Central Administrative Tribunal - Bangalore
Smt. Swati S. Patil vs Union Of India (Uoi) And Ors. on 18 December, 2002
Equivalent citations: 2004(1)SLJ381(CAT)
ORDER Mukesh Kumar Gupta, Member (J)
1. Applicant, presently working as Additional Commissioner of Income Tax and who had initially joined Indian Revenue Service on 21st July, 1974, has filed the present application under Section 19 of the Administrative Tribunals Act, 1985 and has prayed for the following reliefs:
"(i) quash the Memorandum No. F. No. C.14011/25/95-V & L dated 20.12.1995 (Annexure-A1) issued by the 1st respondent, Union of India.
and
(ii) quash the Report No. 117/SK/45 (38) dated 22.3.1999 (Annexure-A5) prepared by the 3rd respondent, Inquiry Officer.
and
(iii) direct the 1st and the 2nd respondents to open the sealed cover and give effect to the decision of the DPC held in the year 1997 to the post of Commissioner of Income Tax in so far as the applicant is concerned by granting all the consequential benefits from the date of the applicant's juniors have been promoted to the post of Commissioner of Income Tax, with arrears of pay, seniority, etc., in the interest of justice.
and
(iv) grant such other reliefs as this Hon'ble Tribunal deems fit in the facts and circumstances of the case, including award of costs to the applicant, in the interest of justice."
2. Admitted facts of the case are that a memorandum dated 20th December, 1996 under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965 was issued against the applicant which contained two articles of charge. It would be essential to extract the said articles of charge for proper appreciation of the facts and issues raised in the present case, which reads as under:
Article I That Smt. Swati S. Patil while functioning as Inspecting Assistant Commissioner of Income-Tax/Deputy Commissioner of Income Tax, Belgaum Range, Belgaum passed a large number of orders under Rule 117A and Rule 40(5) of the Income Tax Rules waiving the interest levied under Sections 139(8) and 215/217 of the Income Tax Act. The said orders were highly perverse, beyond her competence and passed with a view to confer undue benefits to the concerned assessees and caused loss of revenue to the Government. By acting in this fashion, Smt. Swati S. Patil IAC/DCIT, Belgaum failed to maintain absolute integrity and devotion to duty and also displayed conduct unbecoming of a Government servant, thus violating the provisions of Rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of CCS (Conduct) Rules, 1964.
Article II That Smt. Swati S. Patil while functioning as IAC/DCIT, Belgaum Range, Belgaum issued instructions in the following cases under Section 144A of the Income Tax Act in an unauthorised, perverse and mala fide manner with a view to granting undue favour to the assessee:
1. M/s. Amarsons Creations--A.Y. 1988-89.
2. M/s R.H. Bagwa and Co.--A.Y. 1988-89.
3. Shri R.P. Badas--A.Ys. 1984-85 to 1989-90.
4. M/s Sanjay Oil and Ginning Factory--A.Y. 1988.
5. Shri G.Y. Dange--A.Y. 1989-90.
Smt. Swati S. Patil, thus failed to maintain absolute integrity and devotion to duty and also displayed conduct unbecoming of a Government servant. She has, thereby violated the provisions of Rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS (Conduct) Rules, 1964."
3. The applicant denied the said allegations vide reply dated 11.6.1996 (Annexure-A2). Thereafter an oral inquiry was held and the Inquiry Officer submitted his report dated 22nd March, 1999 holding both the aforesaid charges proved (Annexure-A5). Vide communication dated 31st July, 1999 (Annexure-A6), respondent No. 1 supplied the said inquiry report to the applicant and asked her to submit representation, if any, against the same, Pursuant to the said communication, the applicant submitted her detailed representation dated 25th November, 1999 (Annexure-A7) and disputed the findings so recorded by the Inquiry Officer. In the said representation dated 25th November, 1999, the applicant specifically pointed out that Rules 117A and 40(5) conferred an authority on the applicant as Inspecting Assistant Commissioner of Income Tax/Deputy Commissioner of Income Tax to waive the Interest. The law laid down by the Hon'ble Supreme Court in Z.B. Nagarkar v. Union of India, (1999) 7 SCC 409, was also brought to the notice of the authorities. Till date no final order has been passed by the authorities despite the fact that vide order dated 19th July, 2001 (Annexure-A11) the applicant's O.A. No. 955 of 2001 filed before this Bench of the Tribunal was disposed of with a direction to the respondents to consider the applicant's representation against the said inquiry report. The applicant was also granted an opportunity to file an additional representation if any. R.A. No. 9/2001 filed against the aforesaid order dated 19th July, 2001 was also rejected vide order dated 27.7.2001 (Annexure-A12). Though 90 days time was granted vide aforesaid order dated 19th July, 2001 to consider and dispose of the applicant's representation against the inquiry report, no steps have been taken by the respondents to conclude the departmental inquiry pending against the applicant, which was initiated on 20th December, 1995. As such, it could be seen that despite passage of almost 7 years from the date of its initiation and about 4 years of submission of the inquiry report, the sword of democles still remain hanging on the applicant's head. While disposing of the Review Application No. 9/2001, this Tribunal observed that the respondents shall consider and dispose of the applicant's representation/additional representation as per law laid down by the Hon'ble Supreme Court including the law laid down in Nagarkar's case. It is on record that the applicant has made details representations dated 20th July, 2001 as well as 30th July, 2001. (Annexures A13 and A14 respectively) pursuant to the order dated 19th July, 2001.
