Disciplinary action against a quasi-judicial officer for an erroneous order is only permissible upon proof of mala fide intent, corruption, or gross negligence. A mere error of judgment or the adoption of a plausible legal view does not constitute misconduct.

JUDGMENT :

SANDEEP SHAH, J.

1. The Union of India has challenged the order dated 21.09.2017 passed by the Central Administrative Tribunal, Jodhpur allowing the OA No. 556/2011 filed by respondent no.1 herein, whereby the charge-sheet dated 27.10.2010 as well as the penalty order dated 10.12.2010 issued against him were quashed and set aside.

2. The dispute relates to the disciplinary proceedings initiated against the respondent no.1, who at the relevant point of time was the Assessing Officer and had passed the assessment order dated 24.12.2009 in respect of M/s Kwal Pro Exports for assessment year 2007-08, granting exemption under Section 10B of the Income Tax Act, 1961 (hereinafter referred as ‘IT Act’). The disciplinary proceedings culminated into the penalty order dated 10.12.2010, imposing minor penalty of reduction of one stage in the time scale of pay for a period of three years w.e.f. 01.01.2011. Aggrieved by the said penalty order dated 10.12.2010, the respondent no.1 approached the learned Central Administrative Tribunal, Jodhpur (hereinafter referred as ‘Tribunal’) by way of filing OA No. 556/2011.

FACTUAL MATRIX

3. Brief facts of the case are that the respondent no.1 was Income Tax Officer in the Office of Income Tax-I, Paota C-Road, Jodhpur and he being the Assessing Officer made assessment of assessee (M/s Kwal Pro Exports) under Section 143(3) of IT Act and has allowed the claim under Section 10B of the IT Act for the assessment year 2007-08. The assesse was a firm and claimed itself to be manufacturer and exporter of the handicraft items. On earlier occasion, the firm’s claim for deduction under Section 10B of IT Act was rejected for the AY 2001-02. Later/ the CIT-1 re- opened the said assessment for 2001-02 under section 263 of the IT Act, which was upheld by the learned Income Tax Appellate Tribunal, Jodhpur (hereinafter referred as ‘ITAT’). The Income Tax department has challenged the said order by way of filing appeal before this court. For the subsequent AY also i.e. 2002-03 to 2006-07, the claim was consistently rejected by the tax department, however, the learned ITAT vide its common order dated 29.05.2009 decided that the assessee firm has undertaken business activity amounting to manufacture or production of articles and is eligible for exemption under Section 10B of the IT Act. The department filed appeal under Section 260A of the IT Act against the order dated 29.05.2009, before this Ho’ble Court, which are stated to be pending adjudication and there is no interim order passed in them.

3.1 Thereafter, for the assessment year 2007-08, the respondent no.1 has allowed the claim of assessee under Section 10B of the IT Act, citing the learned ITAT’s order dated 29.05.2009 and the judgment passed by Hon’ble Supreme Court in case of Income Tax Officer, Udaipur vs. Arihant Tiles and Marbles Pvt. Ltd. /b>., 2010 (2) SCC 699.

3.2 While examining the aforesaid order passed by respondent no.1, the petitioner no.3 vide letter dated 09.02.2010 directed the ITO Ward-1(2) to move proposal under Section 263 of the IT Act. The ITO Ward-1(2) in his letter while examining the matter has also reached to a conclusion that remedial action under Section 263 of the IT Act is necessary and accordingly communicated the same to the CIT vide its letter dated 11.02.2010.

3.3 The petitioner no.3 vide letter dated 08.09.2010 while forwarding the copy of the letter dated 06.09.2010 to the respondent no.1 asked him to file his reply. The respondent no.1 submitted his repl