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B. Padmanabha Baliga and ors. Vs. Commissioner of Income-tax and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberWrit Petition Nos. 484 and 2260 of 1966 and 3944 and 3954 of 1968
Judge
Reported in[1971]82ITR126(KAR); [1971]82ITR126(Karn); (1971)1MysLJ38
ActsIncome Tax Act, 1961 - Sections 117 and 117(2); Constitution of India - Article 309
AppellantB. Padmanabha Baliga and ors.
RespondentCommissioner of Income-tax and ors.
Appellant AdvocateK. Srinivasan, Adv.
Respondent AdvocateS.R. Rajasekhara Murthy, Adv.
Excerpt:
.....the commissioner acting under sub-section (2) of section 117 is subject to the control of the central government both in the matter of recruitment as well as in the matter of imposing conditions of service on the recruits. it is seen from the papers produced both by the petitioners as well as the respondent-department that the constitutions of the departmental promotions committee is traceable to certain circular instructions issued by the central board of revenue. if so, the inference is perfectly possible and reasonable that the ultimate authority from which administrative instructions for the constitution of such promotion committees emanated was a ministry of the central government which means the central government itself functioning through one of its appropriate ministries or..........are two or three other members, one of whom is a senior officer said to be a representative of the central board of revenue (now called the board of direct taxes). it is seen from the minutes that the opinion is recorded as a unanimous opinion of the entire committee. there is no record of any voting or recording a dissent by any one of the members in respect of the opinion of other members. if, therefore, the recorded opinion is an opinion of the entire committee of which the commissioner is a member we find it difficult to understand how the deliberations of the committee can be depended upon to show or make out that the commissioner has not applied his mind at all. when an opinion is a joint opinion of the committee consisting of 3 or 4 persons, the normal inference should be that the.....
Judgment:

Narayana Pai, C.J.

1. Common arguments were addressed in these writ petitions because the question of law raised is the same and facts are similar. They could also be conveniently disposed of by a common order.

2. As facts are similar, it would be sufficient to make a detailed reference to the facts of only one of them, namely, Writ Petition No. 484 of 1966.

3. The petitioner, Padmanabha Baliga, therein who joined service in the income-tax department as a steno-typist was at the relevant period an upper division clerk. He also appeared for and passed departmental test prescribed for eligibility for promotion to the cadre of income-tax inspectors. The examination of cases for promotion to the said higher cadre was periodically done by a committee called the departmental promotions committee of which the Commissioner of Income-tax is a member. The said committee at one of its sittings, having considered the cases of several people including the petitioner, recommended the promotion of respondents Nos. 3 and 4, Natarajan and Nagarajan, who were at the time of recommendation juniors to the petitioner both in the gradation list of the establishment and also from the point of view of the time at which they had passed the departmental tests. The said promotion of his juniors furnishes the grievance for the petition. The said promotion of his juniors furnishes the grievance for the petition. The prayer is for the issue of an appropriate writ quashing the orders promoting respondents Nos. 3 and 4 and for a consideration of the petitioner's case for promotion above respondents Nos. 3 and 4 or before they are promoted.

4. The general line of reasoning in support of the prayer is that according to sub-section (2) of section 117 of the Income-tax Act, 1961, the authority empowered to make the promotions in question is the Commissioner of Income-tax, that therefore the application of the mind to circumstances relevant for determining in whether are not a particular person should be promoted and the formulation of an opinion therefor is exclusively the power and the duty of the Commissioner and no one else, that the constitution of what are called departmental promotions committees and the linking of promotions to a recommendation by such a committee is outside the purview of the legal position as stated above, and that, by reason of the committee's recommendation alone having prevailed, it must be held that the commissioner has not exercised his statutory function and, therefore, the promotions impugned in the wright petition should be quashed as those not authorised by law. There is also the subsidiary argument that the circumstances indicated that there never has been any application of the mind by the Commissioner himself. It was also suggested in the affidavit in support of the petition and during the earlier stage of the arguments that even the committee had omitted to consider the case of the petitioner.

5. The last two subsidiary points may be disposed of first before taking up for consideration the general questions of law as to the legal status and authority of the departmental promotions committee. Counsel of behalf of the department has placed before us the minutes of the meeting of the departmental promotions committee at which the cases of the petitioners in these four petitions and of the respondents (other than the departmental authorities) were considered for purposes of promotion. We find from the recorded minutes that the case of every one of these petitioners was examined along with the cases of the respondents mentioned above and other persons similarly situated and that the committee has recorded its opinion on all these cases briefly against the names of persons arranged according to their seniority. The complaint, therefore, that the committee has not examined or considered the cases of the petitioners has to be rejects as not made out.

