TaxTMI 
TaxTMI 
2013 (8) TMI 251
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....cles of Charges framed against the respondent No.1. Article I: That Shri Ajit Kumar Singh, while functioning as Deputy Commissioner of Income-tax, Central Circle 1(3), Ahmedabad, committed irregularities as indicated below, in the course of passing the set aside assessment order on 28.3.2002 in the case of Shri Nitin P. Shah alias Modi, Ahmedabad, for assessment year 1997-98 - (i) Although in terms of express directions of the CIT (Appeals), he was required to adjudicate only on the taxability of a sum of Rs.67.75 lakh, Shri Ajit Kumar Singh, acting beyond his jurisdiction and flagrant violation of system and procedure thereby causing undue harassment to the assessee, held as taxable a sum of Rs.1.37 crores which the assessee had disclosed under the Voluntary Disclosure of Income Scheme of 1997 (VDIS) and in respect of which the Commissioner of Income-tax had issued a certificate. (ii) Having, thus held a sum of Rs.1.37 crores as taxable, Shri Ajit Kumar Singh acting beyond his jurisdiction and in flagrant violation of system and procedure thereby causing undue harassment to the assessee, further held that a sum of Rs.67.75 lakh will be separately assessable in independ....
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....r Singh, while functioning as Deputy Commissioner of Income-tax, Central Circle 1(3), Ahmedbad committed irregularities in the form of flagrant violation of system and procedure by antedating the assessment order to 15.03.2002 in the case of M/s Shree Araveli Finlease Ltd., Ahmedabad for A.Y. 1999-2000 in order to subvert the assessee's application filed on 18.03.2002 before the addl. Commissioner of Income Tax solicitating issuance of directions to Shri Singh u/s 144A of the I.T Act. By his aforesaid acts, Shri Ajit Kumar Singh failed to maintain integrity and devotion to duty and exhibited conduct unbecoming of a Government servant in violation of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the CCS Conduct Rules, 1964. Article IV: That Shri Ajit Kumar Singh, while functioning as Deputy Commissioner of Income-tax, Central Circle 1(3), Ahmedbad, committed irregularities in finalising the assessment, prematurely on 15.3.2002 in the case of M/s Shree Araveli Finlease Ltd., Ahmedabad for A.Y. 1999-2000 without waiting for the enquiry report solicitated by himself from the Deputy Director of Income Tax, Udaipur, latest by 27.3.2002. By his aforesaid acts, Shri Ajit Kumar Singh....
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....spondent No.2 has a role. According to him on his representation in the year 2006 Member (Personnel) CBDT and the then CVO directed a detailed inquiry in the issue which resulted in a finding that respondent No.1 has no role to play and has not committed any misconduct. According to him it was at that stage that anonymous complaint against him was filed before the Finance Minister which was acted upon and a charge-sheet was issued to him. 6. The petitioners have contested the Original Application by inter-alia stating that the respondent No.1 while functioning as Deputy Commissioner of Income Tax has acted beyond his jurisdiction in holding sum declared by the assessee under the VDIS and also accepted by the Commissioner, Income Tax as taxable; displayed an attitude of insubordination and disrespect towards his superiors; commented upon issues on which the Central Board of Direct Taxes had already issued clarification; did not procure the approval of the Commissioner of Income Tax as required under the statutory provisions of Section 158 BG of the Income Tax Act before passing the block reassessment orders and antedated assessment orders in order to subvert the assesse's applica....
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....Inspector General of Police vs. K.S.Swaminathan, (1993) 24 ATC 1 U.O.I vs. K.K.Dhawan, (2006) 5 SCC 680 U.O.I vs. Dulichand, (2005) 6 SCC 106 U.O.I. vs. Narender Singh and (2007) 8 SCC 212 Chief Commercial Mananger, South Central Railway vs. G.Ratnam in support of his contentions challenging the conclusion of the Tribunal. 11. Per contra, the learned Senior Counsel for respondent No.1 submits that the perusal of the charges and the imputations in support of the charges would show that the same relate to his functioning as an Assessing Officer discharging quasi judicial function, with respect to certain assessment orders passed by him relating to some persons/ companies. The same cannot be subject matter of a charge-sheet. He would further submit that if an officer is performing judicial or quasi judicial function disciplinary action should be taken with utmost caution and with proper application of mind. In the present case, he would submit initially the Central Vigilance Commission has looked into the complaints made against him and did not find anything against him. He would further submit that the DIT (Vigilance) gave a report in his favour. So the approval given by the Finan....
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....ation by the DIT (Vigilance) reports on different dates were submitted and the last one being on April 09, 2008. Thereafter the Finance Minister/Disciplinary Authority approved the charge-sheet on July 21, 2008 which was issued to the respondent on October 20, 2008. 15. The dates reveal that after the Disciplinary Authority had approved the charge-sheet on July 21, 2008, the charge-sheet was issued to respondent No.1. Regrettably the Tribunal relies upon an earlier approval of February 14, 2006 for initiation of major penalty proceedings against the respondent No.1, to set aside the same. There is no requirement in the rules that the views of the employee concerned are to be ascertained before a charge-sheet is issued. The decision of the Disciplinary Authority should be meaningful, based on relevant material on record. A view in favour/against the employee in an internal inquiry/advice by Commission would only be a necessary input for the Disciplinary Authority for forming an opinion. If the decision making process demonstrates application of mind by the Disciplinary Authority then such a decision can't be interfered with. The Tribunal erred in setting aside the proceedings on ....
