High Court jails Deputy Commissioner of Income Tax in contempt case to send down a correct signal to Income Tax Department
ABCAUS Case Law Citation
ABCAUS 3628 (2023) (01) HC
Important Case Laws relied upon:
Sebastian M. Hongray Vs. Union of India; (1984) 3 SCC 82.
T.N. Godavarman Thirumulpad (102) through the Amicus Curiae Vs. Ashok Khot & another (2006) 5 SCC 1
Sudhir Vasudeva, Chairman & MD, ONGC & Ors. Vs. M. George Ravishekaran & Ors.
Patel Rajnikant Dhulabhai and another Vs. Patel Chandrakant Dhulabhai and others; (2008) 14 SCC 561
Senthur and Another Vs. M. Vijayakumar, IAS, Secretary, Tamil Nadu Public Service Commission and Another
Badri Vishal Pandey and Ors. Vs. Rajesh Mittal and Ors. 2019 Law Suit (SC)
The petitioner had filed his returns at Lucknow upto the Assessment Years 2011-12 as his place of principal business at Lucknow. From the Assessment Year 2012-13, the petitioner shifted his place of business at New Delhi and accordingly filed his income-tax return at Delhi.
In the instant case the Deputy Commissioner of Income Tax Lucknow issued a notice under Section 143 (2) of Income Tax Act, 1961 (the Act) to the Petitioner for the AY 2012-13. The Petitioner challenged the said notice before the Hon’ble Allahabad High Court.
The Hon’ble High Court found that the local address of the assessee was inserted deliberately to create jurisdiction of the DCIT which legally was not vested. The Hon’ble High Court held the entire proceedings ab initio illegal, without jurisdiction and in violation of Section 143 (1) (a) of the Income-tax Act. Accordingly, the said notice and all consequential orders were quashed.
However, the said DCIT at Lucknow despite the order of the Hon’ble High Court, again issued another notice in respect of assessment year 2013-14 threatening to make ex-parte assessment.
This left the Petitioner assessee no option but to file a contempt application before the Hon’ble High Court alleging willful and deliberate disobedience of judgment passed by the Division Bench of Hon’ble High Court for AY 2012-13.
The case of the DCIT was that hat the jurisdiction of Assessing Officer cannot be changed only by change of address of assessee. In case there is a change in principal place of business, the assesee can move an application under Section 127 to the competent authority to transfer any case from one assessing officer to another, however, the petitioner has not moved any such application for transfer of his case to New Delhi.
It was further submitted by the DCIT that he had not proceeded against the petitioner in any manner for the assessment year 2012-13 as per mandate of judgment and order of the Hon’ble High Court and the notices issued u/s 143(2) for AY 2013-14 are not subject matter of the aforesaid writ petition.
It was also the submission that filing of online return can be made from any corner of the entire country and a change of address in the PAN or even the return filed online does not change the jurisdiction of Assessing Officer automatically from the PAN database and therefore, the DCIT Lucknow had the jurisdiction to assess the applicant – petitioner even if he had filed his return at Delhi address.
The Hon’ble High Court noted that as admitted, pursuant to the order passed for AY 2012-13, the DCIT was to delete all the outstanding amount from the web portal showing the dues to be paid. However, the said Assessing Officer 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 deleted it from the web portal only when a query was put in current proceedings.
The Hon’ble High Court opined that this conduct clearly amounted violation of the judgment and order passed by the division bench of the High Court for which for the AO was liable to be punished with imprisonment as well as fine.
The Hon’ble High Court observed that the action of DCIT when 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.
The Hon’ble High Court held DCIT guilty under Section 12 of Contempt of Courts Act, 1971. Further the Hon’ble Court opined that fine only would not meet the ends of justice because the DCIT was a senior officer, who is the custodian of assessing of the applicant and has 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.
Accordingly, the Court imposed a fine of Rs.25,000/- along with simple imprisonment for a period of one week to the DCIT with additional one day’s further simple imprisonment in case of default.
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