CAT Upholds CSE Candidate's EWS Claim, Quashes DoPT Rejection Over Rectified ITR

New Delhi: The Central Administrative Tribunal (CAT), Principal Bench, in a significant ruling, has directed the Department of Personnel and Training (DoPT) to allocate service to Shashi Shekhar , a Civil Services Examination (CSE) 2022 aspirant, under the Economically Weaker Section (EWS) category. The Tribunal, comprising Hon’ble Mr. R. N. Singh (Member J) and Hon’ble Mr. Rajinder Kashyap (Member A), quashed the DoPT's order dated 23.10.2023, which had denied Shekhar 's EWS claim due to an alleged income discrepancy.

The judgment, pronounced on 30.05.2025, emphasized that a bona fide error in an Income Tax Return (ITR), subsequently rectified within the permissible time and accepted by the Income Tax Department, cannot be grounds to deny EWS benefits if the candidate possesses a valid Income and Asset Certificate (I&AC) submitted before the cut-off date and meets all other eligibility criteria.

Case Background: A Meritorious Candidate's Ordeal

Shashi Shekhar successfully cleared the CSE-2022, securing the 240th rank under the EWS category. He had applied for the examination possessing a valid EWS certificate dated 25.10.2021, relevant for the financial year 2020-21, and submitted it before the stipulated cut-off date of 22.02.2022.

However, his name was missing from the service allocation list. The DoPT, upon verifying his income details, found that his family's gross annual income (₹9,78,425) exceeded the EWS threshold of ₹8 lakh for FY 2020-21. This calculation was based on his original ITR, which showed his income as ₹7,48,425, and his father's declared income of ₹2,30,000.

Shekhar contended that his original ITR inadvertently included a loan amount of ₹2,05,000 received from his employer, Ajay Vision Education Private Ltd. , as income. He rectified this error by filing an updated ITR, which showed his actual income to be ₹5,43,425, bringing the family income well within the EWS limit. Despite representations and supporting documents, including a certificate from the Income Tax Department confirming his revised income, the DoPT rejected his claim, leading to the present application before the CAT.

Arguments Presented

Applicant's Submissions ( Shashi Shekhar ): Mr. Sanjay Kumar Shandilya, counsel for the applicant, argued: * The applicant's disclosures were truthful, and the family income was below the ₹8 lakh EWS threshold. * The discrepancy in the original ITR was a bona fide error by his employer, who wrongly included a loan as income and deducted TDS on it. * The DoPT's rejection order dated 23.10.2023 was arbitrary, non-speaking, and violated principles of natural justice. * A valid EWS certificate was submitted within the prescribed time. * The updated ITR, filed within the statutory timeframe and accepted by the Income Tax Department, along with a subsequent certificate from the IT Department (01.04.2024) and confirmations from his employer, validated his EWS eligibility. * The DoPT itself initiated inquiries into the matter, implying the issue was open to verification. * The respondent's actions threatened to derail the career of a meritorious candidate over a rectifiable error.

Respondent's Contentions (Department of Personnel and Training): Mr. Brijendra Chahar, Sr. Adv. (ASG), representing the DoPT, submitted: * Based on the applicant's original ITR (sourced from CBDT) for FY 2020-21 and his father's declared income, the family income was ₹9,78,425, exceeding the EWS limit. * The applicant was therefore not eligible for EWS reservation. Since he was not recommended under General Merit, he could not be allocated any service. * Service allocation is a time-bound process. * The revised ITR was an "afterthought," relying on previous Tribunal decisions like Abhishek Khandelwal and Ashutosh Sani .

Tribunal's Analysis and Reasoning

The Tribunal meticulously examined the facts and legal provisions. Key observations from the judgment include:

Loan is Not Income: The CAT reiterated the established principle that a loan is a liability, not income, unless waived. The applicant's pay slips showed loan repayment.

Statutory Right to Revise ITR: Filing a revised ITR within the prescribed time is a legal right. The Income Tax Department had accepted Shekhar 's updated ITR.

Employer and IT Department Corroboration: The applicant's employer, M/s Ajayvision Education Private Ltd., confirmed the ₹2,05,000 loan, a fact verified by DoPT itself. A certificate from the Income Tax Office dated 01.04.2024 also certified the applicant's corrected income for FY 2020-21 as ₹5,43,425 (salary) and ₹7,000 (other sources).

Validity of EWS Certificate: The EWS certificate dated 25.10.2021 was undisputed and submitted before the cut-off. The Tribunal noted, "no contrary income documents have been placed on record by the respondent to demonstrate suppression or misrepresentation on the part of the applicant."

No Rule Barring Updated ITR: The Tribunal found no rule in the UPSC Notification, CSE Rules, or DoPT OMs that mandates ITR submission by the initial cut-off date or deems a revised ITR a violation. ITRs are typically required for DAF-II, post-Mains.

DoPT's Own Inquiries: The Tribunal highlighted that DoPT initiated two inquiries into the applicant’s claims. "The very act of initiating these inquiries contradicts and undermines the Respondent’s own contention that the updated Income Tax Return (ITR) should not be permitted." These inquiries yielded no adverse findings against the applicant.

Updated ITR Not an Afterthought: The Tribunal found no mala fide intent. "The discrepancy of income in the ITRs, which pertained to a loan amount of ₹ 2.05 lakh, was merely an inadvertent error and not a deliberate misrepresentation. This error was rectified lawfully... thereby further reinforcing the bona fide nature of the applicant’s actions."

Distinction from Precedents Cited by Respondent: The Tribunal carefully distinguished the facts of Shekhar 's case from those relied upon by the DoPT ( Divya Vs. UoI, Parul Yadav Vs. UoI, Aashima Goyal Vs. UoI, Abhishek Khandelwal Vs. DoPT, Ashutosh Sani Vs. DoPT ), noting differences in possession of valid certificates by cut-off dates, nature of discrepancies, and substantiation of claims. For instance, in Divya 's case, the applicant lacked the correct EWS certificate by the deadline, unlike Shekhar . In Aashima Goyal , the revised ITR showed a drastic, unsubstantiated income reduction.

Primacy of Substantive Justice: The Tribunal underscored, "Justice must be upheld as the paramount value... The pious principle of substantive justice needs to be flow as unhindered stream... Therefore, the objective of the constitutional amendment cannot be allowed to be defeated by technical / procedural formalities."

The Tribunal rejected the DoPT's argument that the selection process was time-bound and closed, noting instances where other candidates received allocations upon review. It held that the applicant was entitled to equal treatment for a bona fide mistake.

Final Decision and Directions

Concluding that Shashi Shekhar met the EWS criteria based on a valid I&AC for FY 2020-21 submitted on time, and that his updated ITR was a lawful rectification of a bona fide error without mala fide intent, the Tribunal allowed the Original Application.

The CAT issued the following directions:

1. The impugned DoPT order dated 23.10.2023 is quashed and set aside.

2. The DoPT is directed to allocate service to the applicant in accordance with his rank (240) and EWS category, with seniority in consonance with officers selected from CSE-2022, within six weeks.

3. The DoPT shall take action to depute the applicant for training within the said period.

The Tribunal specified that this order, given the "peculiar facts and circumstances of the case," should "not be treated as a precedent." There was no order as to costs.