4. Applicant has filed the present application seeking two fold reliefs. First, to quash the charge memo dated 20th December, 1995 as well as the inquiry report dated 22nd March, 1995 and the 2nd prayer is to open the sealed cover and give effect to the decision of the Departmental Promotion Committee held in year 1997 and to give her promotion to the post of Commissioner of Income Tax with all its consequential benefits. It is admitted case of the parties that the applicant's juniors were initially promoted on ad hoc basis and later on regularised vide order dated 9.9.1998. As far as the applicant is concerned, since disciplinary proceedings were initiated against her vide memorandum dated 20th December, 1995, a sealed cover procedure was adopted and the applicant has not been promoted to the said post even on ad hoc basis till date.
5. Before us the applicant has contended--
(1) That the charge memo dated 20th December, 1995 is not tenable in law particularly when the applicant had exercised quasi judicial power in waiving the interest in the capacity of Inspecting Assistant Commissioner of Income Tax/Deputy Commissioner of Income Tax, Belgaum Range, Belgaum, particularly in view of the law so declared in Z.B. Nagarkar v. Union of India [(1999) 7 SCC 409].
(2) That the applicant has not committed any misconduct and there is no allegation either of culpable negligence or any gain received by the applicant in passing the orders in the aforesaid quasi judicial capacity.
(3) That the respondents have failed to conclude the departmental proceedings initiated by them despite the directions issued by this Tribunal by order dated 19th July, 2001. Despite the time limit of 90 days fixed in the aforesaid order, neither the respondents sought extension of the said direction nor they concluded the proceedings and as such there is a deemed abandonment of the said departmental proceedings.
6. The applicant also contended that on the one hand the applicant who has discharged the quasi judicial functions in the capacity of Inspecting Assistant Commissioner of Income-Tax/Deputy Commissioner of Income Tax has been charge sheeted without any just and tenable reason and on the other hand, she has been denied the promotion to the next higher post of Commissioner of Income Tax despite the fact that her juniors were so promoted to the said post initially on ad hoc basis in the year 1997 and regularised in the said post in the year 1998.
7. The respondents have filed their reply and basically raised three contentions. Firstly, the applicant cannot be promoted to the next higher grade of Commissioner of Income Tax during the pendency of the disciplinary proceedings, which are still in progress and a final decision on exonerating the applicant or imposing penalty is yet to be taken. The second contention raised by the respondents is that the orders passed by the applicant in the capacity of Inspecting Assistant Commissioner of Income Tax/Deputy Commissioner of Income Tax cannot be treated as quasi judicial orders and the orders passed by the applicant under Rules 40(5) and 117A for waiver of interest were outside the jurisdiction and competence of the applicant. Similarly, the directions issued under Section 144A were also not issued in a proper and judicious manner. On the question of supply of certain documents, the respondents have stated that no reference to firms order was made in the order waiving interest in the case of individual partners. Hence, non-production of the said documents have no bearing on the inquiry or the conclusion drawn by the Inquiry Officer. In a specific reply to Para 5(i), the respondents have admitted that: "the applicant has not been charged with deriving pecuniary benefits." However, they have justified the initiation of the said disciplinary proceedings on the ground that the orders passed under Rules 40(5) and 117A were without jurisdiction and the directions issued under Section 144A were not passed "in a proper and judicious manner."
8. In view of these facts the following question arises for our consideration and determination:
(a) Whether the applicant has exercised the quasi judicial powers in passing the orders under Rules 40(5) and 117A of the Income Tax Rules read with Sections 139(8) and 215/217 of the Income Tax Act?
(b) Whether the departmental proceedings initiated vide charge sheet dated 20th December, 1995 are just, legal and tenable in view of the law laid down by the Hon'ble Supreme Court in Z.B. Nagarkar's case?
(c) Whether the delay in initiating the disciplinary proceedings as well as in concluding the said disciplinary proceedings has caused any prejudice to the applicant?
(d) Whether the procedure adopted by the Inquiry Officer in Conducting the said proceedings against the applicant is just, fair and in accordance with the principles of natural justice and Rules, Regulations and the law on the said subject?
(e) Whether the respondents are justified in not promoting the applicant to the post of Commissioner of Income Tax even on ad hoc basis when the DPC for considering the officials for promotion to the said post was held on 13th and 15th April, 1998 and there had been a delay in concluding the said proceedings against the applicant?
9. We shall examine these issues in seriatim as noted hereinbelow:
10. The learned Counsel for the applicant has drawn our attention to the meaning of the word 'quasi judicial' and in this regard he has made reference to Law Lexicon by P. Ramanatha Aiyer -- Reprint Edition 1987 at page 1062 where the said term 'quasi judicial' has been defined as "When the law commits to an officer the duty of looking into certain facts not in a way which it specifically directs, but after a discretion in its nature judicial, the function is quasi judicial." The learned Counsel has also referred to the provisions of Section 263 of Income Tax Act to show that any order passed, which is pre-judicial to revenue can be taken in revision under Section 263 of the Income Tax Act. The relevant provision of the said section reads as under:
263. Revision of Orders Prejudicial to Revenue:
(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including the order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment."
