2019 (4) TMI 65 - SC - Income Tax

Challenge of stricter passed by High Court against AO - adverse remarks - HELD THAT - High Court was not justified in its remarks against the petitioner and in issuing the directions which it has issued. The High Court, in the course of its judgment has issued a slew of directions including (i) The necessity of weeding out deadwood ; (ii) imposition of costs of ₹ 1.5 lakhs which are to be apportioned among two officers, out of them being the petitioner; (iii) Making an adverse entry in the Annual Confidential Reports of the petitioner; and (iv) Denial of promotion including monetary benefits to the petitioner. Apart from the fact that these directions were issued without specific notice to the petitioner, we find that they were wholly unnecessary having regard to the lis before the High Court. We accordingly, expunge the adverse remarks made against the petitioner in the impugned judgment and order of the High Court as well as the directions issued against the petitioner. Since the assessee is not concerned with the grievance which has been made by the petitioner before this Court, it was not necessary to issue notice to him in the present proceedings. SLP accordingly, disposed of.

Summary

Issues Involved:
- Adverse remarks made against the petitioner by the High Court.
- Directions issued by the High Court, including imposing costs, making adverse entries in Annual Confidential Reports, and denial of promotion to the petitioner.
- Justification of the High Court's remarks and directions.
- Need for specific notice to the petitioner before issuing directions.
- Impact of the judgment on the rights of the assessee and the Revenue.

Adverse Remarks and Directions:
The Supreme Court granted permission to file a Special Leave Petition and condoned the delay in re-filing it. The judgment focused on the adverse remarks made against the petitioner by the High Court, particularly criticizing the conduct of the Deputy Commissioner of Income Tax. The petitioner challenged the adverse remarks and directions issued by the High Court, which included weeding out 'deadwood', imposing costs, making adverse entries in Annual Confidential Reports, and denying promotion to the petitioner. The Supreme Court found these directions unnecessary and issued without specific notice to the petitioner, leading to the expunging of the adverse remarks and directions against the petitioner.

Justification and Notice Requirement:
The petitioner's counsel argued that there was no justification for the High Court to make the adverse remarks and issue the directions against the petitioner. The Supreme Court agreed with this submission, stating that the High Court was not justified in its remarks and directions, especially considering the absence of specific notice to the petitioner before issuing them. The Court clarified that the High Court's actions were unnecessary in the context of the case before it, leading to the removal of the adverse remarks and directions against the petitioner.

Impact on Assessee and Revenue Rights:
The Supreme Court clarified that the judgment's disposal did not affect the rights of the assessee and the Revenue on the merits of the assessments. The Court highlighted that since the assessee was not involved in the petitioner's grievance before the Court, notice to the assessee was not required in the proceedings. The judgment ensured that the rights of the assessee and the Revenue were preserved despite the decision regarding the adverse remarks and directions against the petitioner.

Conclusion:
In conclusion, the Supreme Court addressed the issues of adverse remarks and directions made by the High Court against the petitioner, emphasizing the lack of justification and the absence of specific notice to the petitioner. The judgment safeguarded the rights of the assessee and the Revenue while rectifying the unnecessary actions taken by the High Court, ultimately disposing of the Special Leave Petition in favor of the petitioner.