6. The connected question whether the Commissioner has or has not applied his mind, also appears to us to proceed upon certain inferences which need not necessarily be drawn. That the Commissioner is a member of the committee is an admitted fact. There are two or three other members, one of whom is a senior officer said to be a representative of the Central Board of Revenue (now called the Board of Direct Taxes). It is seen from the minutes that the opinion is recorded as a unanimous opinion of the entire committee. There is no record of any voting or recording a dissent by any one of the members in respect of the opinion of other members. If, therefore, the recorded opinion is an opinion of the entire committee of which the Commissioner is a member we find it difficult to understand how the deliberations of the committee can be depended upon to show or make out that the Commissioner has not applied his mind at all. When an opinion is a joint opinion of the committee consisting of 3 or 4 persons, the normal inference should be that the ultimate opinion is one to which every one of the members has made a contribution, and if that opinion is unanimous, then it certainly means that every one of the members who has contributed to that opinion agrees with it and that therefore the unanimous opinion is also the individual opinion of every one of the members. In that view, we have no hesitation in rejecting the argument that the Commissioner has not applied his mind to the consideration of the cases of the petitioner or other persons similarly situated for purposes of promotion.

7. We come now to the only contention of the law which is of importance in this case, namely, whether the departmental promotions committee lacks legal foundation for its operation or the binding nature of its opinion.

8. The argument of the petitioners is that there is no statute or statutory rule authorizing the constitution of any such committee. According to sub-section (2) of section 117 of the Income-tax Act :

'The Commissioner may, subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, appoints as may Income-tax officers of Class II Service and as many inspectors of income-tax as may be sanctioned by the Central Government.'

9. It is pointed out that the only person who has the legal authority to make the appointment by way of promotion is the Commissioner and that the Commissioner while doing so is bound only by such rules and orders as the Central Government might have issued or promulgated laying down the conditions of service. The further argument is that the expression 'conditions of service' is quite different from recruitment and that because the two things are quite different, even the control of the Central Government is limited to the imposition of conditions of service in respect of inspectors after they are recruited by the Commissioner and that at the initial stage of recruitment even the Central Government cannot control or regulate the actions of the Commissioner. We have not been able to discover any legal basis for this argument or suggestion except that in article 309 of the Constitution reference is made to regulating the recruitment and the conditions of service of persons appointed. The fact that article 309 has set out the matter in great detail is not, in our opinion, sufficient ground to hold that the Commissioner making an appointment or promotion in exercise of the powers conferred on him by sub-section (2) of section 117 of the Income-tax Act is completely free from any control and that only the appointees can be subjected to control. Indeed, the most important conditions which service rules provide for are those relating to recruitment because it is at that stage that from the point of view of public interest the suitability of a person has to be judged and determined. Public interest requires that only persons suitable for particular posts in public interest requires that only persons suitable for particular pasts in public service are recruited to those posts. After a person is recruited, conditions of service like salary, leave, superannuation, etc., are matters more of personal interest to the public servant than to the public. We cannot, therefore, accept an interpretation that lays greater emphasis upon personal interest of public servants to the exclusion of the protection of public interest of recruiting only suitable persons. In our opinion, the Commissioner acting under sub-section (2) of section 117 is subject to the control of the Central Government both in the matter of recruitment as well as in the matter of imposing conditions of service on the recruits.

10. It is true that there is not statute or a rule under article 309 (at any rate there was none at the relevant period) directly dealing with the manner of recruitment and the Central Board of Revenue, the circulars issued by whom contain detailed instructions regarding the constitution of departmental promotions committees and the procedure and the principles to be observed and applied by the committees in making recommendation for promotion, is an independent statutory body created under the Central Board of Revenue Act of 1924, since replaced by an Act of the same name of the year 1963, and that the powers and duties of the said Board are to be such as are assigned type them by the central Government or by any stature. But, neither of these circumstances means that the Central Government cannot in exercise of its executive powers under article 73 of the Constitution lay down condition of service before the President promulgates any rules under the proviso to article 309 or Parliament enacts any statute in that regard. With reference to the powers of the State Government under article 162 in the absence of rules under the proviso to article 309, there is the direct authority of the Supreme Court in the case of B. N. Nagarajan v. State of Mysore. The fact that the Central Board of Revenue is an independent statutory body also does not exclude the possibility or the propriety of the Central Board of Revenue is an independent statutory body also does not exclude the possibility or the propriety of the Central Government entrusting to it certain powers or authorities in respect of recruitment and control of staff in the departments dealing with revenue including income-tax.

