on record and argument of PO and CO. Article-VI CO further submitted that audit objections are routine affairs of the tax department and there are sufficient safeguards provided in IT Act. Therefore, interest of revenue is not jeopardized. CO submitted that it was inadvertent error or technical and rectifiable nature, which is mostly calculation mistake, should not be treated as anything more than simple bona fide mistake or routine nature. While the argument of the CO may be acceptable considering the fact that the income assessed resulted in addition of Rs.75 lacs - which was later upheld by CIT(A) Ex.D-6(iii). However, the evidence on record Ex.S-6 (xiv) i.e. rectification order indicates that an error was committed by the CO which has been admitted by the CO. There are no evidence or any mala fide intention of this rectification by the CO and possibility of inadvertent error cannot be ruled out. Therefore, allegation of failure to maintain absolute integrity etc. under Rule 3(1) of CCS (Conduct) Rules as alleged may not be made out completely. I therefore hold this part of the allegation as partly proved to the extent rectification or error by CO. Article-VII From the above, there does not appear to be enough grounds for sustaining the charge against the CO particularly in view of COs detailed directions at Ex.S-7(xii) and CIT(A) order at Ex.D-7(xi). In view of the discussion in the preceding paragraphs & on consideration of evidences produced before me and also submissions made by PO and CO I hold the charge as not proved. In short, the findings on various articles of charge returned by the enquiry officer in his report are as follows:
Article-I Not proved Article-II Not proved Article-III Partly proved Article-IV Not proved Article-V Partly proved Article-VI Partly proved Article-VII Not proved The disciplinary authority, as mentioned above, disagreed with the findings recorded by the enquiry officer in its dissenting note dated 5.3.2007 (Annexure A-2). While making mention of articles of charge I to VII separately, the disciplinary authority first referred to allegations subject matter of charge, the findings of the enquiry officer and ultimately, gave its own views. While dealing with article of charge I, the disciplinary authority while giving its views, in the ultimate analysis held as follows:
The IOs finding has not been found acceptable and the charge has been viewed as proved. After giving its own views with regard to article of charge II, the disciplinary authority returned the following finding:
The IOs finding has not been found acceptable and the charge has been viewed as proved. With regard to articles of charge III to VII, the ultimate findings of the disciplinary authority, after giving its own views, are as follows:
Article-III The IOs finding has not been found acceptable and the charge has been viewed as fully proved. Article-IV The IOs finding has not been found acceptable and the charge has been viewed as fully proved. Article-V The IOs finding has not been found acceptable and the charge has been viewed as proved. Article-VI In examination of any cash credit introduced into the books, an AO is required to examine (i) the identity of the creditor, (ii) the creditworthiness of the creditor & (iii) the genuineness of the transaction. This duty of an AO has not been adequately discharged as indicated by paras 9 & 10 of the statement of imputation relating to Article VI. This part of the charge thus has been viewed as proved. Article-VII The IOs finding has not been found acceptable and the charge has been viewed as proved. The conclusion arrived at by the disciplinary authority, reads as follows:
In view of the above discussion and for the reasons and to the extent discussed above, the disciplinary authority does not agree with the IOs findings in relation to Articles I to VII of the chargesheet and is of the view that Articles I, II, III, IV, V and VII stand fully proved and Article VI sands substantially proved. (Only part (a) of the charge under Article VI has been viewed as not proved. We are not reproducing the discussion made by the disciplinary authority on articles of charge so as not to unnecessarily burden the judgment, as also for the reason that with regard to each article of charge, the disciplinary authority has drawn a firm conclusion. The conclusion has not been arrived at on each charge separately, like 1st, 2nd, 5th, 6th and 7th articles of charge as proved, whereas 3rd and 4th as fully proved, but collectively as well in conclusion drawn as extracted above. While disagreeing with the enquiry officers findings in relation to articles I to VII, articles I, II, III, IV, V and VII have been held to have been fully proved, article VI having been substantially proved, and only part (a) of charge under article VI has been viewed as not proved. There cannot be any manner of doubt that the disciplinary authority while recording its disagreement note pre-determined the issues without taking into consideration the representation that may have been made by the applicant. This, in our view, clearly amounts to pre-judging the issue. Such a course is not permissible.
8. It is too well settled a proposition of law that while disagreeing with findings of the enquiry officer, the disciplinary authority must arrive at a decision in good faith. He may, while disagreeing with the findings, is required to give reasons for such disagreement, but such a decision has to be a tentative one and not final. A Division Bench of the High Court of Delhi in Commissioner of Police v Const. Pramod Kumar & Others [CWP Nos.2665/2002 & 4593/2001] decided on 12.9.2002, held so. The facts of the case aforesaid reveal that the enquiry report submitted by the enquiry officer was detailed one. He considered all materials on record and arrived at a finding of fact that the delinquent officers were not guilty. The disciplinary authority, however, recorded his positive finding to the effect that upon notice of the entire material on record the respondents were guilty. Nowhere in the findings did he suggest that the same were tentative. It was held that However, while disagreeing with such findings, he must arrive at a decision in good faith. He, while disagreeing with the findings of the Inquiry Officer, was required to state his reasons for such disagreement but such a decision was required to be tentative one and not a final one. In Yoginath D. Bagde v State of Maharashtra & Another [JT 1999 (7) SC 62], the Honble Supreme Court took the view that the decision arrived at by the disciplinary authority while disagreeing with the findings of the enquiry officer has to be tentative. Facts of the case aforesaid reveal that the District Judge, who was the enquiry officer, had recorded that the articles of charge were not proved. Said findings were submitted to the disciplinary committee, which disagreed with the same and a notice was issued to the appellant requiring him to show cause why he should not be dismissed from service. Along with the show cause notice, the reasons on the basis of which the disciplinary committee had disagreed with the findings of the District Judge, were communicated to him, but the disciplinary committee instead of forming a tentative opinion had come to a final conclusion that the charges against the appellant were established. It was held by the Honble Supreme Court that it was not indicated to the employee that the disciplinary committee had come only to a tentative decision and that he could show cause against that too. The employee was required to show cause only against the punishment proposed by the committee, which had already taken a final decision that charges against the employee were proved. Since the disciplinary committee did not give any opportunity of hearing to the employee before taking a final decision in the matter relating to findings on the charges framed against him, it was held that principles of natural justice had been violated. There may be slight difference in the case before the Honble Supreme Court and the one at hand. Whereas, in the present case, the disciplinary authority finally concluded with regard to guilt of the applicant and required him to comment/make representation on the disagreement note, in Yoginath D. Bagde (supra) the employee was given show cause with regard to quantum of punishment, but that, in our view, would not make any difference as surely if the disciplinary authority may have arrived at a conclusion while clearly mentioning that the charges stood proved or fully proved having pre-judged the issue, asking for the comments/representation of the employee would be of no meaning and consequence. In Punjab National Bank & Others v Kunj Behari Misra [(1998) 7 SCC 84], it was held that Principles of natural justice will have therefore to be read into Regulation 7(2). Whenever the disciplinary authority disagrees with the enquiring authority on any article of charge then before it records its findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. We need not refer to other judicial precedents on the issue, as during the course of arguments the proposition of law, as mentioned above, could not be countered by the counsel representing the respondents either on the basis of any rules or judicial precedents. The law is firmly entrenched that if instead of tentative opinion, a final view is taken contrary to the view expressed by the enquiry officer, the opinion has to be tentative, as otherwise it would violate the principles of natural justice.
9. Coming to the next contention of the learned counsel representing the applicant, it would be seen that the applicant vide the same dissenting note was allowed opportunity to furnish his comments/representation, if any, on the enquiry officers report, disagreement note of the disciplinary authority therewith, and CVCs advice dated 8.2.2007. The comments/representation was to be furnished in writing so as to reach the disciplinary authority within twenty days of receipt of the communication, failing which it was to be presumed that the applicant had nothing to state in the matter. It is the case of the applicant canvassed through his counsel that the disciplinary authority had not at all considered the representation made by the applicant against the findings and conclusion arrived at by the disciplinary authority in its disagreement note dated 5.3.2007 and, therefore, too, the final order inflicting the applicant with the punishment of compulsory retirement is wholly illegal, at this stage. It is the positive case of the applicant that he was served with copy of the impugned note of disagreement along with copy of the enquiry report dated 27.10.2006 and the second stage advice of CVC along with the dissenting note of the disciplinary authority dated 5.3.2007. It is further his case that he submitted reply to the note of disagreement in which he had clearly pointed out that the disagreement note was contrary to the facts, material and evidence available on record. Despite the fact that the applicant had made a representation against the views expressed by the disciplinary authority in its dissenting note dated 5.3.2007, the said authority did not take notice of the same. It is rather observed in the impugned order dated 1.4.2008 (Annexure A-1) as follows:
The CO in his reply dated 5.4.2007 did not file any comments on the OM but drew attention to the order dated 24.8.2006 of the High Court at Jabalpur in WP No.1525 of 2006 filed by the department against CAT order dated 20.07.2006 stating that the time was allowed upto 30.11.2006 to complete the disciplinary proceedings from all spectrums but the proceedings have not been concluded by the date. He also pointed out to the subsequent orders of the Honble High Court dated 15.12.2006 and 2.3.2007.
In this regard it may be mentioned that the matter was finally heard by the Honble Court on 11.5.2007 and the Court delivered the judgment on 25.6.2007 directing to assure compliance of order passed by the Court fully and positively by the end of October, 2007.
