1.Accountability of Assessing Officers - Exposition by the Supreme Court
The views expressed by the Apex Court in some cases decided by it are summarised below :
(1) Union of India v. A.N. Saxena AIR 1992 SC 1233 - The respondent was an ITO. A memorandum of charges or charge sheet was served on the respondent. The first article of charge was to the effect that the respondent while functioning as an ITO completed assessment in an irregular manner, designed to confer undue benefit on the assessees concerned. The statement of imputations for misconduct and misbehaviour was forwarded along with the charge sheet.
The respondent filed an application before the Central Administrative Tribunal for setting aside the aforesaid charge sheet and for an interim relief restraining the applicants - the department - from taking disciplinary proceedings against him. The Tribunal granted the interim relief which was impugned in appeal by the appellants in the Supreme Court.
The Court allowed the appeal, set aside the impugned order of the Tribunal, and directed that the disciplinary proceedings against the respondent in terms of the charge sheet issued shall be proceeded with according to law.
The Court observed : (i) The argument that no disciplinary action can be taken in regard to actions taken or purported to be done in course of judicial or quasi-judicial proceedings is not correct. (ii) It is true that when an officer is performing judicial or quasi-judicial functions, disciplinary proceedings regarding any of his actions in the course of such proceedings should be taken only after great caution and a close scrutiny and only if the circumstances so warrant. (iii) The initiation of such proceedings, it is true, is likely to shake the confidence of the public in the officer concerned and also, if lightly taken, likely to undermine his independence. Hence, the need for extreme care and caution before initiation of disciplinary proceedings against an officer performing judicial or quasi-judicial functions in respect of his actions in the discharge or purported discharge of his functions. (iv) But it is not as if such action cannot be taken at all; where the actions of such an officer indicate culpability, namely, a desire to oblige himself or unduly favour one of the parties or an improper motive, there is no reason why disciplinary action should not be taken. (v) It is somewhat surprising that in a disciplinary enquiry pertaining to serious charges, the respondent was allowed to retire voluntarily under Fundamental Rule 56(k). It is not known whether it was duly considered whether the application for voluntary retirement ought to have been rejected in view of the pending enquiry, and also in view of the seriousness of the charges levelled against the respondent.
(2) Union of India v. K.K. Dhawan AIR 1993 SC 1478 - The respondent, while working as ITO during the year 1982-83, completed certain assessments. A charge memorandum was served on him to the effect that it was proposed to hold an inquiry against him under rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965. The statement of articles of charge framed against him, inter alia, stated that while functioning as an ITO during 1982-83, he completed nine assessments in an irregular manner, in undue haste and apparently with a view to conferring undue favour upon the assessee concerned, and that by his aforesaid Acts, he failed to maintain absolute integrity and devotion to duty and exhibited a conduct unbecoming of a Government servant thereby violating provisions of rules 3(1)(i), (ii) and (iii) of the Central Civil Services (Conduct) Rules, 1964.
The respondent preferred an application before the Central Administrative Tribunal, New Delhi, praying for a stay of the disciplinary proceedings, and to consider his case for promotion on merits without resort to the sealed cover procedure.
The Tribunal allowed the application, and held that the action taken by the officer was quasi-judicial and should not have formed the basis of disciplinary action. Accordingly, the memorandum of charged was quashed.
Aggrieved by the Tribunal’s order, the Government appealed to the Supreme Court. Allowing the appeal, the Court held :
(a) The article of charge clearly mentions that the nine assessments covered by the article of charge were completed in an irregular manner, in undue haste and apparently with a view to conferring undue favour upon the assessee concerned. If that be so, certainly disciplinary action is warranted.
(b) The officer who exercises judicial or quasi-judicial powers if he acts negligently or recklessly or in order to confer undue favour on a person, he is not acting as a judge.
(c) It is important to bear in mind that in the instant case, we are not concerned with the correctness or legality of the decision of the respondent, but the conduct of the respondent in the discharge of his duties as an officer.
(d) The legality of the orders with reference to the nine assessments may be questioned in appeal or revision under the Act. But we have no doubt in our mind that the Government is not precluded from taking disciplinary action for violation of the Conduct Rules.