11. Similarly our attention has been drawn to Rules 117A and Rule 40 of Income Tax Rules. As per Rule 117A of the Income Tax Rules, the interest charged under Section 139(8) of the Act can be waived only under prescribed circumstances by the Assessing Officer. The circumstances mentioned in this rule are as under:
"(i) Where the return of income is furnished by a person who has been treated under Section 163 as an agent of a non-resident and is assessed in respect of the latter's income;
(ii) Where the return of income is furnished by an assessee whose only source of income during the relevant previous year is a share in the income of an unregistered firm which has been assessed on its total income in respect of that year under Clause (b) of Section 183;
(iii) Where the return of income of a deceased individual is furnished by his legal representative and the legal representative satisfies the Assessing Officer that he had sufficient cause for not furnishing such return within time;
(iv) Where the return of income has been furnished in pursuance of a notice issued under Section 148;
(v) Any case in which the assessee produces evidence to the satisfaction of the Assessing Officer that he was prevented by sufficient cause from furnishing the return within time.
Provided that the previous approval of the Deputy Commissioner has been obtained where the amount of interest reduced or waived, as the case may be, under Clause (iv) or Clause (v) exceeds one thousand rupees."
(Emphasis supplied) Similarly Rule 40 of the Income Tax Rules laid down under:
"40. The Assessing Officer may reduce of waive the interest payable under Section 215 or Section 217 in the cases and under the circumstances mentioned below, namely :
1. When the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee.
2. Where a person is under Section 163 treated as an agent of another person and is assessed upon the latter's income.
3. Where the assessee has income from an unregistered firm assessed under the provisions of Clause (b) of Section 183.
4. Where the previous year is the financial year or any year ending about the close of the financial year and large profits are made after the 1st March (or the 15th March in cases where the proviso to Section 211 applied), in circumstances which could not be foreseen.
5. Any case in which the Deputy Commissioner considers that the circumstances are such that a reduction of waiver of the interest pay able under Section 215 or Section 217 is justified.
6. Nothing contained in this rule shall apply in respect of any assessment for the assessment year commencing on the first day of April, 1989 any subsequent assessment year." (Emphasis supplied) A perusal of the aforesaid rules would make it crystal clear that the Deputy Commissioner, earlier known as Inspecting Assistant Commissioner of Income Tax is empowered to reduce or waive the interest payable under Sections 215 and 217 in cases where such action is so justified. The orders passed by the applicant under the aforesaid rules as such could not be stated to be without any jurisdiction, as alleged. In the charge memo dated 20th December, 1995. If this basic ingredient and contention raised by the respondent is so decided that the applicant had passed the orders under the aforesaid rules. The allegations made in the said articles of charge that the said orders were highly perverse, beyond her competence would not hold the field. A perusal of the statement of imputation of misconduct or misbehaviour wherein a list of cases where such alleged perverse and irregular orders are passed by the applicant is seen, it could be noted that none of the orders were related to the assessment year commencing on 1st April, 1989 or any subsequent assessment years. That is the only bar provided under Rule 40(6) of the Income Tax Rules. At this stage it would be relevant to note a list of cases where such alleged perverse and irregular orders were passed by the applicant. The relevant extract from the statement of imputation of misconduct reads as under:
"A list of some of the cases where such perverse and irregular orders were passed by the DCIT is as under :
1. Swing Wines--A.Y. 1976 to 1984-85.
2. M/s Ravi Anmiah and Co.--A.Y. 1979-80, 1980-81.
3. M/s. Hind Castings Pvt. Ltd.--A.Y. 1980-81 to 1984-85.
4. M/s. Hind Soap Works Pvt. Ltd.--A.Y. 1977-78 to 1984-85.
5. Shri S.N. Angolar--A.Y. 1983-84.
6. Dr. Ravindranath--A.Y. 1979-80. 1982-83 to 1985-86.
7. M/s. Ashok & Co.--A.Y. 1974-75 to 1982-83.
8. M/s. Construction Syndicate--A.Y. 78-79. 81-82 to 87-88.
9. Shri Ravi Anmiah Raichur--A.Y. 1980-81 to 85-86.
10. M/s Devnand Saree Centre. Gulbarga--A.Y. 1973-74, 1977-78 to 1988-89.
11. M/s Ravi and Co., Raichur--A.Y. 1979-80 to 1980-81.
12. M/s Ballappa Mechanical Works--A.Y. 1975-76 to 1985-86.
13. M/s Sri P. Sambasiva Rao, Raichur--1980-81, 83-84 to 1985-86.
14. M/s Vijay Tyres, Bijapur--A.Y. 1971-72, 76-77 and 81-82 to 84-85.
15. M/s Gopal Industries, Bijapur--77-78. 1982-83 to 1985 to 1986.
16. M/s Venkatesh Industries, Bijapur--A.Y. 1975-76 to 1982-83.
Though the said statement of imputation says that the above list is only illustrative and not exhaustive, nothing has been brought on record to point out that in about 430 cases where the applicant had passed orders either waiving or reducing the interest charged under Section 139(8) and Sections 215 and 217 of the Income Tax Act were related to any assessment year beginning from April, 1989 onwards. Similarly Clause 5 of Rule 117A of the Income Tax Rules empowers the Assessing Officer to reduce or waive the interest charged under the aforesaid sections of the Income Tax Act. As per the proviso appended to Rule 117A wherever the amount of interest which is reduced or waived, as the case may be, under Clause 4 or Clause 5 exceeds Rs. 1,000/- the previous approval of the Deputy Commissioner has to be obtained and is a condition precedent. Therefore, the allegations made by the respondents that the orders so passed by the applicant under the aforesaid provisions of the Income Tax Act and Rules were perverse and beyond her competent is not made out. It could safely be concluded that the allegations so made against the applicant are contrary to the provisions of the Income Tax Act and the Rules and the applicant is justified in passing the orders being empowered under the Act to pass such an order.
