2024 (8) TMI 694 - HC - Income Tax

Disobedience of the order by the Deputy Commissioner of Income Tax (DCIT) - Jurisdictional error in assessing the applicant at Lucknow instead of New Delhi Contempt application has been filed alleging willful and deliberate disobedience of the judgment and order passed by a Division Bench of this Court 2015 (3) TMI 1229 - ALLAHABAD HIGH COURT , whereby notice issued to the petitioner-applicant was quashed on the ground of jurisdictional error and the opposite party was to delete all the outstanding amount from the web portal showing the dues to be paid - judgment had quashed the notice and subsequent proceedings due to jurisdictional errors, directing the deletion of any outstanding amounts from the web portal. Despite this, the opposite party did not comply, leading to the present contempt proceedings. Show cause notice was issued to the opposite party - Mr. Harish Gidwani, DCIT, Range-2, Lucknow that why he should not be tried and punished u/s 12 of the Contempt of Courts Act, 1971 for willful and deliberate disobedience of the order HELD THAT - This Court is of the view that the opposite party is guilty of contempt of the order passed by the writ Court and the opposite party does not have the jurisdiction or authority to interpret the order passed by the Court by putting words which are not contained in the judgment and order appears to be willful and deliberate. It is not in dispute that notice issued to the applicant for the assessment year 2012-13 dated 3.11.2014 was quashed on the ground of jurisdictional 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 operation on the web portal till seven years and 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 previous learned counsel for the opposite party, the outstanding amount was deleted from the web portal after seven months, although it is actually seven years and seven months which amounts deliberate and willful disobedience of the judgment and order dated 31.03.201 for which the opposite party is liable to be punished with imprisonment as well as fine. The Hon ble Supreme Court as well as this Court, on several occasions while considering the willful disobedience of the order, repeatedly held that willful and deliberate contempt must be punished both by the imprisonment and fine as it is absolutely imperative to uphold the dignity and majesty of a court of law. In view of the above, the ratio of judgments relied upon by learned counsel for the opposite party is not applicable to the present facts and circumstances of the case as in all the decisions a definite finding has been recorded that in case the commission of contempt is willful and deliberate, the contemnor must be punished to uphold the dignity and majesty of a court of law. Civil contempt is punishable with imprisonment as well as fine. In a given case, the court may also penalise the party in contempt by order him to pay the costs of the application and a fine can also be imposed upon the contemnor. Thus, this Court finds the charges framed vide order 2023 (11) TMI 240 - ALLAHABAD HIGH COURT to be proved against the opposite party. This Court is also of the opinion that 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 (now retired) 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. For the reasons given above, this Court finds the opposite party- Mr. Harish Gidwani, Deputy Commissioner of Income Tax, Range-2, Lucknow (now retired) to be guilty u/s 12 of the Contempt of Courts Act, 1971. On these facts, fine only would not meet the ends of justice because Mr. Harish Gidwani, Deputy Commissioner of Income Tax, Range-2, Lucknow (now retired) was a senior officer, who was the custodian of assessing of the applicant and had committed a grossly reprehensible act and in case he is not punished, it would send down a wrong signal to other officials of Income Tax Department that even such unbusiness like conduct invites only a warning or fine, as Courts are flooded with matters, where orders are passed. Accordingly, a fine of Rs. 25,000/- along with simple imprisonment for a period of one week is awarded to the contemnor-Mr. Harish Gidwani, Deputy Commissioner of Income Tax, Range-2, Lucknow (now retired). In case of default, he would suffer one day s further simple imprisonment. The contemnor-opposite party (Mr. Harish Gidwani, Deputy Commissioner of Income Tax, Range-2, Lucknow (now retired)) will surrender before the Senior Registrar of this Court 3.30p.m. on 9.8.2024 who will send him jail to serve out the sentence. The Senior Registrar of this Court is directed to submit a report by 12.8.2024 to this Court in regard to compliance of the order.

Summary

Issues Involved:
1. Willful and deliberate disobedience of the judgment and order dated 31.03.2015.
2. Jurisdictional error in assessing the applicant at Lucknow instead of New Delhi.
3. Non-deletion of the outstanding amount from the income tax web portal.

Detailed Analysis:

Issue 1: Willful and Deliberate Disobedience of Judgment and Order Dated 31.03.2015
The contempt application was filed under Section 12 of the Contempt of Courts Act, 1971, alleging willful and deliberate disobedience of the judgment and order dated 31.03.2015 by a Division Bench of the High Court in Writ Petition No.9525 (MB) of 2013. The judgment had quashed the notice dated 11.09.2013 and subsequent proceedings due to jurisdictional errors, directing the deletion of any outstanding amounts from the web portal. Despite this, the opposite party did not comply, leading to the present contempt proceedings.

Issue 2: Jurisdictional Error in Assessing the Applicant at Lucknow
The judgment dated 31.03.2015 had clearly stated that the tax authority at Lucknow did not have jurisdiction to assess the applicant, who should be assessed by the authority at New Delhi. Despite this, the Deputy Commissioner of Income Tax, Range-II, Lucknow, continued to proceed with assessments for subsequent years, including issuing notices for manual scrutiny for the assessment years 2013-14 and 2012-13, which were outside his jurisdiction. The court noted that the opposite party should have referred the jurisdictional question to the Chief Commissioner or Commissioner under Section 124(2) of the Income Tax Act, 1961.

Issue 3: Non-Deletion of Outstanding Amount from the Income Tax Web Portal
The outstanding demand generated from the assessment order for the year 2012-13 remained on the income tax web portal for about seven years and seven months, causing significant reputational harm to the applicant. This was despite the court's order to quash the notice and consequential orders. The opposite party's failure to remove the demand from the portal was seen as a willful and deliberate disobedience of the court's order.

Court's Findings:
1. Willful Disobedience: The court found that the opposite party acted in contempt by not complying with the judgment dated 31.03.2015. The judgment was clear and unambiguous, and the opposite party's actions were seen as willful and deliberate disobedience.

2. Jurisdictional Overreach: The court held that the opposite party exceeded his jurisdiction by continuing to assess the applicant at Lucknow despite the clear directive that the applicant should be assessed at New Delhi. The court emphasized that the judgment was not confined to a particular assessment year but laid down the jurisdictional authority in general terms.

3. Non-Deletion of Demand: The court noted that the demand should have been removed from the web portal immediately after the judgment. The prolonged presence of the demand on the portal was seen as a deliberate and willful act of disobedience, causing harm to the applicant's reputation.

Judgment:
The court found the opposite party guilty of contempt under Section 12 of the Contempt of Courts Act, 1971. The opposite party was sentenced to a fine of Rs. 25,000/- and simple imprisonment for one week. The court directed the contemnor to surrender before the Senior Registrar of the court to serve the sentence. The court rejected the request for an extension of the judgment's effect and operation.

Conclusion:
The court emphasized the importance of upholding the dignity and authority of judicial orders, stating that disobedience strikes at the very root of the rule of law. The judgment serves as a stern reminder to public officials about the consequences of willful disobedience of court orders.