No Quashing of Charge Sheet at threshold - Income Tax Commissioner Loses in High Court
THIS is an interesting case before the High Court at Hyderabad.
The respondent is a Commissioner of Income Tax (CIT). The Department issued a charge sheet against him on the following grounds:
1. The CIT (A) passed an appellate order 30.05.2014. The appeal was stated to have been filed on 31.03.2014 which was a Monday and a Closed Holiday on account of Ugadi (Telugu New Year Day). However, the CBDT issued an Order under Section 119 (1) of the Income Tax Act, 1961 on 24.03.2014, directing the 'field Income Tax Offices' throughout India to remain open and the 'receipt counters' to work during normal office hours on 29th, 30th and 31st of March, 2014 (i.e. Saturday, Sunday and Monday).
2. But, it is claimed by the CIT that he came to the office on 31.03.2014 to see that his office was functioning on that day. He has also certified that his office functioned on 31.03.2014 and an appeal was filed by the assessee and the same was received by Sr. P.S., but not by the Sr. T.A. or O.S. of his office. It is ascertained, the CIT had availed permission to leave the Headquarters from the evening of 28.03.2014 to the morning of 01.04.2014 and in such circumstances, he could not have visited the Income-tax Office on 31.03.2014.
3. An analysis of the meta data of the hard disk of the computers used in the office of the CIT revealed that the appellate order was found to be transferred from a pen drive into the computer of the P.S. on 24th June, 2014 at 10.54.40 a.m. Therefore, the appellate order shown as passed on 30.05.2014 could not have been passed either on 30.05.2014 or before 24.06.2014. This makes it clear that the date of the order as mentioned in the appellate order was actually ante-dated as 30.05.2014. Further, the order was not prepared in the O/o the CIT (A), but has been brought from outside in pen-drive and copied into the computer of the P.S. and issued. But, the record is maintained in such a way that as if the appellate order was dictated by the CIT by affixing a stamp in the order sheet bearing the words 'As dictated the appellate order is typed and put up within seven working days from the date of last hearing'. This stamp has been affixed by Sr. P.S. with his signature and the same is endorsed by CIT (A). However, the Sr. P.S. has affirmed in his statement that the appellate order was not dictated by the CIT (A), instead the same was given to him in a pen drive by the CIT (A) for the purpose of preparing a hard copy of the appellate order and submitting the same to the CIT(A). Thus, the appellate order obtained by the CIT (A) from an outsider in a pen drive is migrated into the computer of Sr. P.S. and converted into hard copy.
++ The appellate order shown to have been passed on 30.05.2014 was not communicated to the DGIT (IT), New Delhi and DIT (IT &TP), Hyderabad. In fact, the Assessing Officer was not even aware of the appeal proceedings and came to know of the appellate order only when informed by the assessee during the course of enforcement of the collection of demand raised in the assessment order.
You may wonder what is so strange and new about this, but this time the Department took it seriously and issued charge sheet to the CIT. Because there was a charge sheet, they removed his name from the Panel for promotion to the post of Principal Commissioner.
The CIT approached the Central Administrative Tribunal which quashed both the Charge Sheet and the deletion of his name from the Promotion Panel and directed the Department to promote him.
The Union of India is aggrieved and took the matter to the High Court.
Interestingly, in the High Court, both the parties relied on the very same decisions of the Supreme Court in Union of India and others v. K.K. Dhawan - and Zunjarrao Bhikaji Nagarkar v. Union of India and others - 2002-TIOL-130-SC-CX.
Incidentally Zunjarrao Bhikaji Nagarkar is no more good law as the Supreme Court in Union of India V Duli Chand - held, "The decision in Nagarkar's case therefore does not correctly represent the law." This fact of Duli Chand was apparently not brought to the notice of the High Court. Any way that does not make any difference in the decision as the High Court held,
The Supreme Court has cautioned time and again that once a charge memorandum is quashed, a person is let off without even an enquiry. But if a charge memo is not quashed, the maximum damage that is done to an officer is to compel him to face an enquiry and come out clean in a test of fire. In the light of the imputations of misconduct alleged against the 1st respondent, however valid and good defence he may have to the charge memo, he is liable to face the enquiry. The Tribunal faulted in quashing the charge memo at the threshold without properly appreciating the imputations of misconduct. Therefore, the order of the Tribunal quashing the charge memo is liable to be set aside.
Once the order of the Tribunal quashing the charge memorandum is set aside, the order of the Tribunal directing the reinclusion of the name of the 1st respondent in the panel for promotion to the post of Principal Commissioner of Income Tax should also go. The only reason why the name of the 1st respondent was deleted from the panel for promotion was the issue of the charge memo. The only ground on which the Tribunal granted the relief of promotion to the 1st respondent was the setting aside of the charge memo. Therefore, the order in the next writ petition should naturally follow the order in the first writ petition .
So the CIT has to now come out clean in a test of fire.
An aside: Immediately after we carried the Duli Chand Judgement in 2006, I got a telephone call and the caller said, "I am Duli Chand”. I was flabbergasted. I was rather inexperienced and for me Duli Chand was only a case, a citation and I couldn't believe that my case law would call me. It was like a character in a story walking out of the story to talk to you.