8. A reminder was issued on 18.07.2007 by US(V&L), CBDT giving another opportunity to the Charged Officer for filing his reply in response to the department OM dated 05.03.2007, within seven days of the receipt of OM. The representation of the CO was received on 9th August, 2007 and was examined and considered. The CO further did not bring anything new on record which has not been considered earlier and, there was nothing new in the representation of the CO which could lead to change in view formed earlier. In paragraph 4.15 of the counter reply filed on behalf of the respondents, it has been averred that the disciplinary authority had not proceeded to pass the penalty order immediately after receipt of CVCs advice, and that the applicant had given his comments on the views of the disciplinary authority and advice of the CVC, which was duly considered while passing the penalty order. In paragraph 4.18 of the reply it has been averred that the disciplinary authority was right in reiterating its comments as made in the note of disagreement dated 5.3.2007 as no new contentions were raised by the applicant while giving his comments on the disciplinary authoritys note of disagreement. It has further been averred that while commenting that the applicant had not brought anything new on record, the disciplinary authority was referring to the earlier opportunities provided to the applicant at the time of calling for his version before issuing the chargesheet as also the defence brief filed by him during the course of enquiry proceedings. Despite the candid admission emanating from the impugned order itself and the pleadings referred to above, the learned counsel representing the respondents at one stage during the course of arguments, submitted that the applicant had not filed representation on merits controverting the findings of the disciplinary authority holding the charges as proved. It was urged that the applicant had only made representation to the effect that the proceedings have become non est because of various orders passed by the Tribunal and the Honble High Court of Madhya Pradesh at Jabalpur.
10. The applicant during the course of hearing filed an affidavit dated 17.9.2008. After giving reference of the orders passed by the Tribunal and the High Court at Jabalpur, it has inter alia been pleaded in the aforesaid affidavit that when the note of disagreement dated 5.3.2007 was received by the applicant on 15.3.2007, he drafted a detailed reply to the note of disagreement on 5.4.2007 and consulted his counsel on the subject, who advised that since as per the orders of the Tribunal and the High Court the proceedings are abated, he need not give any reply. The applicant, therefore, submitted a short reply on 5.4.2007 stating that the proceedings had become extinct as per the orders of the Honble High Court. Thereafter, yet another application for extension of time was filed by the respondents before the High Court. The High Court reserved its judgment which was subsequently delivered on 25.6.2007 granting further extension of time to the respondents up to 31st October, 2007. The respondents thereafter issued a memorandum to the applicant on 18.7.2007 directing him to furnish his comments/representation to the note of disagreement dated 5.3.2007, without, however, mentioning anything about the order dated 25.6.2007 of the Honble High Court. It is averred that the applicant being totally ignorant of the order of the Honble High Court, gave a representation on 6.8.2007 reiterating that the proceedings stood abated as per earlier orders of the Court. Thereafter, it is then averred, the applicant came to know from the counsel of the respondents only that the Honble High Court had passed some order and extended the time up to 31.10.2007. He immediately, with covering letter dated 22.8.2007 forwarded his reply to the note of disagreement, which he had prepared on 5.4.2007, but did not submit the same earlier on the advise of his counsel. It is further averred that the letter dated 22.8.2007 along with its enclosure, i.e., the detailed reply to the note of disagreement, was duly received in the office of Central Board of Direct Taxes vide diary No.3365 dated 27.8.2007. In the list of dates in the OA, the detailed reply prepared on 5.4.2007 has been inadvertently shown as filed on the same date, whereas actually it was submitted along with covering letter dated 22.8.2007. It is then pleaded that the contention of the respondents that the applicants reply annexed with the OA as Annexure A-26 was not filed before the disciplinary authority is misleading and factually incorrect. The applicant, it is averred, on 27.8.2007 made another representation to the disciplinary authority wherein he again made mention of his previous letter dated 22.8.2007 vide which the detailed reply dated 5.4.2007 to the note of disagreement had been submitted and also requested for personal hearing before any final decision.
11. On an earlier occasion, we heard the arguments on 16.9.2008 and reserved judgment. We had also kept the record. While, however, preparing the judgment, we found that representation of the applicant dated 5.4.2007 stated to have been sent by him to the department vide covering letter dated 22.8.2007 against the note of dissent recorded by the disciplinary authority, was not available in the original record, and by passing a speaking order on 19.11.2008 we ordered the matter to be listed for clarification. We may reproduce para 2 of our order aforesaid:
2. We have scanned through the records made available to us, but do not find there any covering letter dated 22.8.2007 nor its enclosure, i.e., reply dated 5.4.2007 to the note of disagreement recorded by the disciplinary authority. Available on records, however, is letter dated 27.8.2007, in which reference of covering letter dated 22.8.2007 has been made by the applicant. No reply to the affidavit filed by the applicant referred to above has also been filed. This Tribunal, before it may pass final order, would like to have clarification from the parties. The covering letter dated 22.8.2007 along with its enclosure is stated to have been received by the office of CBDT vide diary No.3365 dated 27.8.2007. Once, this letter has been received, why the same is missing from records, also needs clarification. We may also mention at this stage that in the impugned order while dealing with the representation of the applicant, reference has been made only to the one stated to have been received by the department on 9.8.2007. There is no mention of the representation sent vide covering letter dated 22.8.2007. In his endeavour to clarify the position, the applicant has filed additional affidavit dated 4.12.2008, wherein it has inter alia been pleaded that he had already categorically stated in his affidavit dated 17.9.2008 that the respondents had duly received the detailed reply dated 5.4.2007, sent with forwarding letter dated 22.8.2007 vide diary No.3365 dated 27.8.2007, and in the meantime, in order to re-affirm this fact, the applicant gave an application to the Director (Administration), CBDT on 3.12.2008 to give an acknowledgement or confirmation of the said receipt, and that the said authority after checking the diary register gave a confirmation of receipt of the said letter dated 22.8.2007 vide which the detailed reply (Annexure A-26) had been filed. Copy of the letter dated 3.12.2008, with endorsement of officers concerned that letter dated 22.8.2007 was received vide the above said diary number in the office of CBDT on 27.8.2007, has been annexed with the affidavit. In letter dated 3.12.2008, it is mentioned that the applicant had dispatched his detailed reply to memo dated 5.3.2007 received from SO (V&L), vide letter dated 22.8.2007, and that the same stood duly received as per receipt register. The applicant requested that he may be given an acknowledgement or confirmation of the same. On the same date, an endorsement has been made on the letter aforesaid, which reads, Checked from Dy. Register. Letter dated 22.8.07 received on 27.8.07.
12. Assistant Commissioner of Income Tax (Hq. Litigation) has filed an additional affidavit dated 5.1.2009, wherein while admitting the claim of the applicant that he had submitted letter dated 22.8.2007 along with its enclosure as detailed in his affidavit dated 17.9.2008, and his further claim that the same was duly received in CBDT vide diary No.3365 dated 27.8.2007, it has been pleaded that the same is not available on record, and, therefore, the nature of documents claimed to have been filed cannot be verified by the department from official records. During the course of arguments, we are told that at the relevant time the applicant was posted at Chennai and that he had sent the letter aforesaid from there only by Speed Post, which was received at Delhi.
