2022 (12) TMI 849 - HC - Income Tax

Guilty u/s 12 of Contempt of Courts Act 1971 - Deputy Commissioner of Income Tax - deliberate and willful disobedience - Power to issue notice u/s 124 - DCIT jurisdiction to assess the petitioner at Lucknow - petitioner - applicant had been filing his returns at New Delhi - as argued local address was inserted deliberately to create jurisdiction which in fact legally was not vested with the opposite party No.2. - contempt application under Section 12 of the Contempt of Courts Act 1971 has been filed alleging willful and deliberate disobedience of judgment and order 2015 (3) TMI 1229 - ALLAHABAD HIGH COURT passed by a Division Bench of this Court in Writ Petition - Whether changing the principal place of profession or residential address in PAN does not automatically change the jurisdiction of the AO - HELD THAT - AO in spite of direction issued for consequential action permitted to continue the outstanding amount for a period of seven months on the web portal and when this Court made query in the present contempt application in regard to consequential benefits granted to the applicant - petitioner only then it was deleted from the web portal. This fact has been admitted by the opposite party in his affidavit dated 05.12.2022. This clearly amounts violation of the judgment and order passed by the division bench of this Court on 31.03.2015. Civil contempt is punishable with imprisonment as well as fine. In a given case the court may also penalise the party in contempt by ordering him to pay the costs of the application and a fine can also be imposed upon the contemnor. Disobedience of this Court s order strikes at the very root of the rule of law on which the judicial system rests. The rule of law is the foundation of a democratic society. Judiciary is the guardian of the rule of law. Hence it is not only the third pillar but also the central pillar of the democratic State. On perusal of judgment and order dated 31.03.2015 it is crystal clear that notice issued by the Assessing Officer was quashed on the ground of jurisdiction as well as consequential orders were also directed to be set-aside. Meaning thereby the Assessing Officer has to take care that the entry existing on the web portal was to be deleted immediately after passing of the judgment and order dated 31.03.2015 but deliberately and intentionally the outstanding of notice of assessment year 2011- 12 became operative on the web portal till seven months which ruined the reputation of the applicant and this act of the Income Tax authority was in deliberate and willful disobedience of the judgment and order dated 31.03.2015. Here in the present case as per own admission of Sri Manish Mishra learned counsel for opposite party the outstanding amount was deleted from the web portal after seven months which amounts deliberate and willful disobedience of the judgment and order dated 31.03.2015 for which the opposite party is liable to be punished with imprisonment as well as fine. Here in the present case this Court has set aside the notice dated 11.09.2013 on the ground of jurisdiction with further direction that as the notice has already been quashed consequential order if any are also quashed. Meaning thereby the outstanding showing on the web portal against the applicant was to be deleted immediately after the judgment but the authorities have permitted to continue the outstanding amount on the web portal for a period of seven months which clearly violates the judgment and order dated 31.03.2015 and this act and action of the opposite party is deliberate in nature for which he is liable to be punished. The action of the opposite party is not only contemptuous but is also malicious. He took care with the money of the applicant in spite of clear direction of this Court and there is no justifiable reason for the said action. If the action of Mr. Harish Gidwani Deputy Commissioner of Income Tax Range -2 Lucknow is considered in the background by the allegations made against him it was his purposeful act to harass the applicant in spite of order of the writ Court. Unnecessarily mens rea is not required to be proved in a case of contempt but in the present case the violation is willful deliberate and coupled with intention and motive to harass the applicant. This Court finds the opposite party - Mr. Harish Gidwani Deputy Commissioner of Income Tax Range-2 Lucknow to be guilty under Section 12 of Contempt of Courts Act 1971. A fine of Rs.25, 000/- along with simple imprisonment for a period of one week is awarded to the contemnor - opposite parity i.e. Mr. Harish Gidwani Deputy Commissioner of Income Tax Range-2 Lucknow. In case of default he would suffer one day s further simple imprisonment. The contemnor - opposite parity Mr. Harish Gidwani Deputy Commissioner of Income Tax Range-2 Lucknow will surrender before the Senior Registrar of this Court at 03.00 p.m. on 16.12.2022 who will send him jail to serve out the sentence.

Summary

Issues Involved:
1. Jurisdictional error in the issuance of notice under Section 143(2) of the Income Tax Act, 1961.
2. Alleged willful and deliberate disobedience of the court's order quashing the notice.
3. Consequential actions required following the quashing of the notice.
4. Contempt of court proceedings and punishment.

Detailed Analysis:

1. Jurisdictional Error in Issuance of Notice:
The applicant challenged the notice dated 11.09.2013 issued by the Deputy Commissioner of Income Tax, Lucknow, under Section 143(2) of the Income Tax Act, 1961, for the assessment year 2012-13. The applicant argued that the notice was issued beyond the jurisdiction conferred upon the respondent, as the petitioner should be assessed in New Delhi where the returns were filed.

2. Alleged Willful and Deliberate Disobedience of Court's Order:
The applicant filed a contempt application under Section 12 of the Contempt of Courts Act, 1971, alleging non-compliance with the court's order dated 31.03.2015, which quashed the notice on jurisdictional grounds. The applicant contended that despite the court's order, the opposite party continued to act in defiance by issuing further notices and maintaining the outstanding amount on the web portal for seven months.

3. Consequential Actions Required Following Quashing of Notice:
The court's order dated 31.03.2015 not only quashed the notice but also directed that all consequential orders be set aside. This included the deletion of the outstanding amount from the web portal. The opposite party delayed this action, which the court found to be a clear violation of its directive.

4. Contempt of Court Proceedings and Punishment:
The court considered the submissions and evidence presented by both parties. The applicant's counsel cited several judgments to support the claim of willful disobedience, emphasizing the importance of compliance with court orders to uphold the rule of law. The opposite party's counsel argued that there was no willful disobedience and cited judgments to highlight the cautious exercise of contempt powers.

The court found that the opposite party's actions amounted to deliberate and willful disobedience of its order. The outstanding amount was not deleted from the web portal for seven months, which the court considered a malicious act intended to harass the applicant. The court concluded that the opposite party was guilty of contempt under Section 12 of the Contempt of Courts Act, 1971.

Judgment:
The court imposed a fine of Rs. 25,000 and sentenced the contemnor, the Deputy Commissioner of Income Tax, Range-2, Lucknow, to one week of simple imprisonment. The contemnor was directed to surrender before the Senior Registrar of the court to serve the sentence, with a report on compliance to be submitted by the Senior Registrar.

Post-Judgment Order:
Upon request from the contemnor's counsel, the court extended the time for surrender to 22.12.2022, with the same compliance requirements.

Conclusion:
The court's judgment emphasized the necessity of adhering to judicial orders and the severe consequences of contemptuous actions, reinforcing the rule of law and the authority of the judiciary.