2009 (3) TMI 909 - HC - Income Tax

Penalty imposed - promotion of respondent to the post of Chief Commissioner of Income Tax - Held that - It is a case where in exercise of our extraordinary jurisdiction under Article 226 of the Constitution of India we should not interfere with the direction given by the Tribunal in the impugned judgment. From the minutes of the DPC meeting held on 25.11.2005 it is clear that the DPC had found the respondent fit for promotion even after taking into consideration the penalty imposed upon the respondent herein. The note of the Cabinet Secretary which was prepared for ACC has to be read in this backdrop. The Tribunal is right that it is only because the period of penalty had not been over the recommendation was that the respondent should not be promoted at that stage. Matter would have been different if after taking into consideration the said penalty the DPC would have held the respondent to be unfit for promotion inasmuch as it is within the jurisdiction of the DPC to check the overall record of the candidate. However as mentioned above penalty was taken into consideration. We may also take note of Para 12.2 of the Government Instructions dated 30.8.1990 as per which when the employee is found fit for promotion notwithstanding the penalty such promotion is to be given after the currency of the penalty. Moreover had the intention of ACC was to deny the promotion outright even when DPC had recommended the case of the respondent for promotion finding him fit as per the procedure ACC would have sent the matter back to the DPC which was not done. Appeal dismissed.

Issues Involved:
1. Legality of the penalty imposed after a departmental inquiry.
2. Entitlement of the petitioner to promotion to the post of Chief Commissioner of Income Tax.
3. Judicial review of the disciplinary authority's decision.
4. Delay in the disciplinary proceedings and its impact on the petitioner's promotion prospects.
5. Evaluation of quasi-judicial actions in the context of disciplinary proceedings.

Issue-wise Detailed Analysis:

1. Legality of the Penalty Imposed After a Departmental Inquiry:

The petitioner, an Income Tax Officer, was charged with misconduct in two articles. The first charge alleged he entertained and disposed of a petition with malafide intention, ignoring statutory requirements and ITAT decisions. The second charge accused him of deciding appeals with perverse and malafide orders, ignoring material evidence and not giving the assessing officer an opportunity to represent the case.

The petitioner denied the charges, but the Inquiry Officer found both charges proved. The disciplinary authority accepted the findings and imposed a penalty of reduction by three stages in the time-scale of pay for three years. The petitioner challenged this penalty, arguing that as a quasi-judicial authority, there was no evidence of misconduct, and the charges were based on apprehensions and doubts without concrete evidence.

The court found that the disciplinary authority's findings were based on presumptions and surmises, with no direct evidence of malafide intentions. The court emphasized that mere doubts or suspicions could not substitute for proof, especially when the petitioner was exercising quasi-judicial powers. Consequently, the court directed the disciplinary authority to pass fresh orders considering only the limited extent of the proven charge.

2. Entitlement of the Petitioner to Promotion to the Post of Chief Commissioner of Income Tax:

The petitioner's promotion was withheld due to the penalty imposed. Even though the penalty period expired, the petitioner was denied promotion while 55 juniors were promoted. The Tribunal directed that the petitioner be promoted from the date the penalty period ended. The court upheld this direction, noting that the Disciplinary Promotion Committee (DPC) had found the petitioner fit for promotion despite the penalty, and the Appointing Committee of the Cabinet (ACC) had not provided valid reasons for rejecting the DPC's recommendation.

3. Judicial Review of the Disciplinary Authority's Decision:

The court reiterated the limited scope of judicial review in disciplinary matters. It emphasized that courts should not reappreciate evidence or act as appellate authorities but can interfere if there is no evidence or if the findings are perverse. In this case, the court found that the disciplinary authority's conclusions were based on suspicions without concrete evidence, warranting judicial intervention.

4. Delay in the Disciplinary Proceedings and Its Impact on the Petitioner's Promotion Prospects:

The petitioner argued that the delay in disciplinary proceedings adversely affected his promotion chances. The court acknowledged the undue delay and its impact, citing precedents where prolonged disciplinary proceedings were grounds for quashing penalties. The court suggested that even if the penalty was maintained, it should be ante-dated to avoid affecting the petitioner's promotional prospects.

5. Evaluation of Quasi-Judicial Actions in the Context of Disciplinary Proceedings:

The court discussed the principles governing disciplinary actions against quasi-judicial authorities, referencing the Supreme Court's judgments. It noted that disciplinary action could be taken if there was evidence of recklessness, misconduct, or undue favor. However, mere errors in judicial decisions or technical violations without evidence of mala fides could not justify disciplinary action. The court found that the petitioner's actions, though possibly erroneous, did not demonstrate malafide intentions or misconduct warranting the imposed penalty.

Conclusion:

The court set aside the Tribunal's and disciplinary authority's orders, directing the disciplinary authority to reconsider the penalty in light of the court's findings. It also upheld the Tribunal's direction to promote the petitioner from the date the penalty period ended, ensuring the petitioner's career progression was not unjustly hindered.

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