13. Even though, letter dated 22.8.2007 may not be on records of the case, but from the pleadings of parties and from accompanying documents placed on records, it is absolutely clear that the applicant had sent letter aforesaid which was received by the respondents on 27.8.2007. The respondents have chosen to give no explanation why the said letter is not on the records of the case. Even the circumstances preceding writing of the letter referred to above would clearly suggest that the same was indeed filed and received. It may be recalled that originally the Tribunal at Jabalpur Bench in OA No.769/2005 had granted six months time to the respondents to complete the proceedings. The time was extended by a period of three months. In the wake of circumstances, when another application was filed before the Tribunal for extension, on 20.7.2006 the following order came to be recorded:
From the affidavit filed by the applicants it is clear that no urgency has been shown by the applicants to complete the disciplinary proceedings expeditiously in consonance with the order passed by this Tribunal in OA No.769/2005. Originally six months time was given, and it was further extended by three months, but during these nine months, there had hardly been any progress in the disciplinary proceedings which had commenced as far back as in 2002-03. Even after the last extension was granted, no tangible steps were taken by the applicants to get the inquiry expedited and complete it without delay. However, as a last opportunity we give one months time from today to the applicants to comply with the order passed by this Tribunal in the aforesaid OA. No further extension will be given. It is seen that the enquiry could not be completed even within the extended period as mentioned above, but this time, perhaps understanding that the Tribunal may not further show any indulgence, the respondents took the matter to the High Court, and vide order dated 15.12.2006 the High Court extended the time till end of February, 2007 subject to payment of cost of Rs.5000/-. When the enquiry could not be completed even by end of February, 2007, yet another application for extension of time came to be filed before the High Court, in which, it is the case of the applicant and not disputed by the respondents, judgment was reserved. In the impugned order itself it has been mentioned that the matter was finally heard by the Honble High Court on 11.5.2007 and the Court delivered its judgment on 25.6.2007 directing to assure compliance of the order passed by it fully and positively by the end of October, 2007. In operative part of the order dated 2.3.2007 in the second application seeking extension by the respondents, the High Court observed as follows:
Mr. S. Dharmadhikari, learned counsel for the petitioner is not in a position to state whether the cost has been paid. We really fail to fathom how an affidavit has not been filed in that regard. However, keeping in view the facts and circumstances of the case we are only inclined to extend the time till 15.4.2007 for complete compliance of the order passed on 24.8.2006 passed in W.P. No.11525 of 2006(s) subject to the condition that the petitioner shall pay a further sum of Rs.5,000/- to the respondents. Thus, the cost of Rs.10,000/- shall be paid. Cost shall be paid by way of bank draft to the respondent Kamal Kishor Dhawan. If the cost is not paid within two weeks hence, the present order shall be deemed to have become extinct. The applicant, it is reasonable to presume, was not aware of the order of further extension, and thus could well be under a bona fide belief that proceedings against him had abated. It appears that whereas order dated 15.12.2006 may have been passed by the High Court after hearing both parties as recorded in para 4 of the order, the other order dated 2.3.2007 may not have been passed after hearing the applicant. Be that as it may, once, the costs which were conditional for extension of time, were not paid to the applicant, he could well be under a bona fide belief that the same since having not been paid, the proceedings had abated. In these circumstances, it was natural for him to respond to the memo dated 5.3.2007 by simply stating that the proceedings had abated against him. It is the positive case of the applicant, and in the circumstances appears to be correct, that he came to know later that the High Court had further extended the time even though, subject to payment of Rs.10000/- as cost, and that being so, it was natural for him at that stage to file detailed comments/representation with regard to the disagreement note dated 5.3.2007. For the reasons that letter dated 22.8.2007 of the applicant is admitted to have been received by the respondents, its non-availability on records without giving any reason as to why the same is missing, thus resulting into drawing an adverse inference against the respondents, as also from the circumstances as mentioned above, in our view, a firm finding of fact can be recorded that the applicant had indeed written letter dated 22.8.2007, which accompanied his detailed comments/ representation against the disagreement note. It is clearly recorded in the letter dated 22.8.2007 that the applicant was enclosing therewith his detailed reply to the memo dated 5.3.2007 without losing any time. The applicant moved another application dated 27.8.2007, which is admitted and is also on records, wherein he referred to his previous correspondence dated 22.8.2007 forwarding therewith his detailed reply to the memo dated 5.3.2007. The applicant in that connection implored for an opportunity of being heard in person before any final decision was to be taken in the matter. It is also mentioned in the letter aforesaid that the request was being made as it would be seen that the entire disagreement note of the disciplinary authority was against facts, material and evidence available on record, which could be better explained only in person. In the impugned order, there is no mention of the averments made by the applicant in his letter dated 27.8.2007, particularly with regard to the previous correspondence of the applicant dated 22.8.2007 forwarding his detailed reply to the memo dated 5.3.2007. If it would have been the case of the department that no letter dated 22.8.2007 was received or that the same did not contain any detailed reply, this fact ought to have been mentioned.
14. Shri R. V. Sinha, learned counsel representing the respondents, in the impressive array of facts as mentioned above, could only raise one contention, and that is that even though, it might have been proved that the respondents had indeed received the letter dated 22.8.2007, but there is no proof of its enclosures, and in particular, detailed reply dated 5.4.2007. We are unable to accept this contention. At every relevant place, the applicant has mentioned that his covering letter contained a detailed reply to the dissenting note dated 5.3.2007. Even in the additional affidavit filed by the respondents, it has been mentioned that some documents/letter dated 22.8.2007 were received in office of CBDT vide diary No.3365 dated 27.8.2007. Once, a finding has been returned by us that the applicant had indeed made a detailed representation against the dissenting note recorded by the disciplinary authority dated 5.3.2007, a consequential finding that the applicant stated nothing against the dissenting note, as is indeed mentioned by the disciplinary authority, has to be returned as incorrect. It may be recalled that the disciplinary authority had noted in the final order that a reminder was issued to the applicant on 18.7.2007 giving another opportunity to him to file his reply to memo dated 5.3.2007 within seven days, and that his representation was received on 9.8.2007, and that the applicant had not brought anything new on record which had not been considered earlier and there was nothing new in the representation which could lead to change in view formed earlier. This finding is factually incorrect. The applicant had brought on record his representation against the dissenting note.
15. In the facts as fully detailed above, we are of the considered view that the applicant has been deprived of giving his comments/representation against the disagreement note, or in other words, the disciplinary authority has returned an incorrect finding that the applicant had submitted nothing with regard to the note of disagreement made by the disciplinary authority. The disciplinary authority in the facts and circumstances as fully detailed above, only considered the reply of the applicant wherein he had mentioned that because of non-compliance of the orders passed by the Tribunal and the High Court, the proceedings had abated. His main reply dated 5.4.2007 sent through covering letter dated 22.8.2007 was not considered at all. While trying to explain the observations of the disciplinary authority that the applicant did not bring anything new on record which had not been considered earlier and that there was nothing new in the representation of the applicant which could lead to change in the view formed earlier, it is interesting to note that the disciplinary authority while mentioning that nothing new was brought on record, tried to explain that it was referring to the earlier opportunities provided to the applicant at the time of calling for his version before issuance of the chargesheet, as also the defence brief by him during the course of enquiry proceedings. All that the disciplinary authority thus considered was the defence projected by the applicant before the charge was submitted, or, at the most, the case as put up by him before the enquiry officer. The requirement of law at the stage when the disciplinary authority was to pass the final order was to consider the objections or representation of the applicant dated 5.4.2007 dealing with the dissent expressed by the disciplinary authority to the report of the enquiry officer. The same, it is proved, even though having been received, never came to be considered.
16. If the Tribunal may proceed to decide this case on the two issues, i.e., the findings recorded in the dissenting note to be final, and secondly that the representation made by the applicant against the note of dissent was never considered by the disciplinary authority, the course to be adopted would be to set aside the dissenting note dated 5.3.2007 as also the impugned order dated 1.4.2008 inflicting punishment upon the applicant, and remit the matter to the disciplinary authority to record a fresh dissenting note, which may be only tentative, and then to proceed further in the matter. Even if only the dissenting note is set aside, the same course shall have to be followed. At one time, we were thinking to adopt that course at this stage and leave it to the disciplinary authority to deal with the other issues pertaining to delay in proceeding against the applicant and non-desirability of proceeding against him because of the allegations pertaining to discharge of quasi judicial duties by him. When, however, put to the learned counsel representing the parties that if the Tribunal may come to a conclusion that the matter needs to be remitted on the grounds as specified above, whereas Shri Sinha, learned counsel for the respondents, would not mind such a course to be adopted, Shri Gupta would, however, contend that this Tribunal may finally go into other issues as well, or else issue a direction to the respondents to promote the applicant. In his endeavour to convince the Court that when an employee is charged after a long period and there are factors, for as well as against him, and in the departmental enquiry, the evidence has been completed, while remitting the matter an order for promotion can be issued, the learned counsel relies on the judgment of the Honble Supreme Court in State of Punjab & Others v Chaman Lal Goyal [(1995) 2 SCC 570]. Having pondered over the course to be adopted, we would choose to decide the whole issue, as it would be difficult for us to order promotion of the applicant, as the charge would be still pending against the applicant if the matter is remitted for the course to be adopted, as mentioned above.
17. Insofar as, the plea of the applicant with regard to delay is concerned, the same can be divided in two parts, the first would be delay in initiation of proceedings, whereas the second would be delay in concluding the proceedings. Insofar as, the second part of the case is concerned, that, in view of various orders passed by the Tribunal and the High Court referred to above, has to be decided against the applicant. It may be recalled that the applicant filed OA No.769/2005 before the Tribunal at Jabalpur, which was disposed of on 19.10.2005 directing the respondents to conclude the departmental enquiry within a period of six months. The respondents thereafter obtained extension of time by three months through a miscellaneous application. They moved yet another misc. application vide which another extension of one month was obtained on 20.7.2006. Still there was no compliance, and the respondents instead moved the High Court seeking further extension of time for completing the departmental proceedings. The prayer was allowed by the High Court in WP No.11525/2006(s) and time was extended till the end of first week of November, 2006, making it clear that the proceedings should be concluded from all spectrums and no further extension would be granted. However, the respondents did not comply with the order, and instead moved yet another application seeking extension of time, but this time the High Court extended the time vide order dated 15.12.2006 upto 28.2.2007 subject to payment of costs of Rs.5000/- to the applicant. However, the proceedings were not completed by 28.2.2007, and the respondents again pressed for another extension of time, which was extended upto 15.4.2007 subject to payment of a further sum of Rs.5000/- as cost to the applicant, vide order dated 2.3.2007. It was mentioned in the order that if the total cost of Rs.10000/- was not paid within two weeks, the order dated 2.3.2007 would be deemed to have become extinct. Vide another misc. application No.1190/2007 before the High Court, the respondents sought extension of time for a period of six months to fully comply with the order dated 2.3.2007. The High Court vide order dated 25.6.2007 allowed the prayer of the respondents and granted extension of time as sought for, subject to a further payment of Rs.5000/- as cost to the applicant. The respondents were directed to ensure compliance of the orders passed by the High Court fully and positively by the end of October, 2007. From the events as given above, it is clear that the respondents were successful in obtaining an order from the High Court granting time to them to finalise the proceedings by the end of October, 2007, by which time, admittedly the proceedings were completed. The plea of the applicant for quashing the proceedings on account of delay in finalisation of the same ultimately resulted only in partial success, when a time bound direction came to be issued and within the time last prescribed by the High Court, the proceedings were completed. This aspect of the case, in our considered view, cannot be re-agitated by the applicant. The second aspect is with regard to delay in initiation of the proceedings. The two OAs of the applicant bearing Nos.769/2005 and 911/2006, it may appear from records of the case, were for quashing the chargesheet on the ground of delay caused in both initiation and conclusion of the proceedings. In the order dated 21.8.2007 in OA No.911/2006, it is clearly recorded that the applicant had approached the Tribunal so as to quash the disciplinary proceedings initiated against him for certain alleged omissions committed by him during the period 1995 to 1998. Whereas, it may be true that the only aspect gone into by the Tribunal or for that matter, even the High Court, was delay in finalising the proceedings, and the issue with regard to delayed initiation of proceedings was not gone into, but it appears that such a plea was raised by the applicant. The applicant has not placed on records copies of the two OAs filed by him in the Jabalpur Bench. Once, there was a plea raised by the respondents that the matter with regard to delay has achieved finality in view of the orders passed by the Tribunal or the High Court at Jabalpur, the applicant ought to have placed on records his two OAs to show that the plea with regard to delayed initiation of proceedings was not a subject matter of dispute before the Tribunal and the High Court at Jabalpur. The applicant has indeed filed a rejoinder, but there as well, nothing like that the plea with regard to delay in initiation or conclusion of the proceedings was not taken, has been mentioned. From the tenor of the orders passed, referred to above, and in particular the order dated 21.8.2007 in OA No.911/2006, it appears that the plea to quash the charge was also based on the ground of proceeding against the applicant in 2003 for the alleged acts of omission pertaining to the period 1995 to 1998. Be that as it may, the plea with regard to delayed initiation of departmental proceedings vis-`-vis the events was available to the applicant at that stage. Such a plea having not been raised, the applicant would not be permitted at this stage to agitate the matter. Even though, strict provisions of Code of Civil Procedure may not be applicable, but this Tribunal can take the view that all causes of action have to be joined in one lis, and that a party cannot be permitted to seek the same relief based on different grounds in different petitions. Further, in case, this Tribunal may hold initiation of proceedings to be delayed, warranting quashing of the charge, the orders passed by the Tribunal and the High Court would be as if non-existent. Once, the applicant has accepted the orders, as referred to above, and the respondents were allowed to conclude the proceedings by the specified period, during which period they did complete the proceedings, the ground of delayed initiation of proceedings, in our considered view, cannot be taken into consideration at this stage.
