2017 (9) TMI 1297 - HC - Indian Laws

Memorandum of Charge - misconduct in discharge of duties as DCIT - delay in initiating the disciplinary proceedings causes prejudice to the employee - seeking expunction of adverse entries in the ACR and for upgradation of the same. - Held that - There is no allegation of corrupt motive or corrupt practice attributed to the petitioner in any of the Memorandums of Charge. So far as second Memorandum of Charge, which has been served after delay of about seven years, is concerned, the department for the first time, raised a contention in respect of lack of jurisdiction invested with the petitioner for deciding the cases. Though the department presented appeals challenging the appellate orders passed by the petitioner, such contention was never raised before any forum. The contention raised by the department, in that regard, is also questionable. The decisions rendered by the petitioner on merit in the matter of Mr. Rakesh Sarin are questioned referring to the interpretation put by the petitioner to certain precedences / case law and the interpretation of the relevant provisions of Income Tax Act. Merely because the interpretation put by the petitioner may not be acceptable to the department, itself cannot be a matter of departmental enquiry. If such view is accepted, it would be highly impossible for the quasi- judicial authorities to take decisions in the matter, which would severely prejudice the administration. The department has not attributed anywhere corrupt motive or dishonest conduct on the part of the petitioner while deciding the matters. The belated Memorandums of Charge served on the petitioner surely causes prejudice to the petitioner. Gravity of the allegations also do not calls for permitting the department to proceed with the belated charges levelled against the petitioner after 20 years and seven years, respectively.

Summary

Issues Involved:
1. Legality of the Memorandum of Charge and delay in issuing it.
2. Validity of departmental proceedings against decisions made in a quasi-judicial capacity.
3. Impact of delay on the disciplinary proceedings.
4. Jurisdictional issues related to the petitioner's decisions.

Detailed Analysis:

1. Legality of the Memorandum of Charge and Delay in Issuing It:

The petitioner, an employee of the Income Tax Department, challenged the Memorandum of Charge issued on 14.03.2014, arguing that it was issued almost 20 years after the alleged irregularities in assessment orders from 1992-93 and 1993-94. The petitioner contended that three out of the six cases mentioned in the charge sheet had already been the basis for adverse entries in his ACR, which were later expunged. The court noted that there was no reasonable explanation for the delay, and referenced the Supreme Court's judgments in M.V. Bijlani, Bani Singh, P.V. Mahadevan, and N. Radhakishan, which emphasize that inordinate delay in initiating disciplinary proceedings causes prejudice to the employee. Consequently, the charges were deemed unsustainable due to the delay.

2. Validity of Departmental Proceedings Against Decisions Made in a Quasi-Judicial Capacity:

The petitioner argued that decisions made in his quasi-judicial capacity as Commissioner of Income Tax (Appeals) should not be subject to departmental scrutiny. The court highlighted that the correctness of quasi-judicial decisions should be assessed by appellate forums, not through departmental proceedings, unless there is an allegation of mala fide, corruption, or lack of integrity. The court cited the Supreme Court's ruling in K.K. Dhawan, which allows for disciplinary action against quasi-judicial officers only under specific circumstances, none of which were applicable in the petitioner's case. Thus, the court found that the charges based on quasi-judicial decisions were not valid.

3. Impact of Delay on the Disciplinary Proceedings:

The court emphasized that the delay in issuing the charge sheets caused significant prejudice to the petitioner, especially since the charges were brought up when he was in the zone of consideration for promotion. The court referenced multiple Supreme Court judgments, including those in Bani Singh and P.V. Mahadevan, which underscore that prolonged delays in disciplinary proceedings are inherently prejudicial. The court concluded that the delay itself was a sufficient ground to quash the charges.

4. Jurisdictional Issues Related to the Petitioner's Decisions:

The second charge sheet, also issued on 14.03.2014, concerned the petitioner's decisions in 2006-2007 as Commissioner of Income Tax (Appeals) related to an assessee named Mr. Rakesh Sarin. The department argued that the petitioner lacked jurisdiction to decide these appeals. However, the court noted that the department did not raise this jurisdictional issue in its appeal to the Income Tax Appellate Tribunal (ITAT) at the relevant time. The court found that the petitioner's interpretation of the High Court's order, although potentially erroneous, did not constitute a violation warranting departmental proceedings. The court held that any error in interpreting the High Court's "liberty" as a "direction" was a matter of judicial capability, not misconduct.

Conclusion:

The court allowed both writ petitions, quashing the Memorandums of Charge issued to the petitioner. It ruled that the charges were unsustainable due to the inordinate delay and the improper basis of scrutinizing quasi-judicial decisions in departmental proceedings. The court made the rule absolute and did not award any costs.