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.... the tribunal at the stage of framing of charges? In this case, the Tribunal has held that the charges are not sustainable (the finding that no culpability is alleged and no corrupt motive attributed), not on the basis of the articles of charges and the statement of imputations but mainly on the basis of the material produced by the respondent before it, as we shall presently indicate. 16. In so far as issue, whether the charge sheet could have been issued to the respondent No.1, if the charges relates to quasi judicial function has come up for consideration before the Supreme Court and this Court on many occasions. The legal position is as under: Legal Position 17. It is now well settled principle of law that an officer taking decision in exercise of quasi judicial function is not immune from disciplinary proceedings. However, it is only the conduct of the officer in discharge of his duties and not correctness or legality of his decision which could be the subject matter of the disciplinary proceedings. The Supreme Court in K.K.Dhawan's case (supra) has laid down, when a disciplinary proceedings can be initiated against an officer who is discharging quasi judicial functio....
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.... is vague or indefinite. Suspicion has no role to play in such matter. There must exist reasonable basis for the disciplinary authority to proceed against the delinquent officer. Merely because penalty was not imposed and the Board in exercise of its power directed filing of appeal against the order-in-original passed by the appellant could not be enough to proceed against him. There is no other instance to show that in similar case, the appellant invariably imposed penalty. 43. It every error of law were to constitute a charge of misconduct, it would impinge upon independent functioning of quasi-judicial officers like the appellant. Misconduct, in sum and substance, is sought to be inferred in the present case from the fact that the appellant committed an error of law. The charge-sheet on the face of it, does not proceed on any legal premise and is thus liable to be quashed. To maintain a 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 quasi-judicial order. Since nothing of the sort is alleged herein, the impugned charge-sheet is rendered illegal. The c....
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.... on the question. 8. In 1999 another Bench of two Judges in Zunjarrao Bhikaji Nagarkar considered and referred to these earlier decisions. However, the Court appears to have reverted back to the earlier view of the matter where disciplinary action could be taken against an officer discharging judicial functions only where there was an element of culpability involved. Since in that particular case there was no evidence whatsoever that the employee had shown any favour to the assessee to whom refund had been made, it was held that the proceedings against him would not lie. In fact the Court set aside the disciplinary proceedings at the stage of the issuance of charge-sheet to the charged officer. 9. In our opinion, Nagarkar case was contrary to the view expressed in K.K.Dhawan case. The decision in K.K.Dhawan being that of a larger Bench would prevail. The decision in Nagarkar case therefore does not correctly represent the law. Inasmuch as the impugned orders of the Tribunal and the High Court were passed on the law enunciated in Nagarkar case this appeal must be allowed. The impugned decisions are accordingly set aside and the order of punishment upheld. There will be no orde....
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....e to play in such matter. There must exist reasonable basis for the disciplinary authority to proceed against the delinquent officer. Merely because penalty was not imposed and the Board in the exercise of its power directed filing of appeal against that order in the the Appellate Tribunal could not be enough to proceed against the appellant. There is no other instance to show that in similar case the appellant invariably imposed penalty." 23. This Court in Writ Petition (Civil) 7054/2009 case titled Union of India & Ors. vs. Arindam Lahiri decided on March 20, 2009 has after referring to the aforesaid judgments of the Supreme Court in para Nos.35 & 36 has held as under: 35. Submission of the department, on the other hand, was that such a blanket immunity cannot be available even in respect of a Government officer discharging quasi-judicial functions and if his action results in any negligence thereby causing loss to the State, the same can be recovered as provided under the relevant Service Rules. The High Court found that judgment of the CAT was solely based on Nagarkar's case (supra). In this context, question arose as to whether Nagarkar's case (supra) was contrary to the....
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.... petitioner." 36. We are in agreement with the aforesaid view of the Madras High Court which has, in our respectful submission, correctly culled out the principle on the basis of all the aforesaid judgments in para 15 above. 24. This Court further in Writ Petition (Civil) No.5013/2010 case titled as Union of India & Ors. vs. Harsha Vardhan Chauhan has explicitly culled out on the basis of judgments referred above the scope of departmental action against an officer who discharges quasi judicial functions. 25. From the above it is clear that the grounds enumerated by the Supreme Court in K.K.Dhawan's case (supra) are to be applied when departmental action is contemplated against an officer discharging quasi judicial function. 26. Now our task is to see whether the grounds laid down by the Supreme Court and reiterated by this Court gets attracted in the facts of this case. What is of relevance is not the correctness or legality of the assessment orders passed by the respondent No.1 but the conduct of the respondent No.1 in discharge of his duties as an officer. We may note that the Tribunal has quashed the proceedings at the threshold. The inquiry was not proceeded with, s....
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....er, while passing Original assessment order vide CIT's letters F.No.CIT-1/DCSR-1/Elecon/BA/SG-4-96-97 dated 28.9.96 and 28.01.97. The matter remanded by ITAT on limited issue of verification of Share Capital. There was no practice of seeking second time approval of CIT in the remand proceeding as even other Assessing officers also did not obtain the Approval of CIT in remand proceedings. Even a senior AO, i.e, JCIT. S.R.-3, did not take approval in case of Dr.S.N.Harshe in the remand proceedings. Assessment order defended by the Department before ITAT by appointing Sh.Jagdeo, an officer of the Rank of CIT No specific enquiry ordered by ITAT. ITAT merely required adequate opportunities to be given and observed that the Assessing Officer 'would be at liberty to make the necessary enquiries'. This is just an unilateral inference. There is no evidence to even remotely suggest that the order was passed later and not on 04.03.2002. Article III & IV (1) He ante dated the assessment order dated 15.03.2002 in the case M/s Shree Araveli Finlease Ltd. in order to subvert the assessee application filed on 18.03.2002 before Addl. Commissioner of IT for issuance of directions to him u/s 144A ....