18. Coming now to the most crucial issue that the allegations subject matter of charge, all pertained to the orders passed by the applicant which were quasi judicial in nature, it may be observed at the very outset that it is not in dispute that all the allegations against the applicant indeed pertained to his official duties while dealing with cases under provisions of the Income Tax Act discharged by him in quasi judicial capacity. To recapitulate, article-I of the charge was that during the period 1995-96 the applicant completed assessment in the case of Sh. A. Sivan for the assessment year 1993-94 u/s 143(3) of Income Tax Act in a very casual manner, and that he made lump sum additions to the manufacturing account without conducting any worthwhile investigations as regards the purchases and sundry creditors and without examining the authenticity of excise registers, and further that the applicant failed to initiate mandatory penalty proceedings u/s 271B of the IT Act. In article-II of charge the allegation against the applicant is that during the period 1995-96 he passed assessment order u/s 143(3) in the case of M/s Sidmac Laboratories (India) Pvt. Ltd. for the assessment year 1993-94. Article-III of charge is that the applicant during the period 1995-96 committed irregularities while completing assessments u/s 143(3) in case of M/s United Phospherous Ltd. for the assessment year 1994-95. Article-IV is with regard to the applicant passing order u/s 143(3) without levying mandatory interest u/s 234A in the case of M/s Arochem Silvassa Ltd. for the assessment year 1993-94. Article-V is that during the period 1995-96 the applicant committed lapses in assessment of the case of M/s Ecoplast Ltd. for the assessment year 1993-94. Article-VI is that during the period 1995-96 the applicant passed assessment order u/s 143(3) in case of M/s Demuric Holdings P. Ltd. for the assessment year 1994-95, committing some lapses. Article-VII also pertains to the applicant issuing inappropriate and irregular directions u/s 144A to ACIT, Circle 2(2), Surat, in case of M/s Vijay Fabrics for the assessment year 1995-96. Even though, after reproducing each article of charge, it has been mentioned that the applicant failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant in contravention of provisions of rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of CCS (Conduct) Rules, 1964, there are no allegations that while passing various orders or conducting proceedings as mentioned above, the applicant had mala fide intentions or had passed the orders on extraneous considerations, or that the said orders were an outcome of gross negligence, but for article-II of charge wherein it has been mentioned that the applicant had failed to correctly apply the provisions of Section 79 of Income Tax Act, inasmuch as he allowed set off of brought forward business losses of Rs.12,58,194/- of assessment year 1988-89 against the income of assessment year 1993-94, in total contravention of provisions of Section 79, thus exhibiting gross negligence and total disregard to statutory provisions, conferring undue benefit to the assessee.
19. To be precise, the seven articles of charge can be put in three categories, i.e., (i) not passing appropriate orders or passing the same in a casual manner; (ii) committing irregularities or lapses; and (iii) exhibiting gross negligence and total disregard to statutory provisions and conferring undue benefit upon the assessee. Article-I alleges the applicant to have passed the order in a casual manner. Article-II alleges the applicant to have exhibited gross negligence and total disregard to statutory provisions, thus conferring undue benefit upon the assessee. Article-III alleges him to have committed irregularities (a), (b) and (c) mentioned in the article. The allegation in Article-IV is that the applicant had passed improper order as he had not levied mandatory interest u/s 234A. Article-V deals with lapses (a) and (b) enumerated in the article itself. Although styled as a lapse, while, however, mentioning the lapse enumerated at (a), it has been mentioned that the applicant passed the assessment order in a grossly negligent manner, without calling for the companys explanation on the disproportionate increase in supervision charges and other expenses. Article-VI deals with lapses (a), (b), (c) and (d) mentioned in the article. Article-VII deals with inappropriate and irregular directions u/s 144A. It would be seen that it is only article-II and part (a) of article-V in which the allegation against the applicant is of gross negligence. Whereas in article-II, it is gross negligence for the reason that the applicant totally contravened the provisions of Section 79 of I.T. Act conferring undue benefit on the assessee, gross negligence in part (a) of article-V is attributed to the applicant for the reason that he did not call for the companys explanation on the disproportionate increase in supervision charges and other expenses. Before we may further deal with the matter, we may mention that the mere use of language employed in rule like that the applicant had failed to maintain absolute integrity and devotion to duty and exhibited conduct unbecoming of a government servant in total contravention of provisions of rules, is not enough. The core allegations ought to have been pointing towards definite acts of omission and commission which may show that the employee had not maintained absolute integrity and devotion to duty or exhibited conduct unbecoming of a government servant. It would be thus seen that it is only article of charge-II and part (a) of article of charge-V that may contain allegation against the applicant of having shown gross negligence. In article-II the gross negligence, it is stated, had benefitted the assessee. Surely, if the applicant may have unduly benefitted the assessee, his case may not be covered under protection of acting in quasi judicial capacity. We shall deal with that issue, but suffice it to mention at this stage that none of the other articles of charge are such which may even remotely show that the applicant had any culpable intentions, or had passed orders on extraneous considerations.
20. Insofar as, Article-II is concerned, it is the case of the applicant that the allegation that assessment was completed without gathering necessary details is completely vague and ex facie factually incorrect, and that details running into as many as 226 pages were gathered and placed on record and assessment was completed only after due examination and verification of the same, as would be evident from the order sheet Annexure A-33, as also discussion in the assessment order Annexure A-34. It is further the case of the applicant that even though, on an appeal filed against the said order by the assessee and not by the department, the order may have been set aside by CIT (A), but the same was on flimsy grounds. In any case, when on remand, the assessing authority, successor of the applicant, passed the order disallowing set off under Section 79, as was allowed by the applicant, the appeal came to be filed by the assessee and the order passed by the assessing authority taking a view contrary to that of the applicant was set aside by the appellate authority. The set off under Section 79 was allowed and the order of the applicant was upheld, and that being so, the enquiry officer had rightly held that it was a case of difference in perception of views of the two authorities, and, therefore, the charge was not proved.
