1996 (9) TMI 83 - HC - Income Tax

Summary

Issues:
1. Contempt proceedings against the bank manager for refusal to release awarded amount.
2. Interpretation of section 269T of the Income-tax Act and its applicability.
3. Examination of civil and criminal contempt under the Contempt of Courts Act, 1971.

Analysis:
The High Court of Himachal Pradesh initiated contempt proceedings against a bank manager for not releasing a sum of Rs. 25,000 as directed in a court order. The court converted the civil contempt into criminal contempt proceedings and called for further affidavits and witness testimonies. The bank manager cited section 269T of the Income-tax Act, which mandates specific modes of payment for amounts exceeding Rs. 20,000, and a circular from the Reserve Bank of India as reasons for not releasing the funds in the specified manner. The respondent filed affidavits asserting compliance with the law and lack of wilful disobedience.

In the context of civil contempt, the court noted that the original order did not specify the mode of payment for the awarded amount. The respondent's reliance on section 269T and the RBI circular was deemed reasonable in the absence of explicit instructions from the court. The court emphasized that if the payment mode had been specified as cash, the respondent would have been obligated to comply accordingly. The respondent's argument regarding the interpretation of section 269T was acknowledged, but the court did not delve into a detailed analysis of the provision.

Regarding criminal contempt, the court analyzed the definitions under the Contempt of Courts Act, 1971. It was observed that the respondent's actions did not fall under the clauses pertaining to scandalizing the court or obstructing judicial proceedings. The court concluded that the respondent's conduct did not amount to contempt as he had acted in good faith based on legal provisions and regulatory directives. The court accepted the respondent's unqualified apology and discharged him from the contempt proceedings.

In conclusion, the court appreciated the assistance provided by learned counsels in resolving the matter in accordance with the law. The judgment highlighted the importance of clarity in court orders to avoid ambiguity in compliance and underscored the significance of acting in good faith within the bounds of relevant legal provisions.