2008 (4) TMI 546 - SC - Income Tax

Challenging the validity of Notifications without disclosing pendency of assessment proceedings/appeals - Held that - Registry is directed to issue show cause notice to Sh. Krishna Chourasia S/o Sh. P.C. Chourasia, residing at A-198, Gujranwala Town, Part-I, Delhi, as to why proceedings for contempt should not be taken against him in view of the aforestated circumstances. It is important to note that in the supporting affidavit the contemnor has specifically stated that the contents of the accompanying civil writ petition are true and correct and no material has been concealed therefrom. Also direct the Registry to forward a copy of this order to the High Court so that in future whenever such writ petitions come before the High Court the Judges should enquire whether any assessment proceedings or appeals therefrom are pending before proceeded further in the matter.

Summary

Issues:
1. Failure to disclose pending assessment proceedings/appeals in a writ petition challenging the validity of a notification.
2. Contempt proceedings for non-disclosure of pending appeal before the High Court.
3. Penalty and fine for misleading statements in the writ petition.
4. Clarification on the necessity of disclosing pending proceedings in matters concerning revenue before the High Court.

Issue 1:
The judgment highlights a case where a writ petition was filed challenging the validity of a notification without disclosing the pendency of assessment proceedings/appeals. The petitioner failed to inform the High Court about the pending appeal before the First Appellate Authority, which the Court viewed seriously due to the significant stakes involved. The Court emphasized the importance of disclosing such information in matters concerning revenue to ensure transparency and fair proceedings.

Issue 2:
The Court directed the Registry to issue a show cause notice to the individual involved, questioning why contempt proceedings should not be initiated against him for not disclosing the pending appeal before the High Court. The Court emphasized the need for full disclosure of relevant facts in writ petitions to avoid misleading the Court and to maintain the integrity of the legal process.

Issue 3:
During subsequent proceedings, the individual involved expressed that there was no intent to mislead the High Court and offered an unconditional apology. The senior counsel representing the individual acknowledged the need for appropriate action for non-compliance with disclosure requirements. As a first chance, the individual was penalized with a fine of Rs. 50,000, which was to be deposited with the Registry within four weeks. The Court accepted the apology on the condition of the fine payment, emphasizing the seriousness of accurate disclosure in legal proceedings.

Issue 4:
The judgment clarifies the necessity of explicitly stating in writ petitions or special leave petitions whether proceedings are pending before departmental authorities. The Court emphasized that both the assessee and the department must disclose the status of statutory remedies invoked, as non-disclosure of such relevant information could lead to the dismissal of the petition. This directive aims to ensure transparency and prevent the suppression of crucial facts in matters concerning revenue, maintaining the integrity of legal proceedings.

In conclusion, the judgment underscores the importance of full disclosure of pending proceedings and statutory remedies in writ petitions challenging revenue-related matters to uphold transparency and fairness in legal proceedings.