21. We have minutely examined the records of the case. Order passed by the applicant subject matter of article of charge-II has been placed on records as Annexure A-34. Perusal of the same would show that the deduction of Rs.71,970/- claimed by the assessee on account of sales-tax liability outstanding as on 31.3.1991 was disallowed by the applicant. The assessee had also claimed a sum of Rs.3,26,640/- under the head staff welfare expenses. The applicant in his order allowed the same only to the extent of Rs.25,000/-, disallowing the rest. Expenditure of Rs.70,000/- claimed by the assessee as rent paid for flat was also disallowed. The assessee also claimed expenses incurred on repairs of building to the tune of Rs.19,075/-. The same was also disallowed. The assessee claimed Rs.7,230/- against hypothecation of stocks, which was allowed and added back. The applicant also allowed set off of Rs.12,88,292/- as unabsorbed business losses for the assessment years 1988-89 and 1989-90. The order passed by the applicant dated 30.11.1995 was subject matter of challenge by the assessee M/s Sidmac Laboratories (India) Ltd. to the extent of addition of Rs.7,230/- made by the applicant, which was the difference between value of raw material stock submitted by the appellant to the bank and the stock as reflected in the balance sheet of the appellant. The appellate authority while briefly noting the contentions raised by the appellant, after giving the background of the case culminating into filing of the appeal against the order dated 30.11.1995 passed by the applicant, recorded a short order dated 14.8.1997, which reads as follows:
The perusal of this impugned assessment order also goes to show that there is a decline in gross profit rate and this matter has been dealt by the assessing officer on page-1, paragraph-3 of this impugned assessment order. No concrete reasons have been assigned by the assessing officer in coming to the conclusion, to which he has come. It is also seen that other additions like those made under the head staff welfare and on account of Guest House has also been made by the assessing officer without assigning any concrete reasons. Under the circumstances, this assessment order is hereby restored to the file of the assessing officer to re-frame a fresh assessment order after going into all the points as he deems fit after giving sufficient opportunity to the appellant to represent his case and as per the provisions of law. On remand, the assessing authority, the successor of the applicant, indeed held that provisions of Section 79 were applicable in relation to the loss of previous year ending on 31.3.1989 and the same was not allowed to be carried forward to set off against the profit for the year ending on 31.3.1993. It is undisputed that the order aforesaid dated 30.11.1995 was challenged by the assessee M/s Sidmac Laboratories before the appellate authority, and vide orders dated 9.1.2002 (Annexure A-37) it was clearly held that the assessing officer had been in error in invoking Section 79 in the facts of the case. The conclusion drawn by the appellate authority reads as follows:
I agree with the above submissions and hold that the A.O. has been in error in invoking the section 79 under the facts of the case. It may be true that the revenue may have challenged this order of the appellate authority in the higher forum, but the fact remains that the view taken by the applicant as regards applicability of provisions of Section 79 was upheld in appeal preferred by the assessee. The enquiry officer, it may be recalled, after thorough discussion, held the charge as not proved. In the dissenting note and the final order passed by the disciplinary authority, which are verbatim the same, this charge has, however, been held to be proved. While disagreeing with the enquiry officer, the disciplinary authority inter alia observed as follows:
It is not a question of difference in perception between the CO and the CIT (A), but that the CO failed to carry out the basic requirements of verification and investigation. An AO is required to pass a speaking assessment order, mentioning clearly his reasons for disallowance/s and/or arriving at any conclusion, this was not so done by the CO.
As regards the COs defence regarding invoking of S.79, the Deptt. has not accepted the finding of the CIT (A) on the reassessment order and has preferred an appeal before the ITAT.
.The fact that the disallowance has been deleted by the CIT (A) subsequently does not absolve the CO of the charge made in the memorandum. The PO has also pointed out that it has been informed by the O/o the CCIT, Surat that the Department has not accepted the said order of CIT (A) and filed a second appeal with the ITAT. The disciplinary authority then goes on to hold the observations made by the enquiry officer that there had been no under-assessment or escapement of income to be incorrect and irrelevant, firstly, since it was the applicants conduct which was in question regardless of the loss of revenue, and secondly, since under the I.T. Act, losses incurred in any assessment year are allowed to be carried forward to be adjusted against the income/s of later (successive) assessment years, it cannot categorically be said that no loss of revenue has resulted. We are surely not dealing with as to which of the two views, i.e., the one taken by the assessing authority, or the one taken by the appellate authority, may be correct, as that is not in the domain of this Tribunal. Suffice it, however, to mention that the disciplinary authority disagreed with the views expressed by the enquiry officer primarily on two grounds. Whereas, one ground pertains to merits of the case, the other is that the order passed by the applicant was not a speaking order. Insofar as, merits are concerned, we would not make any comments, as already noted above, but for to say that if the appellate authority had taken the same view as was taken by the assessing authority, it cannot be a case of mala fides or of gross negligence and total disregard to the statutory provisions, and conferring undue benefit to the assessee. Such is not even the finding of the appellate authority, even though while disagreeing with the views expressed by the enquiry officer, the disciplinary authority has held the charge to have been proved. If the applicant was to be charged with gross negligence and exhibiting total disregard to statutory provisions and conferring undue benefit to the assessee, it is surprising why the appellate authority has not been charge-sheeted and the applicant has been singled out. With regard to other charges, we may only mention that it is the positive case of the applicant that orders of assessment made by him which were subject matter of charge, were upheld by higher authorities, and in most of the cases, it is the assessee who went in appeal against the orders passed by the applicant, which would clearly rule out any favour or conferring undue benefit to the assessee.
22. From the discussion made above, it is apparent that even the department would not attribute extraneous considerations to the applicant in passing various orders subject matter of articles of charge-I to VII, as mentioned above. The orders passed by him have been leveled, at the most, to be containing some irregularities or lapses. Insofar as, article of charge-II and part (a) of article of charge-V are concerned, the same, at the best, and as per the case of the respondents, is gross negligence, and further also that the same, as far as charge-II is concerned, resulted into conferring undue benefit to the assessee. It is the negligence thus, which resulted in some benefit to the assessee, and not any extraneous considerations. We are in a position, on the basis of discussion made above, to return a finding that the present may not be a case of gross negligence nor the one conferring any undue benefit upon the assessee as well. Once, the order is upheld on merits, mere fact that reasons were not recorded may render the same to be illegal, but the same on that count cannot be said to be for conferring undue benefit upon the assessee. Insofar as, merits of the case are concerned, we have already mentioned that the disciplinary authority perhaps was not justified to hold that the order passed by the applicant was incorrect or against law, till such time at least the appeal filed by the revenue before ITAT was allowed, and we may mention that we have not been informed as to what is the fate of the appeal filed by the revenue. We are of the considered view that the disciplinary authority in departmental proceedings could not go into the legality of the order passed by the applicant, particularly when the same was upheld in appeal, even though against which a further appeal might have been filed by the revenue. Still further, the discussion on merits by the disciplinary authority would, at the most, make it a case where the applicant may have fallen into legal error, and nothing else.
23. Insofar as, article-V is concerned, the allegation against the applicant is that while working as Deputy Commissioner of Income Tax, Spl. Range-1, Surat during the period 1995-96, he committed lapses in assessment of the case of M/s Ecoplast Ltd. The charge or lapse enumerated in clause (a) of article-V is that the applicant passed the assessment order in a grossly negligent manner, without calling for the companys explanation on the disproportionate increase in supervision charges and other expenses. The enquiry officer while making a mention of the case of the department, observed as follows:
The allegation in charge contains two parts. The first part is on lapses of CO in passing assessment order without calling for Companys explanation on disproportionate increase in supervision charges and other expenses in respect of M/s Eco Plast Private Limited. It has been alleged that despite abnormal increases in various expenses, no explanation was obtained by the CO while examining their account and assessing the total income of the case under scrutiny. While making a mention of the defence projected by the applicant, the enquiry officer observed as follows:
The CO while defending has relied on his own order sheet Ex.D-5(i) and Ex.S5/(v) wherein he has written, why increased for the expenses. The CO has also defended that he called for the various details as is recorded that the same was submitted in a separate folder by the assessee. The CO has also contended that the prosecution has not suggested that any particular expenditure was wrongly allowed but alleged that reason for increase was not enquired. The CO has further argued that what it is to be seen is that expenditure must be wholly and exclusively for the purpose of business The enquiry officer on rival contentions of PO and CO, observed thus:
It is somewhat difficult to believe the argument of PO that the CO has not examined the detailed folders submitted by the assessee, as the same was submitted at the instance/direction of CO, which finds a mention in the order sheet.
It has also not been brought out by the prosecution that if the CO has wrongly allowed the deduction of the amount as alleged then what was the correct admissible amount which would have resulted in under assessment of income or escapement of tax revenue thereby undue benefit to the assessee. The evidence on records indicates that the CO has called for the details. The arguments of prosecution are therefore not sustainable. I therefore based on the evidence on record hold this part of the charge as not proved (emphasis supplied). The disciplinary authority, it would be seen from the observations made or findings returned by it, accepted that the assessee had given details of expenses, but went on to hold that despite abnormal increase in the said expenses, no explanation was obtained by the applicant while examining the accounts and assessing the total income of the case under scrutiny, and that the five-fold increase in supervision charges and almost 100% increase in other expenses in the current year compared to the accounts of the preceding year should have been inquired into assiduously by him and a reasonable conclusion should have been drawn on the nature, reasonableness and genuineness of the expenditure incurred and claimed, and further that the applicant was grossly negligent in not putting across to the assessee any query as regards the abnormal increase in the above expenses compared to the preceding year. We are distressed to find and note that even though, the enquiry officer while making a reference to the defence projected by the applicant made a mention of order sheet Ex.D-5(i) and Ex.S5/(v) where he had written why increased, and while keeping in view the same, held that it was difficult to believe the argument of the PO that the applicant had not examined the detailed folders submitted by the assessee, as the same were submitted at the instance/direction of the applicant, which finds mention in the order sheet (emphasis supplied). The disciplinary authority took note of the finding of the enquiry officer pertaining to applicant calling for details, while completely forgetting that such details were made available to the applicant at the instance/directions of the applicant himself, which directions were made so as to know reasons for the entries. We may, once again, mention that while taking note of the defence projected by the applicant the enquiry officer had made a pertinent reference to the order sheet recorded by the applicant, and on that basis only returned a finding that it was difficult to believe the argument of the department that the applicant had not examined the detailed folders submitted by the assessee, as the same were submitted at the instance/directions of the applicant, which finds mention in the order sheet. We are conscious that this Tribunal may have limited jurisdiction in the powers conferred upon it, while making judicial review of the orders passed by departmental authorities, but surely, in case of a finding which might have been returned by completely ignoring the evidence, in the present case in the shape of documents, and by further misreading and misinterpreting the observations made by the enquiry officer in his report, thus in a way not giving any reason for disagreeing with the finding returned by the enquiry officer on that issue, this Tribunal would have ample power to look into the same. No court or tribunal can close its eyes to the stark realities and blindly follow the findings returned by disciplinary authorities, howsoever grossly unjust and against records the same may be. It has been the consistent case of the applicant that the charge against him that he had passed the assessment order without calling for the companys explanation on the disproportionate increase in supervision charges and other expenses is factually incorrect. It is his positive case that he had raised a query about the increase in the expenses, which would be evident from the use of words why increased in the order sheet dated 20.7.1995 at page 472 of the paper book. It is also his case that from the same order sheet Annexure Rej-V/I, it would be seen that all other requisite details necessary for completion of assessment were duly called for, thoroughly examined before accepting and, therefore, the assessment completed most carefully and there was no negligence involved. We have seen order sheet dated 20.7.1995. Relevant part of the order sheet aforesaid reads, Details of packing material, repairs, commission other expenses (why increased). We may also mention that the enquiry officer in his report had also mentioned that the department had not brought out that if the applicant had wrongly allowed deduction of the amount as alleged, then what was the correct admissible amount which would have resulted in under-assessment of income or escapement of tax revenue that may unduly benefit the assessee. The disciplinary authority, even though it was not the case of the department that as to what was under-assessment of income or escapement of tax revenue and in what manner the applicant might have benefitted the assessee, however, mentioned that no explanation was obtained by the applicant while examining the accounts and assessing the total income of the case under scrutiny, and that the five-fold increase in supervision charges and almost 100% increase in other expenses in the current year compared to the accounts of the preceding year should have been inquired into assiduously by him and a reasonable conclusion should have been drawn on the nature, reasonableness and genuineness of the expenditure incurred and claimed, and further that the applicant was grossly negligent in not putting across to the assessee any query as regards the abnormal increase in the above expenses compared to the preceding year. We may reiterate that it was not even the charge against the applicant.
