2025 (6) TMI 354 - HC - Indian Laws

Income Tax Officer promotion to Chief Commissioner not a vested right, requires Very Good performance ratings

The Union of India, The Cabinet Secretary to the Government of India, The Central Board of Direct Taxes (CBDT) through its Chairman, The Member (Personnel), the Central Board of Direct Taxes, The Chief Commissioner of Income – Tax, Jodhpur. Versus Narendra Kumar Jain s/o Late Shri Ghewarchand Ji Jain, The Central Administrative Tribunal, Jodhpur Bench, Jodhpur, The U.P.S.C. through the Chairman, Dholpur House, Shahjahan Road, New Delhi

The Rajasthan HC ruled that promotion from Commissioner of Income Tax to Chief Commissioner of Income Tax is not a vested right. The respondent-applicant ... Promotion from the post of Commissioner of Income Tax to that of Chief Commissioner of Income Tax - process of selection, wherein the assessment is based on the Annual Confidential Reports (ACRs) of the preceding five years, each of which must meet the prescribed benchmark of 'Very Good' - Whether the respondent-applicant satisfies the eligibility criteria and is entitled to the promotion sought by him? HELD THAT:- This Court is of the considered opinion that promotion is not a vested right. Even if the respondent was eligible, he was correctly found unsuitable/unfit solely on the basis of his ACRs for the preceding five years, and not due to any bias, by the DPC convened on 18.11.2009 for promotion to the post of CCIT. Hence, the respondent-applicant cannot assert a right to promotion. The appellants have not infringed his right to be considered for promotion. This Court also observes that as the first issue has been adjudicated in favour of the appellants, there remains no necessity to examine any other issue. Thus, in view of the above, the present writ petition is allowed, The core legal questions considered by the Court in this matter are:(a) Whether the respondent-applicant satisfied the eligibility criteria and was entitled to the promotion to the post of Chief Commissioner of Income Tax (CCIT) for the vacancy year 2008-09;(b) Whether, if the respondent-applicant was found eligible and entitled to promotion, such promotion could be granted with retrospective effect along with notional benefits.Regarding the first issue of eligibility and entitlement to promotion, the Court examined the relevant legal framework governing promotions within the Indian Revenue Service. Promotion from Commissioner of Income Tax to CCIT is governed by a selection process that requires the candidate's Annual Confidential Reports (ACRs) for the preceding five years to meet a benchmark rating of 'Very Good' or 'Outstanding'. The assessment involves a Departmental Promotion Committee (DPC) declaring the candidate either 'Fit' or 'Unfit' for promotion based on these ACRs.The Court relied on settled legal precedents, particularly the authoritative Supreme Court rulings in Dev Dutt v. Union of India and Abhijit Ghosh Dastidar v. Union of India. These decisions establish that every ACR entry, regardless of its nature, must be communicated to the employee within a reasonable time to afford the opportunity to submit a representation against it. Non-communication of an ACR entry is arbitrary and violates Article 14 of the Constitution. Furthermore, an uncommunicated ACR entry cannot be relied upon for assessing suitability for promotion.In the present case, the ACR for the year 2006-07 was initially not communicated to the respondent-applicant. Following litigation, the Tribunal directed the petitioners to communicate the ACR and allow a representation. The respondent-applicant's representation was considered by the competent authority, who found the performance 'at par with the benchmark,' but did not formally upgrade the ACR rating from 'Good' to 'Very Good'. Despite the respondent-applicant meeting all departmental targets and consistent past performance, the Review DPC declared him 'Unfit' for promotion on the ground that the ACR did not meet the prescribed benchmark.The Court analyzed the distinction between 'eligibility' and 'suitability.' Eligibility refers to fulfillment of prescribed objective criteria, whereas suitability involves a holistic evaluation of competence and merit. Although the respondent-applicant was eligible, he was ultimately found unsuitable based on the ACR ratings. The Court rejected the contention that the respondent-applicant was discriminated against, observing that his candidature was duly considered and rejected on merit, not due to any arbitrariness or bias.The Court also noted that the Tribunal's direction to consider the ACR of 2001-02 instead of 2006-07 was not pleaded by the respondent-applicant and amounted to the Tribunal exceeding its jurisdiction by effectively changing the promotion criteria. The Court distinguished this case from the precedent relied upon by the respondent-applicant where exceptional circumstances justified such consideration.Regarding the second issue of retrospective promotion, the Court found it unnecessary to adjudicate since the respondent-applicant was not found entitled to promotion on merits. However, the Court referenced the Supreme Court's ruling in Government of West Bengal v. Dr. Amal Satpathi, which clarified that constitutional guarantees under Articles 14 and 16(1) provide a right to be considered for promotion but do not confer a right to the promotion itself. The Court emphasized that promotion becomes effective from the date it is granted and not from the date a vacancy arises.In addressing competing arguments, the Court considered the petitioners' submission that the promotion rules required all five preceding years' ACRs to meet the benchmark and that the respondent-applicant's 2006-07 ACR was rightly considered. The Court also examined the respondent-applicant's claim of discrimination and arbitrary treatment, including comparison with a colleague who was promoted under similar circumstances. The Court found no merit in these claims, noting that the review process and DPC decisions were conducted in accordance with rules and principles of fairness.In conclusion, the Court held that:- The respondent-applicant was eligible but not suitable for promotion as he failed to meet the prescribed benchmark in the relevant ACRs.- The Tribunal's direction to consider an unrelated ACR year was beyond its jurisdiction and unsustainable.- The petitioners did not violate any legal or constitutional rights of the respondent-applicant.- The respondent-applicant's right was to be considered for promotion, not to receive promotion as a matter of right.- Since the first issue was decided against the respondent-applicant, the question of retrospective promotion did not arise.The Court accordingly allowed the writ petition, quashing and setting aside the impugned order of the Tribunal dated 30.03.2010.Significant holdings and core principles established include the following verbatim excerpts:'Every entry in the ACR of a public servant must be communicated to him within a reasonable period, whether it is a poor, fair, average, good or very good entry. This is because non-communication of such an entry may adversely affect the employee in two ways: (1) had the entry been communicated to him he would know about the assessment of his work and conduct by his superiors, which would enable him to improve his work in future; (2) he would have an opportunity of making a representation against the entry if he feels it is unjustified, and pray for its upgradation. Hence, non-communication of an entry is arbitrary, and it has been held by the Constitution Bench decision... that arbitrariness violates Article 14 of the Constitution.''Promotion becomes effective from the date it is granted, rather than from the date a vacancy arises or the post is created. While the Courts have recognized the right to be considered for promotion as not only a statutory right but also a fundamental right, there is no fundamental right to the promotion itself...''The concepts of 'eligibility' and 'suitability' for promotion are distinct and operate on different parameters. While 'eligibility' pertains to the fulfillment of prescribed minimum qualifications or criteria and is an objective determination, 'suitability' entails a more nuanced and holistic evaluation of a candidate's competence, experience, and alignment with the functional requirements of the post.''The Tribunal exceeded its jurisdiction by directing consideration of the applicant's candidature for promotion on the basis of past records rather than the criteria actually prescribed for promotion.'Final determinations on each issue:1. The respondent-applicant was not entitled to promotion to the post of CCIT for the vacancy year 2008-09 as he did not meet the prescribed benchmark in the relevant ACRs and was found unsuitable on merit.2. The Tribunal's order directing consideration of an earlier ACR year was quashed as beyond jurisdiction and unsupported by pleadings.3. The respondent-applicant's right to be considered for promotion was not infringed, and no discrimination or arbitrariness was established.4. Since entitlement to promotion was not established, the question of retrospective promotion did not arise.