12. In support of his contentions, the learned Counsel for the applicant has invited our attention to large number of rulings on the Income Tax subject, which are noted herein below:
(1) (2000) 246 ITR 251 Madras High Court. (2) (1986) 160 ITR 670 Patna High Court. (3) (1986) 160 ITR 663 Patna High Court. (4) (1999) 139 ITR 89 Karnataka High Court. (5) (1995) 211 ITR 121 Gujarat High Court.
We are not extracting relevant portions from the aforesaid judgments for the simple reason that all the aforesaid cases relate to waiver or reduction of interest under Section 139(8) read with Sections 215 and 217 of the Income Tax Act. Suffice would be to say that the ratio laid down in the aforementioned cases is that Inspecting Assistant Commissioner of Income Tax/Deputy Commissioner of Income Tax is empowered under the said provisions to reduce or waive interest.
13. Learned Counsel for the applicant has also drawn our attention to Annexure-A16 communication from the Commissioner of Income Tax, Karnataka-II to the Inspecting Assistant Commissioner of Income Tax, Belgaum Range, Belgaum, dated 11th September, 1986 wherein it has been stated that since the assessees can avail the concession given in Section 273A only once in their lifetime. It is better that they are considered by the CIT only as a last resort if they cannot get the waiver of penalty/ interest from the ITO/IAC. Accordingly, it was instructed to inform the ITO to consider whether they can drop the penalty proceedings on merits and also waive the interest, which were within their jurisdiction. Simultaneously, the Inspecting Assistant Commissioner of Income Tax was also directed to consider waiver of interest on merits, which fell within the purview of the Inspecting Assistant Commissioner of Income-Tax. Vide communication dated 6.11.1986 (Annexure-A17) all the ITOs of Karnataka-1 Range, with reference to the aforesaid communication dated 11.9.1986, were also directed that the Commissioner desires that wherever interest under Section 139(8)/ 215/217 has been levied, the ITOs should consider waiver of such interest by taking "fresh applications" from the assessees for waiver under Rules 40 and 117A, if no such application had been filed earlier. The learned Counsel for the applicant has also drawn our attention to the deposition made by Sri N.K. Jain, Additional Commissioner of Income Tax before the Inquiry Officer wherein the said witness has categorically stated that the applicant as Inspecting Assistant Commissioner of Income Tax "was competent and could validly discharge functions regarding waiver of interest". There is yet another communication issued by the office of the Chief Commissioner (Administration) and Commissioner of Income Tax, Karnataka-1. Bangalore dated 27.2.1986, which in turn circulated the Board's Instruction No. 1695 vide file No. 400/1/86-IT (B). Government of India. Ministry of Finance, Department of Revenue, CBDT, dated 13th February, 1996 wherein it was reiterated that the provisions of Rule 40 of the Income Tax Rules should be "invoked liberally." The cumulative effect of all such communications as well as the deposition made by the Additional Commissioner of Income Tax Sri N.K. Jain is that the applicant was not only had the jurisdiction to waive or reduce the interest under the aforementioned provisions, but the applicant as well as similarly placed officials were directed by the Central Board of Direct Taxes to invoke the said provisions liberally.
Similarly we find for Article II, the respondents have stated that the said directions issued under Section 114A were not "in a proper and judicious manner" (emphasis supplied). It is not disputed that under the said provisions of Section 144A of the Income Tax Act, the applicant had jurisdiction to issue directions to the Income Tax Officer. There is no allegation of either any motives, dishonesty, or acting deliberately in defiance of law. We are of the considered opinion whether a particular direction issued by IAC to ITO is proper or judicious or not, in the absence of any culpable negligence, could not constitute a misconduct, particularly when the exercise of said power is of a quash judicial in nature.