24. It may not be necessary to refer to other articles of charge as it is only under two charges, i.e., charge-II and part (a) of charge-V that the applicant, if at all, could be departmentally proceeded while exercising quasi judicial functions, but we may hasten to add that insofar as article-I of charge is concerned, the applicant had made assessment at Rs.1,50,000/- higher than the returned income. This order was passed in favour of revenue. Aggrieved, the assessee went in appeal and the CIT (A) confirmed the addition but chose to reduce it just one-half at Rs.75,000/-. The assessment made by the applicant was more in favour of revenue than even by the appellate authority. In article-III against nil income returned by the assessee, the applicant made assessment at Rs.3.04 crores bringing in revenue of about Rs.2.49 crores, and the additions made by him were confirmed in appeal by CIT (A) in his order (Annexure Rej-III/iii). With regard to allegation in article-VI, against the returned income of Rs.30.29 lakhs the applicant completed the assessment at a taxable income of Rs.99.93 lakhs in a detailed speaking order (Annexure R-VI/i) and the major addition of Rs.74.88 lakhs was confirmed in appeal by CIT (A) dismissing the assessees appeal. This order passed by the applicant was also in favour of revenue, and the assessee was aggrieved of the same and not the department. We are making mention of these charges so as only to show that most of the orders passed by the applicant subject matter of charge against him, were in favour of revenue, and that being so, there was not even a remote possibility of the applicant having any extraneous considerations in mind.
25. On the facts and findings as mentioned above, we may now examine the question debated before us on the anvil of rules and judicial precedents. The applicant has been departmentally tried on the allegations, as mentioned above, under rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964 (hereinafter to be referred as the Rules of 1964). The same reads as follows:
(1) Every Government servant shall at all times
(i) maintain absolute integrity;
(ii) maintain devotion to duty; and
(iii) do nothing which is unbecoming of a Government servant. The following acts or conduct of a government servant may amount to misconduct, in view of Notes on CCS (Conduct) Rules, 1964 3rd Edition, 1980, published by the Government of India, MHA, DP&AR, below rule 3-C of the 1964 Rules:
(23) Acts and conducts which amount to misconduct. The act or conduct of a servant may amount to misconduct (1) if the act or conduct is prejudicial or likely to be prejudicial to the interests of the master or to the reputation of the master;
(2) if the act or conduct is inconsistent or incompatible with the due or peaceful discharge of his duty to his master;
(3) if the act or conduct of a servant makes it unsafe for the employer to retain him in service;
(4) if the act or conduct of the servant is so grossly immoral that all reasonable men will say that the employee cannot be trusted;
(5) if the act or conduct of the employee is such that the master cannot rely on the faithfulness of his employee;
(6) if the act or conduct of the employee is such as to open before him temptations for not discharging his duties properly;
(7) if the servant is abusive or if he disturbs the peace at the place of his employment;
(8) if he is insulting and insubordinate to such a degree as to be incompatible with the continuance of the relation of master and servant;
(9) if the servant is habitually negligent in respect of the duties for which he is engaged;
(10) if the neglect of the servant though isolated, tends to cause serious consequences.
The following acts and omissions amount to misconduct. (1) Wilful insubordination or disobedience, whether alone or in combination with others, to any lawful and reasonable order of a superior.
(2) Infidelity, unfaithfulness, dishonesty, untrustworthiness, theft and fraud, or dishonesty in connection with the employers business or property.
(3) Strike, picketing, gherao Striking work or inciting others to strike work in contravention of the provisions of any law, or rule having the force of law.
(4) Gross moral misconduct Acts subversive of discipline Riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline.
(5) Riotous and disorderly behaviour during and after the factory hours or in business premises.
(6) Habitual late attendance.
(7) Negligence or neglect of work or duty amounting to misconduct Habitual negligence or neglect of work.
(8) Habitual absence without permission and over-staying leave.
(9) Conviction by a Criminal Court. A government employee can be departmentally tried for any of the specified misconduct enumerated above. No straitjacket definition of misconduct can be given, but as generally and normally understood, it is transgression of some established and definite rule of action. It has been defined in Blacks Law Dictionary, Sixth Edition at page 999, thus:
A transgression of some established and definite rule of action, a forbidden act, a dereliction from duty, unlawful behaviour, wilful in character, improper or wrong behaviour, its synonyms are misdemeanor, misdeed, misbehavior, delinquency, impropriety, mismanagement, offense, but not negligence or carelessness. Misconduct in office has been defined as:
Any unlawful behaviour by a public officer in relation to the duties of his office, willful in character. Term embraces acts which the office holder had no right to perform, acts performed improperly, and failure to act in the face of an affirmative duty to act. In P. Ramanatha Aiyars Law Lexicon, 3rd edition, at page 3027, the term misconduct has been defined as under:
The term misconduct implies, a wrongful intention, and not involving error of judgment.
Misconduct is not necessarily the same thing as conduct involving moral turpitude.
The word misconduct is a relative term, and has to be construed with reference to the subject matter and the context wherein the term occurs, having regard to the scope of the Act or statute which is being construed. Misconduct literally means wrong conduct or improper conduct.
26. The Honble Supreme Court, it appears, in the case of the applicant only, in Union of India & Others v K. K. Dhawan [(1993) 2 SCC 56], had an occasion to deal with the question as to whether disciplinary proceedings can be initiated against an employee while discharging quasi judicial functions. The facts in brief reveal that the applicant at the relevant time was working as Income Tax Officer, Muktsar. He completed certain assessments. A charge memorandum dated May 2, 1989 was served on him to the effect wherein it was proposed to hold an enquiry against him. Article-I of charge was that the applicant while functioning as ITO during 1982-83 completed nine assessments in an irregular manner, in undue haste and apparently with a view to conferring undue favour upon the assesses concerned. In each of the nine cases, the details relating to misconduct or misbehaviour were furnished. Necessary documents in support of the allegations were also enclosed. The applicant, aggrieved of the memorandum proposing to hold departmental enquiry against him, filed an Original Application before this Tribunal. Vide interim order dated February 8, 1991 the Tribunal directed the respondent-Union of India to open the sealed cover immediately and implement the recommendations of DPC insofar as it pertained to the applicant and to promote him to the post of DCIT, and vide final order dated March 22, 1991 it was held that the action taken by the applicant pertained to his quasi judicial functions and should not have formed the basis of disciplinary action. Memorandum dated May 2, 1989 was quashed. Interim directions as referred to above were made absolute. Aggrieved, the Union of India filed appeal before the Honble Supreme Court. While dealing with the case, the Honble Supreme Court observed that substance of the charge against the applicant was that he completed nine assessments in an irregular manner, hastily with a view to confer undue favour upon the various assessees. In the context of the facts as mentioned above, the pertinent question that came to be debated and adjudicated upon was as to whether the applicant could be departmentally proceeded while discharging quasi judicial functions. It was urged on behalf of the applicant that even if the order may be wrong, the same could be subject matter of appeal or revision, but once, the allegations pertained to functions discharged by him in quasi judicial capacity, he could not be departmentally proceeded at all. The Honble Supreme court while referring to its earlier decisions, while holding that an officer who exercises judicial or quasi judicial powers acts negligently or recklessly or in order to confer undue favour on a person, is not acting as a judge, culled out the following six instances where an officer could be departmentally proceeded even while exercising judicial functions:
(i) Where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty;
(ii) if there is prima facie material to show recklessness or misconduct in the discharge of his duty;
(iii) if he has acted in a manner which is unbecoming of a Government servant;
(iv) if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers;
(v) if he had acted in order to unduly favour a party;
(vi) if he had been actuated by corrupt motive, however, small the bribe may be because Lord Coke said long ago though the bribe may be small yet the fault is great.
