By TIOL News Service

NEW DELHI, SEPT 07, 2016: THE issue is - Whether DPC held as per the extant IRS Rules, 1988 and also DoP&T OM, just before the cabinet approval of Cadre Review stands valid and Review DPC to demote the promoted officers as per new restructuring plan is legally not sustainable. YES is the verdict.

Facts of the case

The petitioners are the members of Indian Revenue Service of 1981 Batch and presently posted as Chief Commissioners of Income Tax or in the equivalent Grade of Director General of Income Tax. The petitioners were promoted from the post of Commissioner of Income Tax/Director of Income Tax to the post of Chief Commissioner of Income Tax/Director General of Income Tax for filling up 35 posts pertaining to the vacancy year 2013-2014, based on a delayed DPC held on 17.9.2013. Thereafter the respondents issued order dated 28.8.2014 directing holding of review DPC with respect to the original DPC held on 17.9.2013. The respondents also issued order dated 20.1.2015 for holding a review DPC to consider the officers who stood promoted as Chief Commissioners to the newly created lower post of Principal Commissioners of Income Tax. The petitioners thereafter filed their individual representations. Since the petitioners did not receive any response from the respondents, they moved the Tribunal.

As per the respondents, the reasons for passing the orders dated 28.8.2014 and 20.1.2015 were on account of restructuring of the Cadre which took place on 23.5.2013, as per which the petitioners could only be promoted to the post of Principal Commissioner of Income Tax in the pay grade of HAG. This restructuring of the cadre could not be brought to the notice of DPC as also ACC.

On 28.8.2015, the senior counsel for petitioners, had contended before the HC that the prime ground of challenge by the petitioners before the Tribunal was that the effect of the review DPC would be that the petitioners, who already stood promoted as Chief Commissioners pursuant to the DPC held on 17.9.2013 would be demoted and relegated to the newly created posts, known as Principal Commissioners of Income Tax (PCIT). It was further submitted that the post of Principal Commissioners of Income Tax (PCIT) had been created on account of cadre restructuring. It was contended that the stand of the respondent that cadre restructuring could not be brought to the notice of DPC and ACC was disputed on account of the fact that the Revenue Secretary had participated in the DPC and, thus, it could not be said that the respondents were not aware of restructuring which was being carried out by the respondents. Another submission, which was made before the Court, was that all the petitioners were eligible for the post of Chief Commissioners as on 1.1.2013. A right had accrued in their favour on the said date, which was prior to restructuring and prior to framing of Rules, which were framed after the DPC was conducted on 29.4.2015.

The Additional Solicitor General urged the bench that since the DPC was held without taking into consideration the restructuring of the cadre, no right would flow in favour of the petitioners. It was further submitted that the effect of the cadre restructuring was that the next promotion to the post of Chief Commissioner would be Principal Commissioner of Income Tax, a post created by the respondents between the Commissioner and the Chief Commissioner.

The stand of the petitioners was that since the new Rules came into effect post the DPC, the petitioners should not be deprived of the promotion granted to them based on the DPC held on 17.9.2013. It was further the stand of the petitioners that the effect of the cadre restructuring would be that the post of Commissioners was upgraded to the next higher grade, which was introduced as Principal Commissioners of Income Tax with the pay scale of Rs.67,000 – Rs.79,000. The grievance of the petitioners was thus, in case a review DPC was conducted, the petitioners would be relegated back from the post of Chief Commissioners (HAG+) to the Principal Commissioners of Income Tax (PCIT with HAG Scale).

The counsels for the parties handed over in Court the Minutes of the meeting held on 13.1.2016 between the Additional Solicitor General and the counsel appearing for the petitioners to lend clarity to the proposal for settlement

Having considered the terms of settlement, the HC held that,

++ In our view, the ends of justice would be met with the following directions:

i. The DPC held on 17.9.2013 for promotion from Commissioner to Chief Commissioners is in accordance with the extant Indian Revenue Service Rules, 1988, read with relevant DoP&T instructions contained in OM No.2201/5/86-Estt.(D) dated 10.4.1989. Therefore, the said DPC is legally valid and the proposal of the Government to hold a review DPC to demote the petitioners from Chief Commissioner to the new posts of Principal Commissioners is illegal and accordingly quashed;

ii. The petitioners will be treated as promoted to the posts of Chief Commissioners of Income Tax as per the orders dated 16.12.2013, 20.2.2014 and 4.6.2014. However, they will draw pay and allowances in the HAG grade for one year from the date of their respective promotions;

iii. On completion of one year in the HAG grade, they will be placed in the higher HAG plus scale without any fresh DPC but subject to Vigilance clearance.

iv. The residency period for promotion to Principal Chief Commissioner of Income Tax shall be counted from the date on which the petitioners are placed in the HAG plus grade;

v. The respondents will take immediate steps to promote the petitioners to the posts of Principal Chief Commissioner of Income Tax in accordance with extant rules.

(See 2016-TIOL-2032-HC-DEL-SERVICE)