Delhi High Court Drops Contempt Charges Against Retired Principal Commissioner of Income Tax
Court Finds No Willful Disobedience in Order Insisting on Payment of 20% Disputed Tax Demand
In a recent judgment delivered by the Delhi High Court, the court dismissed contempt proceedings against Anuradha Misra, the former Principal Commissioner of Income Tax (Central-3), New Delhi. The proceedings were initiated following allegations of willful disobedience of a court order relating to the stay of a tax demand.
The case stemmed from an appeal filed by Dhruva Goel against assessment orders for multiple years, which raised a total tax demand of Rs. 8,09,20,130. Goel had sought a stay of the demand pending appeal, proposing to pay Rs. 50,00,000. However, Misra rejected this offer, directing payment of 20% of the entire demand as per Central Board of Direct Taxes (CBDT) guidelines.
This decision was initially overturned by a division bench of the Delhi High Court, which directed Misra to reconsider the matter. A subsequent order by Misra reiterated the 20% payment requirement, prompting the court to issue a contempt notice, suspecting a mere repetition of the earlier invalidated order without furnishing required reasons.
In her defense, Misra cited adherence to CBDT circulars and the financial soundness of the assessee as grounds for her decision. Despite the court's initial prima facie view of contempt, Justice Vikas Mahajan found that the respondent's actions lacked any bad motive or evil intent, and were guided by policy and the assessee's financial capacity.
The court referenced several statutory provisions and previous judgments to underscore the necessity of proving willful disobedience in contempt cases. The judgment emphasized that for civil contempt, the disobedience must be intentional with a bad purpose, which was not evident in Misra's conduct.
Ultimately, the court concluded that the brief reasoning provided by Misra, while not elaborate, demonstrated due diligence and was aligned with established circulars and financial assessments. Consequently, the contempt petition was dismissed, and the proceedings were dropped, marking a significant decision in judicial discretion and administrative adherence to tax regulations.
Bottom Line:
Contempt of court proceedings - Assessment of whether there was willful disobedience of a court order by a Principal Commissioner of Income Tax in passing an order reiterating a prior order set aside by the court.
Statutory provision(s): Contempt of Courts Act, 1971 - Section 2(b), Income Tax CBDT Circulars - OMs dated 29.02.2016 and 25.08.2017
Court on its own Motion v. Anuradha Misra, (Delhi) : Law Finder Doc Id # 2791017