14. Once we come to the conclusion that the applicant had exercised her power in reducing or waiving the interest, which was more than Rs. 1,000/- each in every case and the orders so passed related prior to the assessment year 1989 onwards, the next issue which arises for our consideration is whether there is any allegation made against the applicant which warranted initiation of departmental action against her. As noted hereinabove, the respondents in their reply have categorically stated "that the applicant has not been charged with deriving pecuniary benefits" (emphasised supplied). The only allegation made against the applicant under charge No. 1 is that the orders passed by the applicant has conferred "undue benefits to the concerned assessees and caused loss of revenue to the Government." The learned Counsel for the applicant has vehemently argued that on such basis the applicant cannot be proceeded with departmental action. For this purpose, the learned Counsel has strongly relied upon the judgment of the Hon'ble Supreme Court in Z.B. Nagarkar v. Union of India, (supra), wherein the Hon'ble Supreme Court almost on identical facts and circumstances held that whenever penalty is not levied by the Assessing Officer, the assessee certainly benefits. But, it cannot be said that by not levying the penalty or waiving the interest 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 prima facie. It would be relevant at this stage to extract the relevant observation of the Hon'ble Supreme Court from the aforesaid judgment particularly Para 41, which reads as under:
"41. When penalty is not levied, the assessee certainly benefits. But, it cannot be said that by not levying the penalty the officer has favoured the assessee or shown undue favour to him. There has to be some basis for the Disciplinary Authority to reach such a conclusion even prima facie. 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. It must be kept in mind that being a quasi judicial authority, he is always subject to judicial supervision in appeal." (Emphasis supplied) As we have considered and noted that under Section 263 orders passed by the Assessing Officer can be taken in revision by the Commissioner of Income Tax, even suo motu, it could not be said that there is no remedy available to the revenue authorities against the illegal orders passed by the Assessing Officer. It has been contended by the learned Counsel for the applicant that none of the orders passed by the applicant under the aforesaid provisions of Income Tax Act and Rules were taken up by the department in revision under Section 263 of the Income Tax Act. The respondents have not denied the said contention. We have considered this matter in detail and found from the records that there is no document or material on record from which it could be reduced that the applicant showed "favour" to the assessee by waiving or reducing the interest. There is no allegation of "culpable negligence." The Hon'ble Supreme Court in Para 40 of the said judgment has held as under:
"40. When we talk of negligence in a quasi-judicial adjudication, it is not negligence perceived as carelessness, in advertence or omission but as culpable negligence. This is how this Court in State of Punjab v. Ex-Constable Ram Singh (1992) 4 SCC 54:1992 SCC (L&S) 793; (1992) 21 ATC 435, interpreted "misconduct" not coming within the purview of mere error in judgment, carelessness or negligence in performance of duty. In the case of K.K. Dhawan, (1993) 2 SCC 56: 1993 SCC (L&S) 325: (1993) 24 ATC 1, the allegation was of conferring undue favour upon the assessees. It was not a case of negligence as such. In Upendra Singh case, (1994) 3 SCC 357: 1994 SCC (L&S) 868: (1994) 27 ATC 200, the charge was that he gave illegal and improper directions to the Assessing Officer in order to unduly favour the assessee. The case of K.S. Swaminathan ((1996) 11 SCC 498) was not where the respondent was acting in any quasi-judicial capacity. This Court said that at the stage of framing of the charge the statement of facts and the charge sheet supplied are required to be looked into by the Court to see whether they support the charge of the alleged misconduct. In M.S. Bindra case ((1998) 7 SCC 310: 1998 SCC (L&S) 1812, where the appellant was compulsorily retired this Court said that judicial scrutiny of an order imposing premature compulsory retirement is permissible if the order is arbitrary or mala fide or based on no evidence. Again in the case of Madan Mohan Choudhary, (1999) 3 SCC 396: (1999) SCC (L and S) 700, which was also a case of compulsory retirement this Court said that there should exist material on record to reasonably form an opinion that compulsory retirement of the officer was in public interest. In K.N. Ramamurthy case, (1997) 7 SCC 101 : 1997 SCC (L&S) 1749, it was certainly a case of culpable negligence. One of the charges was that the officer had failed to safeguard Government revenue. In Hindustan Steel Limited case, (1969) 2 SCC 6327: AIR 1970 SC 253, it was said that where proceedings are quasi judicial penalty will not ordinarily be imposed unless the party charged had acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. This Court has said that the penalty will not also be imposed merely because it is lawful so to do. In the present case, it is not that the appellant did not impose penalty because of any negligence on his part but he said it was not a case of imposition of penalty. We are, however, of the view that in a case like this which was being adjudicated upon by the appellant imposition of penalty was imperative. But then, there is nothing wrong or improper on the part of the appellant to form an opinion that imposition of penaltywas not mandatory. We have noticed that the Patna High Court while interpreting Section 325 IPC held that imposition of penalty was not mandatory which again we have said is not a correct view to take. A wrong interpretation of law cannot be a ground for misconduct. Of course it is a different matter altogether if it is deliberate and actuated by malafides."
(Emphasis supplied)
15. If we examine the allegations contained in the charge memo dated 20th December, 1995, it could be seen that the allegations made therein are totally unfounded and contradictory to the provisions of the Income Tax Rules and the law. The allegations of lack of competence of the applicant, it appears, had been made for ulterior motives and the same are based on no material. There is neither allegation of dishonesty or contumacious conduct levelled in charge memo dated 20th December, 1995.
