2019 (5) TMI 194 - HC - Income Tax

Removal of adverse remarks made against the Officer / counsel of the appellant - Ld. single judge made some adverse remark against Officer / counsel of the appellant - whether issuance of notice are required to the respondent herein writ petitioner/assessee? - whether the remarks/observations made in the impugned common order as against the officer of the appellant Department and its Senior Standing Counsel require to be expunged or not ? - HELD THAT - We hold that the respondent herein writ petitioner/assessee is not concerned about the observations/ adverse remarks made against the officer of the Department and their Senior Standing Counsel and consequently, we hold that no notice is required to be issued to the respondent herein writ petitioner/assessee. The legal principle that can be culled out from the above decisions is that unwarranted comments and remarks were not called for and what was important to bear in mind was as to whether the three cardinal tests laid down by the Hon'ble Supreme Court in the decision in the case of Mohammed Naim 1963 (3) TMI 63 - SUPREME COURT had been complied with. One of those three tests is as to whether the party, whose conduct is in question is before the court or has an opportunity of explaining or defending himself. In the instant case, neither the officer of the Department nor its Senior Standing Counsel had an opportunity of explaining or defending themselves. Therefore, the first test laid down in the decision in the case of Mohammed Naim has not been fulfilled in the instant case. The second test is as to whether there is evidence on record bearing on that conduct justifying the remarks. We have carefully gone through the memo filed by the Department and the observations made by the learned Single Judge. The memo sought for an innocuous prayer to adjourn the matter by 15 days. It referred to engagement of a Special Counsel from New Delhi, who had been nominated pursuant to a request made by the Director General of Income Tax (INV.), Chennai vide letter dated 17.12.2018. Thus, in our considered view, there was nothing to infer that the Senior Standing Counsel for the Department overstepped his brief or for that matter the conduct of the officer warranted certain observations against her. Therefore, we hold that the second test also does not stand fulfilled. The third test is as to whether it is necessary for the decision of the case, as an integral part thereof, to animadvert on that conduct we are of the clear view that the observations made by the learned Single Judge were not necessary for a decision in the case nor it is an integral part thereof. Therefore, we hold that the third test laid down does not stand satisfied. Considering the fact that none of the three tests as laid down by the Hon'ble Supreme Court in the decision in the case of Mohammed Naim has been fulfilled, we are of the clear view that the adverse remarks/ observations made against the officer/officers of the appellant Department or its Senior Standing Counsel are not warranted and accordingly, they need to be expunged. Writ appeals are allowed, the adverse remarks/ observations made against the officer/officers of the appellant Department or its Senior Standing Counsel in the common order dated 31.1.2019 are expunged and consequently, they must be treated as having never existed or being a part of the common order passed by the learned

Summary

Issues Involved:
1. Maintainability of the appeals filed by the Department.
2. Requirement of notice to the respondent (writ petitioner/assessee).
3. Justification for expunging adverse remarks made against the Department's officer and Senior Standing Counsel.

Issue-wise Detailed Analysis:

1. Maintainability of the Appeals Filed by the Department:

The court examined whether the appeals filed by the Department to expunge adverse remarks against their officer and Senior Standing Counsel were maintainable. Referring to the case of State of Maharashtra Vs. Public Concern for Governance Trust, the court held that the appeals were maintainable. The Supreme Court had previously ruled that appeals filed by the State to expunge remarks against officials were valid. Therefore, the appeals by the Department were deemed maintainable.

2. Requirement of Notice to the Respondent (Writ Petitioner/Assessee):

The court considered whether it was necessary to issue notice to the respondent (writ petitioner/assessee) regarding the appeals. Citing several precedents, including Sharad Bansilal Vakil Vs. Cibatual Ltd. and Sanjay Jain Vs. Nu Tech Corporate Service Ltd., the court concluded that the respondent was not concerned with the adverse remarks made against the Department's officer and Senior Standing Counsel. Consequently, no notice was required to be issued to the respondent.

3. Justification for Expunging Adverse Remarks:

The court analyzed whether the adverse remarks made by the learned Single Judge against the Department's officer and Senior Standing Counsel should be expunged. The analysis was guided by the principles laid down in the case of State of U.P. Vs. Mohammed Naim, which established three tests for making disparaging remarks:

- Opportunity to Defend (First Test): The court found that neither the officer nor the Senior Standing Counsel had an opportunity to explain or defend themselves before the remarks were made. Thus, the first test was not satisfied.

- Evidence on Record (Second Test): The court reviewed the memo filed by the Department, which sought an innocuous adjournment of 15 days. There was no evidence justifying the adverse remarks against the officer or the Senior Standing Counsel. Therefore, the second test was also not met.

- Necessity for Decision (Third Test): The court determined that the adverse remarks were not necessary for the decision of the case. The remarks did not form an integral part of the judgment, which concerned the search and seizure proceedings under the Income Tax Act. Consequently, the third test was not fulfilled.

The court further referenced multiple Supreme Court decisions, including Niranjan Patnaik Vs. Sashibhushan Kar, A.M.Mathur Vs. Pramod Kumar Gupta, and others, which emphasized judicial restraint and the necessity of providing an opportunity to the affected parties before making adverse remarks. The court concluded that the remarks were unwarranted and needed to be expunged.

Conclusion:

The court allowed the appeals, expunging the adverse remarks made against the Department's officer and Senior Standing Counsel in the common order dated 31.1.2019. The remarks were to be treated as having never existed or been part of the original order.