After making mention of the instances where an officer could be departmentally proceeded, it was observed that 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. While allowing the appeal against the order passed by the Tribunal, it was also observed that the applicant may put forth all defence open to him in the departmental inquiry which would be considered on its merit.
27. In Zunjarrao Bhikaji Nagarkar v Union of India & Others [(1999) 7 SCC 409] the Honble Supreme Court had an occasion to deal with the same issue. The facts of the case aforesaid reveal that the appellant, after having lost his cause before the Central Administrative Tribunal, Bombay Bench as also the High Court in the matter of quashing of charge framed against him, approached the Honble Supreme Court for relief. He was posted as Collector, Central Excise, Nagpur in the year 1995. He was served with a memorandum dated 2.9.1997 under rule 14 of the CCS (CCA) Rules, 1965 informing him that the President proposed to hold an enquiry 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 on 2.3.1995 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. After examining the evidence on record and hearing the assessee, the appellant vide his order aforesaid held as under:
In view of the foregoing, I hereby pass the following order :-
I confirm 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.
95,000 bags cleared clandestinely by Noticee-1 and seized on 16-1-1994 are liable for confiscation under Rule 173-Q of C. Ex. Rules, 1944. However, I find that the goods had been released provisionally on execution of bond for the full value of the goods and cash security of Rs. 1 Lakh. As the goods are not available for confiscation, I appropriate the amounts of Rs. 10,000/- in lieu of confiscation.
I order 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. I however, allow the goods to be redeemed on payment of Rs.10,000/- (Rs. Ten Thousand only). Against the order aforesaid, an appeal was filed which was pending at the time when the matter came to be decided by the Honble Supreme Court. It was inter alia urged on behalf of the appellant that adjudication of order passed by him was quasi judicial in nature whereby he ordered confiscation of goods and confirmed the excise duty. He did not choose to impose any penalty in the facts and circumstances of the case and merely on that ground he could not be subjected to disciplinary proceedings. It was also urged that the memorandum of charge read with imputation of misconduct only alleged that the appellant was in error by not having imposed a penalty, but there was no allegation of any corrupt motive or any familiarity with the party. It was urged that the allegation made in the chargesheet would not show any culpability on the part of the appellant nor there was any misconduct, and, therefore, the chargesheet was liable to be quashed. Misconduct is a sine qua non to the maintainability of any chargesheet, further urged the learned counsel. The Honble Supreme Court while determining the controversy in issue referred to its earlier decision in Union of India v K. K. Dhawan [(1993) 2 SCC 56], which in turn had taken into consideration its decisions in V. D. Trivedi v Union of India [(1993) 2 SCC 55], Union of India v R. K. Desai [(1993) 2 SCC 49], Union of India v A. N. Saxena [(1992) 3 SCC 124], and S. Govinda Menon v Union of India [AIR 1967 SC 1274], and quoted paras 28 and 29 therefrom, which read as follows:
28. Certainly, therefore, the officer, who exercises judicial or quasi judicial powers acts 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: The instances have since already been quoted hereinbefore. While referring and relying upon its earlier decisions, the Honble Supreme Court held, When we talk of negligence in a quasi-judicial adjudication, it is not negligence perceived as carelessness, inadvertence or omission but as culpable negligence. It further held, 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 with mala fides. It was also held, 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. The 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 a basis for initiating disciplinary proceedings against an officer while he is acting as a quasi-judicial authority, he is always subject to judicial supervision in appeal. If every error of law were to be 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 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 whereunder 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.
28. The learned counsel representing the respondents, per contra, would contend that the judgment of the Honble Supreme Court in Nagarkar (supra) relied upon by the applicant was not approved by the Honble Supreme Court in Union of India & Others v Duli Chand [(2006) 5 SCC 680]. The facts of case reveal that Duli Chand was punished by the disciplinary authority on the ground that he had negligently allowed claims for refund to an applicant on three different occasions. He was found by the department to be grossly negligent while discharging quasi judicial functions and imposed punishment of stoppage of two annual increments with cumulative effect. The action of the disciplinary authority was challenged before the Central Administrative Tribunal on the ground that no disciplinary proceedings would lie against an officer discharging judicial/quasi judicial functions unless there was an element of moral turpitude. The tribunal held it to be a case of gross negligence on the part of the respondent, but relying upon Nagarkar (supra) it was held that disciplinary proceedings would not lie against an officer discharging quasi judicial functions unless it was established that the officer concerned had obtained an undue advantage thereby or in connection therewith. The High Court confirmed the order passed by the Tribunal. This decision was challenged before the Honble Supreme Court on the ground that the Tribunal and the High Court had incorrectly proceeded on the law as it then stood on the issue. The Honble Supreme Court observed that the law on the subject was considered in extenso in the three-Judge Bench decision in Union of India v K. K. Dhawan (supra), wherein it was noted that the view that no disciplinary action could be initiated against an officer who exercises in respect of judicial or quasi judicial. It was further observed 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, which we have already mentioned above, in paragraph 28 reproduced by the Honble Supreme Court in K. K. Dhawan (supra). The Honble Court held that the matter would have to depend upon the facts of a particular case and the present case would fall squarely within the fourth instance listed above. In the last para of the judgment, the Honble Supreme Court observed that in their opinion Nagarkar (supra) was contrary to the view expressed in K. K. Dhawan (supra), and the decision in K. K. Dhawan being of a larger Bench would prevail and the decision in Nagarkar, therefore, would not correctly represent the law. Shri G. D. Gupta, Sr. Advocate, representing the applicant, in rebuttal states that the law laid down by the Honble Supreme Court that no departmental proceedings would lie against an officer discharging quasi judicial functions unless it was established that the officer concerned had obtained an undue advantage thereby or in connection therewith, was followed by the Honble Supreme Court in Cholan Roadways Ltd v G. Thirugnanasambandam [(2005) 3 SCC 241], Inspector Prem Chand v Government of NCT of Delhi & Others [Civil Appeal No.1815/2007 decided on 5.4.2007], and Ramesh Chander Singh v High Court of Allahabad & Another [(2007) 4 SCC 247]. In Cholan Roadways (supra) which is judgment of a Bench consisting of two Honble Judges, the Supreme Court relied upon its judgment in Nagarkars case as well for granting the desired relief. In Prem Chand (supra), which again is by a Bench consisting of two Honble Judges, while granting the relief, the Apex Court placed reliance upon its judgment in Nagarkars case as well. Negligence simpliciter has not been held to be misconduct. The only difference, it appears to us between the judgment of the Honble Court in the case of the applicant himself [K. K. Dhawan (supra)] and Duli Chand, and its judgments in Nagarkar followed in Cholan Roadways and Prem Chand, is that whereas, in one set of judgments, i.e., K. K. Dhawan and Duli Chand gross negligence can also be a misconduct for which departmental enquiry can be held even if the charged officer was discharging functions in his quasi judicial capacity, whereas in Nagarkar, Cholan Roadways and Prem Chand, it would be culpable negligence of an officer which can be tested in a departmental enquiry. The two decisions in Cholan Roadways and Prem Chand, as mentioned above, are by Benches consisting of two Honble Judges, whereas the one recorded by the Honble Supreme Court in Duli Chand (supra) is by a Bench consisting of three Honble Judges. In the two later decisions referred to above, the decision in Duli Chand has not been considered. In the circumstances, as mentioned above, the decision of larger Bench has to be followed. However, the Honble Supreme Court in its judgment in Ramesh Chander Singh (supra), which is by a coordinate Bench consisting of three Judges, while granting the relief, has placed reliance upon Nagarkars case as well. Brief facts of the case aforesaid reveal that Ramesh Chander Singh, a judicial officer, was hearing a bail matter in a murder case. The allegation in the FIR resulting into registration of the murder case was that accused Ram Pal and Raghunath used firearms and shot dead Pratap Yadubir Singh and Devendra Pipraiya within the compound of District Panchayat Bhawan, Jhansi. Accused Rajendra was granted bail on 19.8.1995. Raghunath who allegedly used the firearm and killed one of the victims, was also granted bail on 20.9.1995 by the High Court. Accused Ram Pal continued to be in custody and moved his first bail application on 17.11.1995 which was dismissed by the Sessions Judge, Jhansi. On 11.4.1996, Ram Pal moved another bail application which came to be dismissed for default. In his third application, which came up for consideration before the Second Addl. Sessions Judge, Jhansi, Ram Pal contended that he had no criminal history and that the Executive Magistrate who recorded the dying declaration, used to reside in the hose of deceased Pratap Yudhbir, and that because of his acquaintance with the deceased, the dying declaration recorded by him was not to be given much credence. It was further contended that he (Ram Pal) was a local resident and there was no likelihood of his absconding. This application came to be dismissed by the Sessions Judge on 15.5.1996. He moved yet another bail application wherein he urged that he was a student; he had surrendered before the CJM on 8.6.1995; he had been in custody for more than one year and that his co-accused had been released on bail. He also pleaded that his father was seriously ill. Vide order dated 22.6.1996 the appellant (Ramesh Chander Singh) granted bail to Ram Pal. The main reasons attributed for granting bail to accused Ram Pal were that the chargesheet had been filed by the police; the accused had stated that his father was seriously ill; the accused was a student; and that he had no previous conviction or involvement in any criminal case. Appellant also observed in the bail order that the Tehsildar who recorded the dying declaration was a close acquaintance of the deceased. He also noted that the brother of the de facto complainant had filed an application before the Sessions Judge for transfer of the bail application to some other court. However, later, the Addl. District Government Counsel stated that he had full faith in the court, and the counsel engaged by the complainant