11. That the Central Board of Revenue has been entrusted with almost all duties and functions relating to the collection of income-tax and control of the department of income-tax, is a matter on which no contrary opinion is possible or has been suggested. That the said Board in its working is closely associated with the Ministry of Finance of the Central Government, is also an indisputable fact. It is seen from the papers produced both by the petitioners as well as the respondent-department that the constitutions of the departmental promotions committee is traceable to certain circular instructions issued by the Central Board of Revenue. There is, however, a very early circular dated December 22, 1948, which connected from the Ministry of Finance of the Central Government. The Manual of Office Procedure published by the Central Board of Revenue also contains the information that departmental promotions committees were constituted to deal with promotions to class I and class II service under the administrative control of the Ministry of Finance, Revenue Division, pursuant to a decision of the Government contained in a memorandum, bearing No. F. 371 Admn. (GL) 547, dated 25th January, 1948. The same manual states further that similar departmental promotions committees have been constituted for each officer under the control of the Central Board of Revenue to deal with promotions to selection appointments in clause III service also. What follows from the foregoing is that service personnel in the income-tax department are ultimately subject to the administrative control of the Ministry of Finance or the Revenue Division of the said Ministry, and that the idea of constituting the departmental promotion committees in the income-tax department emanated for the first time not from the Central Board of Revenue but from a Ministry of the Central Government which has direct administrative control of the service personnel of the income-tax department. If so, the inference is perfectly possible and reasonable that the ultimate authority from which administrative instructions for the constitution of such promotion committees emanated was a Ministry of the Central Government which means the Central Government itself functioning through one of its appropriate ministries or departments.

12. The inference receives considerable support from the fact that the rules promulgated under the provision to article 309 relating to recruitment or promotions to the cadre of inspectors in the year 1969 distinctly provide that the promotions to the said cadre should be on the recommendation of the departmental promotions committee.

13. The only argument pressed against the acceptance of this inference is, firstly, that no papers or correspondence leading to the said inference is placed before the court by the department, and further that the circulars issued by the Central Board of Revenue are in some cases described as having been issued in supersession of previous circulars. So far as the first suggestion is concerned, the circumstances stated by us and the functioning of the committee for over two decades now are, in our opinion, sufficiently strong basis for the inference. As to the latter, it might perhaps be said that the Board of Revenue was acting as if the exclusive power of issuing instructions, withdrawing them or modifying them, vested only in the Board and not in the Central Government or to the exclusion of the Central Government. We do not think that such should be the only inference possible from the use of the words 'in supersession of previous circulars'. It anything, the use of such expression, taken along with the other circumstances mentioned by us, should suggest that the Board of Revenue must have been actually entrusted with the power of issuing such circulars containing instructions relevant to the making of promotions.

14. We do not think, therefore, that the petitioner can successfully contend that the constitution or functioning of the departmental promotions committees is so completely devoid of all legal authority as to be regarded as bringing about promotions which are totally void. Quite apart from what we have already stated as furnishing a legal basis for their constitutions, the procedure of the promoting authority receiving assistance of a committee of officers in furnishing impersonal opinions as to the suitability or otherwise of persons for promotions cannot be regarded as, to any extent, militating against the exercise of the said power by any authority appointed by the statute. We do not consider that there is any strength in the arguments and suggestions made to the effect that the functioning of the committees is arbitrary and uncontrolled by any gaudiness or principles, because a mere reading of the circulars and the record of minutes leaves no room for doubt that all the well-established principles governing the selection of persons for promotion in Government service are carefully collected and issued and a clear attempt is made to eliminate the operation of individual idiosyncrasies which may affect one way or the other the official career of any Government servant in the department, by affording him the protection of an examination of his case by three or four independent persons.

15. We see, therefore, no reason to interfere with any one of the promotions impugned in these four writ petitions.

16. We might record before closing this order that all the petitioners have since been promoted as income-tax inspectors on the recommendation of departmental promotions committees functioning in the same way under the same circulars mentioned above.

17. All the writ petitions are, therefore, dismissed, but without costs.


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