16. Judgment of Z.B. Nagarkar's case, relied upon by the learned Counsel for the applicant, in turn had considered and analysed various judgments of the Hon'ble Supreme Court including Union of India v. K.K. Dhawan, (1993) 2 SCC 56=1993(1) SLJ 102 (SC). Union of India v. A.N. Saxena, (1992) 3 SCC 124, S. Govinda Menon v. Union of India, AIR 1967 SC 1274. V.D. Trivedi v. Union of India, (1993) 2 SCC 55, Union of India v. Upendra Singh, (1994) 3 SCC 357=1994(2) SLJ 77 (SC), M.S. Bindra v. Union of India, (1998) 7 SCC 310=1999(2) SLJ 96 (SC), Hindustan Steel Limited v. State of Orissa, (1969) 2 SCC 627, State of Punjab v. Ex-Constable Ram Singh, (1992) 4 SCC 54, and various other judgments and held that to maintain any charge sheet against a quasi judicial authority something more has to be alleged than a mere mistake of law that is in the nature of some "extraneous consideration" influencing the quasi judicial order. In the present case nothing of the sort is alleged in the impugned charge sheet which renders the charge sheet illegal. The Hon'ble Court stressed that in order to maintain the confidence and independent functioning of a quasi judicial authority and saving the disrepute of the quasi judicial authorities, they should be allowed to work and discharge their functions without fear or favour because constant threat of disciplinary proceedings against them would not be desirable. The Hon'ble Court also stated that if for every error of law, the quasi judicial officers are charged for misconduct, it would impinge upon the confidence and independent functioning of the quasi-judicial officers. It would be relevant at this stage to reproduce Para 43 of the said judgment of Nagarkar's case which reads as under:
"43. If very error of law were to constitute a charge of misconduct, it would impinge upon the independent functioning of quasi-judicial officers like the appellant. Since in sum and substance misconduct is sought to be inferred by the appellant having committed an error of law, the charge-sheet on the fact of it does not proceed on any legal premise rendering it liable to be quashed. In other words, to maintain, any charge-sheet against a quasi-judicial authority something more has to be alleged than a mere mistake of law, e.g. in the nature of some extraneous consideration influencing the quasi-judicial order. Since nothing of the sort is alleged herein the impugned charge sheet is rendered illegal. The charge sheet, if sustained will thus impinge upon the confidence and independent functioning of a quasi judicial authority. The entire system of administrative adjudication 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," (Emphasis supplied)
17. Considering the whole aspect of the matter particularly in view of the provisions of Income Tax Act and Rules as well as the instructions issued by the CBDT. Commissioner of Income Tax, Karnataka and the law so laid down under the Income Tax Act and Rules, besides the decisions of the Hon'ble Supreme Court noted herein above, we are of the considered view that it was not a case for initiation and continuation of any disciplinary proceedings against the applicant and the charge of misconduct levelled against the applicant was not proper.
18. Learned Counsel for the applicant has also drawn our attention to the decision in A. Sukumaran v. Sub-Divisional Officer and Ors., (1996) 32 ATC 1, wherein a coordinating Bench of this Tribunal at Ernakulam has taken a view that it is well settled that even in regions of domestic enquiry, far-flung suspicions cannot take the place of evidence or preponderance of evidence. Equally well settled is that, moral indignation cannot take the place of legal determination. In that case, a Technician in the Telecom Department was charged with tampering 19 switches in Max II Exchange, Kundara and damaging wipers. It was also alleged that there was a tools down strike on the date of incident and that as part of it the applicant dislocated switches and distorted wipers to bring about collapse of the system in that context, the Tribunal stated that to establish the charges, the department should have proved (a) what was the duties and responsibilities of the applicant, (b) whether he was exclusively incharge of the machinery that broke down and (c) whether there was preponderance of proof to suggest that what happened, happened on account of the applicant. After examining the entire records, the Tribunal found that the above mentioned elements had not been proved. Therefore, the Bench quashed and set aside the findings of the Inquiry Officer and consequently the penalty imposed was also quashed. Similarly, the Counsel for the applicant also drew our attention to Sudhir Chandra v. Union of India and Ors., (1990) 14 ATC 337, as well as N.K. Jain v. Union of India and Another, (1995) 31 ATC 406. The learned Counsel for the applicant also drew our attention to the judgment of the Hon'ble Supreme Court in P.C. Joshi v. State of U.P. and Ors., (2000) 6 SCC 491, wherein a judicial officer was proceeded for major penalty. In view of the Hon'ble Supreme Court judgments rendered in Z.B. Nagarkar's case as well as P.C. Joshi's case, we need not to discuss in detail the judgments rendered by the Benches of this Tribunal. In P.C. Joshi's case the appellant was a judicial officer who was charged that he granted bail in certain cases only on second occasion. According to the Inquiry Officer, in two of those cases bail ought to have been granted in the very first occasion and not on the second occasion. Another allegation was about the order of stay of disconnection of telephone for non-payment of Rs. 410/- to the telephone department, which order he passed as incharge District Judge on the assumption that the District Judge being the ex-officio Chairman of the District Consumer Forum he could grant such an order. The question which fell for the consideration before the Hon'ble Supreme Court was as to whether the Judicial Officer had conducted in a manner as to reflect on his reputation or integrity or good faith or devotion to duty etc. The Hon'ble Supreme Court held that the Inquiry Officer had not found any material, except on two occasions the bail ought to have been granted on the very first occasion and not on the second occasion, it would reflect on his reputation, integrity or good faith or devotion to duty or that act had been actuated by any corrupt motive. At best, it was held, that the view taken by the appellant was not proper or correct. The Hon'ble Court held in regard to other charges that "it is a case of bonafide and erroneous exercise of judicial powers and that mater cannot be treated as misconduct at all." On these basis, the Hon'ble Court ultimately held that in the absence of any evidence, the Inquiry Officer could not have reached the conclusion in the manner he did, which findings were affirmed by the Disciplinary Authority. Ultimately, the Hon'ble Supreme Court set aside the findings of the Inquiry Officer as well as the Disciplinary Authority and the orders made by the High Court in the said proceedings.
The learned Counsel for the applicant also cited Union of India v. H.C. Goel, AIR 1964 SC 364, where the Constitution Bench of the Hon'ble Supreme Court has laid down the following principles:
"It may be that the technical rules which govern criminal trials in Courts may not necessarily apply to disciplinary proceedings, but nevertheless, the principle that in punishing the guilty scrupulous care must be taken to see that the innocent are not punished, applied as much to regular criminal trials as to disciplinary enquiries held under the statutory rules." (Emphasis supplied)
19. Keeping in view the tests laid down in the above mentioned cases, we have examined the facts of the present case. We are of the considered opinion that the dicta laid down in aforementioned judgments are squarely applicable in the facts of the present case. It could safely be concluded that the allegations made by the respondents against the applicant in the present case are based on no material and further they are perverse in nature.
