Allahabad High Court Holds Deputy Commissioner Of Income Tax Guilty Of Contempt

The Allahabad High Court has held Retired Deputy Commissioner Of Income Tax Range 2 guilty of contempt of Court under Section 12 of the Contempt of Courts Act, 1971 for assuming jurisdiction in respect of the assesee-applicant in respect of a different assessment year when the Writ Court had directed that he has no jurisdiction in respect of the assesee. While directing one-week simple imprisonment along with file of Rs. 25,000/- against the opposite party, Justice Irshad Ali held that “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.” The Court further held that “If the judiciary is to perform its duties and functions effectively and remain true to the spirit with which they are sacredly entrusted to it, the dignity and authority of the Courts have to be respected and protect at all costs. Otherwise, the very corner stone of our constitutional scheme will give way and with it will disappear the rule of law and the civilized life in the society. That is why it is imperative and invariable that Court's orders are to be followed and complied with.” Case Background In the writ petition filed under Article 226 of the Constitution of India, the Court had held that the Assessing Authority had exceeded its jurisdiction by proceeding in the case when the assesee had refused to submit to its jurisdiction. It was noted that the officer, therein, had deliberately crossed the Delhi address of the assesee and written the local address so as to make the assesee amenable to his jurisdiction. Accordingly, the entire proceedings were quashed. Due to alleged willful disobedience of the Assessing Authority at Lucknow, petitioner/ assesee/ applicant filed a contempt application. Counsel for the applicant argued that initial place of business of the assesee was in Lucknow, however, due to harassment by the Income Tax Authorities at Lucknow, he was forced to change the place of business to Delhi. It was stated that the change was intimated to the authorities, and subsequently in all automatically generated notices, the address of the assesee was reflected as New Delhi. It was submitted that despite Court orders that the authority had Lucknow had no jurisdiction to initiate proceedings under the Income Tax Act against the petitioner, the contemnor proceeded to issue notices and manually changed the address of the assesee on such notices from Delhi to Allahabad. Counsel for the contemnor pleaded that there was no violation of the Court order on his part. It was pleaded that he was posted as Deputy Commissioner of Income Tax, Lucknow from 9.10.2014 to 09.06.2016 and thereafter was transferred and had nothing to do with the functioning of that post. It was argued that the judgment of the High Court pertained to the assessment year 2012-13, whereas contempt has been filed for exercise of jurisdiction for A.Y. 2013-14. It was further pleaded that despite giving an opportunity to the assesee to file an application for transfer of jurisdiction, no such application was filed. It was stated that the assesee never raised the issue of jurisdiction before the Assessing Authority. It was stated that the mere change in address in ITR or PAN does not take away the jurisdiction of the competent authority, especially if no order transferring such jurisdiction has been issued by a competent court or the higher Authorities. High Court Verdict Since Mr. Harish Gidwani, Deputy Commissioner of Income Tax, Range-2, Lucknow was prima facie guilty of contempt of court, the Court framed three charges against him: first, despite Court order, why did he proceed with assessment for year 2013-14 when he had no jurisdiction to conduct such proceedings at Lucknow; second, why was local address of the assesee deliberately included so as to vest jurisdiction at Lucknow; and, third, why was the outstanding amount not deleted from the web portal despite specific directions by the Court. The Court observed that the judgment of the Writ Court was not confined to A.Y. 2012-13, which was under challenge before the Court. It was held that the judgment extended to the general exercise of jurisdiction by the Assessing Authority in respect of any assessment year for the assesee. Holding the Opposite Party guilty of contempt, the Court held that “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 dated 31.03.2015 appears to be willful and deliberate.” The Court held that once the notices for A.Y. 2012-13 under the Income Tax Act were...

Allahabad High Court Holds Deputy Commissioner Of Income Tax Guilty Of Contempt

Upasna Agrawal

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