Disciplinary Action Against Quasi-Judicial Authorities Requires Evidence of Mala Fides Beyond Mere Errors of Judgment

The applicant, an Income Tax Officer (ITO), was issued a Memorandum of Charges on 08.04.2021 under Rule 14 of the CCS (CCA) Rules, 1965.

The charges alleged that while posted at Kendrapara during the financial year 2017-18, the applicant completed 27 scrutiny assessments in a reckless and negligent manner with mala fide intent.

The applicant contended that he was managing dual charges at Sambalpur and Kendrapara during the relevant period and had limited time to complete the assessments.

He further argued that the Commissioner (Respondent No. 4) failed to exercise revisional powers under Section 263 of the Income Tax Act, 1961, to correct the assessments, and instead initiated disciplinary proceedings with an ulterior motive.

Procedurally, the Inquiring Officer (I.O.) and Presenting Officer (P.O.) were appointed on 22.04.2021, before the charge sheet was served on the applicant on 30.04.2021.

1. Whether the initiation of disciplinary proceedings against a quasi-judicial authority for assessment orders passed under the Income Tax Act is legally sustainable in the absence of evidence of illegal gratification or "something more" beyond mere negligence.

2. Whether the appointment of an Inquiring Officer and Presenting Officer before receiving the written statement of defense violates the mandatory procedure under Rule 14(5) of the CCS (CCA) Rules, 1965.

Rule 14(5) of the CCS (CCA) Rules, 1965, which mandates that an inquiring authority be appointed only after receipt of a written statement of defense or the expiry of the period for such submission.

Section 293 of the Income Tax Act, 1961: Officers exercising quasi-judicial powers are protected from prosecution or proceedings for acts done in good faith.

Disciplinary action cannot be taken against a quasi-judicial authority for mere errors of law or "quality" of judgment unless there is "something more" like ulterior motive or corruption [Union of India v. K.K. Dhawan; D.P. Kar v. Union of India; P.C. Khandelwal v. Union of India].

The Tribunal observed that the applicant was performing a quasi-judicial function while passing assessment orders.

The Tribunal found that since there were no specific allegations of illegal gratification or corruption, the charges of "negligence" in a quasi-judicial capacity did not constitute misconduct.

The Disciplinary Authority appointed the I.O. and P.O. before the applicant had even been served the charge sheet or given an opportunity to file a defense, which directly contravened the statutory requirement of Rule 14(5) of the CCS (CCA) Rules.

The Tribunal quashed the Memorandum of Charges dated 08.04.2021 and allowed the Original Application.