20. Coming to the next contention as to whether the applicant ought to have been granted ad hoc promotion or not. We may note the instructions laid down by DOPT vide O.M. dated 14th September, 1992. As per the said O.M. it is necessary to ensure that the disciplinary case/criminal prosecution instituted against any Government servant is not unduly prolonged and all efforts to finalise expeditiously the proceedings should be taken so that the need for keeping the case of a Government servant in a sealed cover is limited to the barest minimum. Accordingly, it was decided that the Appointing Authorities concerned should review comprehensively the cases of a Government servant whose suitability for promotion to a higher grade has been kept in a sealed cover on the expiry of 6 months from the date of convening the first DPC which had adjudged his or her suitability and kept its findings in the sealed cover. Such a review was also required to be done subsequently also after 6 months. Admittedly, in the present case the DPC was held on 13/15th April, 1998 and despite the passage of 4 1/2 years since then, such an exercise had not been carried out and the applicant has not been granted even the ad hoc promotion. Keeping in view the mandate of the aforesaid O.M. we are of the concerned view that the respondents have not followed the mandate of the said O.M. particularly in the circumstances where the Inquiry Officer submitted his report on 22nd March, 1999 and that disciplinary proceedings initiated vide Memo dated 20th December, 1995 are yet to be concluded despite the directions issued by this Tribunal vide order dated 19th July, 2001 to dispose of the applicant's representations made against the findings of the Inquiry Officer, within a period of 90 days. Despite the vacation of interim order on 11.9.2002 and further passage almost one and half year since the passing of direction dated 19.10.2001 the disciplinary proceedings remain inconclusive.
As such, keeping in view the mandate of the aforementioned O.M. the applicant ought to have been considered atleast for ad hoc promotion to the post of Commissioner of Income Tax and she should have been relieved of some agony on the said account. Unfortunately, this exercise had not been carried out without any justification.
21. Finally coming to the contention raised by the applicant about the delay in initiating as well as concluding the disciplinary proceedings, the learned Counsel for the applicant has invited our attention to a large number of orders, including State of A.P. v. N. Radhakishan, (1998) 4 SCC 154=1998(3) SLJ 162 (SC). In the said case of Radhakishan, the Hon'ble Supreme Court quoted the paragraphs from State of Punjab v. Chaman Lal Goyal, (1995) 2 SCC 570=1995(2) SLJ 126 (SC), which in turn relied upon the principles laid down by the Constitution Bench in A.R. Antulay's case, (1992) 1 SCC 225, and stated that though the said case of Antulay's pertained to criminal prosecution, the principles enunciated therein were broadly applicable to the plea of delay in taking disciplinary proceedings as well. For this purpose the Hon'ble Supreme Court in Para 18 held that:
"In Paragraph 86 of the judgment, this Court mentioned the propositions emerging from the several decisions considered therein and observed that ultimately the Court has to balance and weigh the several relevant factors--balancing test or balancing process--and determine in each case whether the right to speedy trial has been denied in a given case. It has also been held that, ordinarily speaking, where the Court comes to the conclusion that right to speedy trial of the accused has been infringed, the charges, or the conviction, as the case may be, will be quashed. At the same time, it has been observed that, that is not the only course open to the Court and that in a given case, the nature of the offence and other circumstances may be such that quashing of the proceedings may not be in the interest of justice. In such a case, it has been observed, it is open to the Court to make such other appropriate order as it finds just and equitable in the circumstance of the case."
22. After examining the said judgments of Antulay's and Chaman Lal Goyal's case the Hon'ble Supreme Court held in Para 19 as follows:
"19. It is not possible to lay down any predetermined principles applicable to all cases and in all situations where there is delay in concluding the disciplinary proceedings. Whether on that ground the disciplinary proceedings are to be terminated each case has to be examined on the facts and circumstances in that case. The essence of the matter is that the Court has to take into consideration all the relevant factors and to balance and weigh them to determine if it is in the interest of clean and honest administration that the disciplinary proceedings should be allowed to terminate after delay particularly when the delay is abnormal and there is no explanation for the delay. The delinquent employee has a right that disciplinary proceedings against him are concluded expeditiously and he is not made to undergo mental agony and also monetary loss when these are unnecessarily prolonged without any fault on his part in delaying the proceedings. In considering whether the delay has vitiated the disciplinary proceedings the Court has to consider the nature of charge, its complexity and on what account the delay has occurred. If the delay is unexplained prejudice to the delinquent employee is writ large on the face of it. It could also be seen as to how much the Disciplinary Authority is serious in pursuing the charges against its employee. It is the basic principle of administrative justice that an officer entrusted with a particular job has to perform his duties honestly, efficiently and in accordance with the rules. If he deviates from this path he is to suffer a penalty prescribed. Normally, disciplinary proceedings should be allowed to take their course as per relevant rules but then delay defeats justice. Delay causes prejudice to the charged officer unless it can be shown that he is to blame for the delay or when there is proper explanation for the delay in conducting the disciplinary proceedings. Ultimately, the Court is to balance these two diverse considerations."
(Emphasis supplied).