did not raise any objection and was prepared to argue the bail application. Ramesh Chander Singh, thus proceeded to hear the matter and granted bail, as mentioned above. Complainant Jagdeo Singh sent a complaint to the High Court alleging that the Ramesh Chander Singh had accepted illegal gratification for granting bail to accused Ram Pal. The inspecting Judge after going through the material on record, was of the view that there was a prima facie case against the officer concerned for dereliction of duty and judicial dishonesty while granting bail. The administrative committee initiated departmental enquiry against him. In the complaint filed by Jagdeo Singh it was also alleged that it was being said in the village that a sum of Rs.80000/- was paid to Ramesh Chander Singh and bail would be granted by him, and that nobody could stop it. He also mentioned about the transfer application filed by him before the District Judge and alleged that despite filing of the said transfer application, the bail application was heard and allowed. The charge that came to be framed against Ramesh Chander Singh did not make mention of receipt of the illegal gratification for granting bail. It, however, contained the allegation that the bail order was passed by him for extraneous consideration with oblique motives on insufficient grounds and that he was guilty of misconduct and failed to maintain absolute integrity and devotion to duty within the meaning of Rule 3 of the U.P Government Servants Conduct Rules, 1956. A sitting Judge of the High Court conducted the enquiry and gave his report. Though there was no charge specifically brought against Ramesh Chander Singh that he had received the illegal gratification, this aspect was also considered. The Judge who conducted the enquiry considered various aspects of the matter and concluded that there was no element of truth in the allegation that the delinquent received illegal gratification. However, the learned Judge came to the conclusion that the bail had been granted by Ramesh Chander Singh in utter disregard of judicial norms and on insufficient grounds and based on extraneous consideration with oblique motive, and the charges had been held to be proved. The Judge, however, did not state in his report as to what was the oblique motive or the extraneous consideration involved in the matter. Appellant was first visited with the penalty of withholding of two annual increments with cumulative effect, but the Bench dealing with his writ petition, while dismissing the same, asked him to show cause as to why he should not be imposed the punishment of removal from service. Ultimately, the delinquent was reduced to the rank next below, i.e., Civil Judge (Senior Division). These were the orders which were challenged before the Honble Supreme Court. The question that came up for consideration before the Honble Supreme Court was as to whether the appellant had granted bail on insufficient grounds or was justified in passing such an order. While examining the merits of the case, it was held that the order passed by the appellant could not be said to be a totally unwarranted having superfluous reasoning. It was observed that if the High Court were to initiate disciplinary proceedings based on a judicial order, there should have been strong grounds to suspect the officers bona fides and the order itself should have been actuated by malice, bias or illegality. The Honble Court then referred to decisions wherein it had disapproved the practice of initiating disciplinary proceedings against officers merely because the judgments passed by them are wrong. It was observed that the appellate and revisional courts have been established and given powers to set aside such orders. While referring to its judgments in Ishwar Chand Jain v High Court of P&H [(1988) 3 SCC 370], K. P. Tiwari v State of M.P. [1994 Supp. (1) SCC 540], and Kailash Nath Roy v State of Bihar [(1996) 4 SCC 539], it was held that higher courts have been established to correct errors. In cases where intolerable error is pointed out, it is functionally required to correct the error in an appropriate case and in a manner befitting maintaining dignity of the court and independence of judiciary. The higher court should convey its message in the judgment to the officer concerned through a process of reasoning, essentially persuasive, reasonable, mellowed but clear and result oriented and rarely a rebuke. While referring to the law laid down in Nagarkars case (supra), it was held, 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 Article 235 of the Constitution may exercise its supervisory jurisdiction. The reading of the judgment and the observations made therein would indeed reflect that when it is a case of negligence, it ought to have some overtones or undertones of culpability.
29. In the scenario of judicial precedents, as mentioned above, whereas the counsel representing the applicant would insist that it is the law laid down by the Honble Supreme Court in Nagarkars case (supra) which shall hold the field, which has been followed in Ramesh Chander Singh (supra), particularly, when the said judgment (Ramesh Chander Singh) is by a coordinate Bench and later in point of time than that of Duli Chand (supra), and that this Tribunal may hold that it is only culpable negligence which can be subject matter of departmental enquiry when it may relate to allegations that may pertain to functions of an officer discharged by him in his judicial or quasi judicial capacity, the counsel representing the respondents would, however, insist that the judgment of the Honble supreme court in Duli Chand (supra) would hold the field, particularly when in Ramesh Chander Singh the decision in Duli Chand has not been considered. We would have determined this controversy as it would not be difficult to do so, on the basis of judicial precedents covering the issue. We, however, feel no necessity to do so in the present case and leave it to be determined in some appropriate case, as on facts we find that the present case may not be one where the applicant can be saddled with the misconduct that may be grossly negligent. We may, however, mention that even though, there is a hierarchy of tribunals established under the Income Tax Act, the respondents would not carry any appeal or revision against the orders passed by the applicant in some matters out of those mentioned in the chargesheet, where he might have passed orders against the revenue. Insofar as, the orders that went in favour of revenue are concerned, we have already mentioned the course adopted by the assessee in challenging the same and the result thereof.
30. On facts, we are of the considered view that the department has miserably failed in its endeavour to show that the applicant while passing orders subject matter of article of charge-II and part (a) of article of charge-V had indulged in gross negligence. We have recorded the reasons to that effect hereinbefore. We may only state that the enquiry officer returned a firm finding with regard to both charges mentioned above that the applicant had not indulged in any misconduct, whereas the disciplinary authority fell into a serious and egregious error in reversing the findings of the enquiry officer. May be, if perhaps, the reply/representation of the applicant to the dissenting note of the disciplinary authority was properly gone into, the result would have been different. As mentioned above, even though, the disciplinary authority received the representation of the applicant against the dissenting note dated 5.3.2007, but it chose not to make even a reference of the same. We have already mentioned that at one stage we were thinking of remitting the matter to the disciplinary authority to consider the representation of the applicant against the dissenting note and pass speaking order, but in the facts and circumstances of this case, it does not appear appropriate or desirable. The reasons for that are manifold. The applicant, it may be recalled, was issued charge memo in the year 2003 with regard to orders passed by him in his quasi judicial capacity way back in 1995-86 and 1997-98. The applicant is an officer of 1977 batch. He was at the relevant time Deputy Commissioner of Income Tax. Thereafter, he was promoted to the rank of Joint Commissioner and further to that of Additional Commissioner and then Commissioner of Income Tax. The applicant has thus been subjected to departmental enquiry after he had got as many as three promotions. Even though, in the peculiar facts and circumstances of this case, and in particular, that the applicant may not be legally permitted at this stage to challenge the proceedings on the ground of unexplained delay, we have rejected his contention, but the fact remains that the applicant has been subjected to departmental enquiry with regard to absolutely stale matters. Further, the respondents took as many as five years in completing the enquiry, and in the process sought number of extensions from the High Court, thus wasting valuable time, during which the applicant suffered cross-country transfers, naturally to his total disadvantage and inconvenience. Further, the applicant, it appears, is not likely to get any justice from the departmental authorities. The dissenting note and the final order, as mentioned above, are verbatim the same, but for the difference that in the final order, events subsequent to the dissenting note have been mentioned. The disciplinary authority, it appears, had pre-judged the issue, as would be further fortified from the fact that the dissenting note appears to be a final order holding the charges to be proved. As mentioned above, the dissenting note is not a tentative one. Further, even though while explaining in the written statement the observations made in the impugned order that nothing new was stated by the applicant, it has been mentioned that the applicant had projected his defence on receipt of the charge memo and during the course of enquiry. However, we are surprised to note that even the said stand of the applicant was not considered by the disciplinary authority in the impugned order. The disciplinary authority did not choose to refer to what the applicant had already mentioned by way of his defence. As for the quantum of punishment, making only some lapses in the assessment order carried out by the applicant in his quasi judicial capacity perhaps would not have warranted such ghastly punishment as compulsory retirement, even if it may have been a case of gross negligence. It is pertinent to mention that there was no finding returned even by the disciplinary authority that the applicant had favoured the assessee for any extraneous considerations. Even a finding with regard to simply favouring the assessee is not recorded. Over and above the reasons given above, what we find is that no useful purpose at all would be served in remitting the matter to the disciplinary authority, as a clear and categorical finding can be returned on the basis of available records.
31. For the reasons mentioned above, we allow this Application. Consequently, the charge-memo dated 28.4.2003, the dissenting note recorded by the disciplinary authority dated 5.3.2007, and the final order dated 1.4.2008 inflicting upon the applicant punishment of compulsory retirement, are quashed and set aside. The applicant shall be reinstated in service forthwith with all consequential benefits. We are of the considered view that the applicant is entitled to costs for being put into a long agonizing departmental enquiry pertaining to the matters when he was Deputy Commissioner of Income Tax and that too for the assessment orders made by him in his quasi judicial capacity. We quantify the costs at Rupees ten thousand.
( L. K. Joshi ) ( V. K. Bali ) Vice-Chairman (A) Chairman /as/