(e) The Supreme Court concluded that disciplinary action can be taken in the following cases : (i) Where the officer has acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty. (ii) If there is prima facie material to show recklessness or misconduct in the discharge of his duty. (iii) If he has acted in a manner which is unbecoming of a Government servant. (iv) If he had acted negligently or omitted the prescribed conditions which are essential for the exercise of the statutory powers. (v) If he had acted in order to unduly favour a party, and (vi) If he had been actuated by corrupt motive, however small the bribe may be, because Lord Coke said long ago “though the bribe may be small, yet the fault is great”.
(3) Government of Tamil Nadu v. K.N. Ramamurthy AIR 1997 SC 3571 - The respondent was a Deputy CTO. Charges were framed against him under rule 17(b) of Tamil Nadu Civil Services (Classification, Control and Appeal) Rules, 1953 to the effect : (i) that he failed to analyse the facts involved in each and every case, (ii) that he failed to check the accounts deeply and thoroughly while making the final assessment, (iii) that he failed to subject the turnover to tax originally, and (iv) that he failed to safeguard the Government revenue to a huge extent of Rs. 44,850.
After a due and proper enquiry, it was found that the charges were proved. Accordingly, the punishment of stoppage of increment for three years with cumulative effect was imposed.
The respondent challenged the aforesaid punishment before the Tamil Nadu Administrative Tribunal which set aside the punishment on the finding that there is a hierarchy of authorities constituted under the T.N. General Sales Tax Act for correction if the original order of assessment is wrong. Even if palpably wrong, the Assessing Officer cannot be subjected to disciplinary proceedings, since while passing such orders, he exercises quasi-judicial functions conferred on him under the General Sales Tax Act.
Allowing the appeal of the Government of Tamil Nadu, the Supreme Court held :
(i) The finding accepted by the disciplinary authority was to the effect that by the act of negligence in making the assessment, the delinquent caused loss to the Government exchequer to the extent of Rs. 44,850. This finding of the disciplinary authority is not open to challenge on the facts of this case.
(ii) The T.N.A.T. has no jurisdiction to go into the correctness or truth of the charges, and the Tribunal cannot take over the functions of the disciplinary authority.
(iii) In view of K.K. Dhawan’s case (supra), the view taken by the Tribunal has to be set aside. The instances catalogued therein are not exhaustive. However, it is stated that for a mere technical violation, or merely because the order is wrong and action not falling under the said enumerated instances, disciplinary action is not warranted. Here, a word of caution is added. Each case will depend on the facts, and no absolute rule can be postulated.
2. The Direct Tax Law Committee in its Interim Report as far back as December 1977 observed :
“In our country, tax litigation has been proliferating in an alarming measure in recent years. Not merely is there too much litigation, but the delays in the administration are equally disheartening. This problem can be tackled by ensuring that the litigation is minimised, and at the same time, ensuring that whatever litigation is inevitable, the same will be disposed of as expeditiously as possible.”
The CBDT has released a Citizen’s Charter - A Declaration of commitment to excellence in service to taxpayers. The department expects to be fair :
(1) By being impartial and objective, and (2) By collecting taxes as per the law.
The income-tax law is per se complicated, and taxpayers are flooded with instructions, guidance notes, and Circulars from the CBDT to enlighten them about the way the statutory provisions are to be interpreted. This plethora of instructions invokes admiration for the spirit shown by the CBDT to help taxpayers. However, the candid truth is that tax assessments involve both subjective and objective considerations, and that the Assessing Officer is a quasi-judicial statutory authority who has to safeguard the revenue department’s interests, and at the same time, display objectivity in framing assessments.
Further, the Act is replete with provisions threatening taxpayers with dire consequences for violation of the income-tax law, whether minor or major. Even if the returns filed are proved to be bona fide, mandatory interest, stiff penalties, and threats of prosecution haunt the taxpayers. On the other hand, section 293 gives protection to the Assessing Officer against action being initiated for over-pitched assessments.
Consequently, taxpayers have a right to expect fair conduct from the Assessing Officer in assessment proceedings and from the departmental representatives and standing counsel when the assessments reach the Tribunal and the High Court for adjudication.
207-T
source: TAXMANN
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