If we have regard to the above mentioned observations and principles laid down by the Hon'ble Supreme Court, it is seen that, in the present case there is no explanation at all by the respondents in not concluding the departmental proceedings initiated against her vide Memorandum dated 20th December, 1995 despite submission of the inquiry report on 22nd March, 1999 and the directions issued by this Tribunal on 19th July, 2001 in O.A. No. 955 of 2001. The applicant is not responsible for prolonging the said departmental proceedings. Even though the interim order was vacated on 11.9.2002 and the respondents were allowed to conclude the proceedings, yet no final order has been passed. It is settled law that the delinquent employee has a right that disciplinary proceedings against him/her are concluded expeditiously and he/she is not made to undergo mental agony and also monetary loss when the same are unnecessarily prolonged without any fault on his/her part in delaying the proceedings. In the present case, by keeping the proceedings alive and not concluding, the applicant has been made to suffer in terms of the denial of promotion since 1997 even on ad hoc basis and on regular basis since 1998. She has suffered not only in terms of monetary loss but in status too.
23. Though the learned Counsel for the applicant has cited a large number of citations on the ground of delay, we need not to discuss all of them as all of them were basically of different Benches of this Tribunal.
24. There is yet another aspect of the case, i.e., the applicant was denied not only documents which were listed in Annexure -III appended to the charge sheet dated 20th December, 1995, but even the additional documents which she had prayed for and allowed by the Inquiry Officer were not made available to her. Our attention has been drawn on this aspect by the learned Counsel for the applicant to the communications made by her to the Inquiry Officer on 25th November, 1998 (Annexures-A20 and A-21) where it had been specifically pointed out that the additional documents allowed for inspection by the Inquiry Officer were not made available to her, in any case, where the applicant had passed orders. The applicant had also objected to the documents inspected by her in 16 waiver cases and 5 Selection 144-A cases on the ground that the records so produced were incomplete, not in proper format as well as the entire records of cases were not produced for inspection. These aspects have been totally ignored by the Inquiry Officer in his report. It is settled law that the documents which have been listed in the charge sheet itself should be made available to the delinquent official and their relevancy or irrelevancy has to be judged from the defence angle. In the present case, despite the fact that the Inquiry Officer had himself allowed additional documents, the same were not produced and made available by the Presenting Officer. We have also perused voluminous inquiry report and find that the respondent No. 3 has time and again observed that the orders passed by the applicant were not "speaking order." We hasten to add that it was not within the province of Inquiry Officer to comment on the said aspect particularly when the said orders passed by the applicant were passed in the quasi judicial capacity and were not taken in appeal. As such, it would not be unjust to conclude that even the procedure followed by the Inquiry Officer is neither fair nor just.
25. The applicant has also drawn our attention to certain communications issued by the Deputy Commissioner of Income Tax, Hubli Range in the years 1990. 1998 etc. to show that the assessees petitions for waiver of interest under Section 217 were considered and orders were passed by the Deputy Commissioner of Income Tax for various assessment years prior to the assessment year commencing from 1st April, 1989. We have perused the said communications dated 30.11.1990, 3.12.1990, 7.12.1990, 8.5.1998 and so on. The said documents were produced on record by the applicant along with a memo dated 13.11.2002 and the contents of the said communications have not been disputed by the respondents. The learned Counsel for the respondents has brought to our attention the judgment of the Hon'ble Supreme Court in Transport Commissioner v. A. Radha Krishna Moorthy, (1995) 1 SCC 332, particularly Para 7 which reads under:
"7. So far as the truth and correctness of the charges is concerned, it was not a matter for the Tribunal to go into-- more particularly at a stage prior to the conclusion of the disciplinary enquiry. As pointed out by this Court repeatedly, even when the matter comes to the Tribunal after the imposition of punishment, it has no jurisdiction to go into truth of the allegations/charges except in a case where they are based on no evidence, i.e. where they are perverse. The jurisdiction of the Tribunal is akin to that of the High Court under Article 226 of the Constitution. It is power of judicial review. It only examines the procedural correctness of the decision-making process. For this reason the order of the Tribunal in so far as it goes into or discusses the truth and correctness of the charges, is unsustainable in law."
With respect, we may state that the ratio laid down in the said case of Radha Krishna Moorthy's (supra) is not applicable to the facts of the present case.
26. We have perused the pleadings as well as documents on record carefully and considered the contentions raised by the parties from various angles. Keeping in view the law laid down by the Hon'ble Supreme Court in Z.B. Nagarkar's case, we are of the considered opinion that it is not a case where the department ought to have instituted disciplinary proceedings against the applicant and allowed the applicant to suffer unnecessarily. Under the provisions of the Income Tax Act. Rules made thereunder, the applicant had jurisdiction and power to waive or reduce interest and those powers being quasi judicial powers and functions, could not have been the subject matter of disciplinary proceedings particularly when there was no allegation either of corruption, culpable negligence or any motive on the part of the applicant. We are conscious that the Hon'ble Supreme Court held in various judgments that normally the Tribunal should not interdict with the disciplinary proceedings at the interlocutory stage but keeping in view the law laid down by the Hon'ble Court in Nagarkar's and Joshi's cases, we have come to the aforesaid conclusions.
27. In view of the findings recorded herein above we allow the O.A. and quash Memorandum dated 20th December, 1995 (Annexure-A1) with all its consequential benefits. Accordingly, the respondents are directed to open the sealed cover and give effect to the recommendations of the DPC held on 13/15th April, 1998 with all consequential benefits. This exercise should be completed within a period of 3 months from the date of receipt of a copy of this order. No costs.