In a significant development on November 18, 2024, the Supreme Court addressed a miscellaneous application filed by NewsClick, seeking compliance with its earlier order dated August 9, 2024. The bench of Justices BV Nagarathna and Nongmeikapam Kotiswar Singh directed ICICI Bank, Saket, New Delhi, to immediately comply with the de-freezing of the petitioner’s bank accounts, as per the Supreme Court’s directive, and deprecated the bank’s reliance on an earlier communication from the Deputy Commissioner of Income Tax dated December 15, 2023.
Background
The case arose after NewsClick challenged income tax recovery proceedings initiated against it despite the pendency of an appeal before the Income Tax Appellate Tribunal (ITAT).
Chronology of Events:
- Assessment and Demand: On December 30, 2022, the Income Tax Department issued an assessment order, followed by a demand notice against NewsClick.
- Tribunal Proceedings: The ITAT refused to stay the recovery.
- Delhi High Court Judgment: NewsClick’s writ petition challenging the ITAT order was dismissed, with the High Court questioning the financial integrity of the news portal.
- Supreme Court Stay (August 9, 2024): The Supreme Court stayed further recovery of the income tax demand pending disposal of NewsClick’s appeal before the ITAT, noting that 30% of the demand had already been recovered.
However, despite the Supreme Court’s order, ICICI Bank did not de-freeze NewsClick’s bank accounts, citing the earlier December 15, 2023, communication from the Deputy Commissioner of Income Tax.
Today’s Proceedings
Non-Compliance by ICICI Bank
Senior Advocate Devadatt Kamat, appearing for NewsClick, informed the court that the bank had failed to comply with the August 9 order. The bench expressed strong disapproval of ICICI Bank’s actions, stating that a Supreme Court order must take precedence over any earlier communication from the Income Tax Department.
Justice Nagarathna remarked:
“The bank does not act on the Supreme Court’s order but on the Union’s letter? This is unacceptable.”
Response by ICICI Bank
Advocate Sameer Parekh, representing ICICI Bank, stated that he was unaware of the matter but assured the court that the bank would act as per the petitioner’s communication.
Court’s Directive
The court reiterated its earlier order, stating:
“We deprecate the omission on the part of ICICI Bank in not complying with the order of this Court dated August 9, 2024, and instead seeking to comply with the communication dated December 15, 2023. It is needless to observe that this Court’s order is subsequent and supersedes any such communication.”
Further, the court directed ICICI Bank to comply with the August 9 order in “both letter and spirit” and warned against any recovery attempts from other accounts of the petitioner.
Justice Nagarathna added:
“No recovery in respect of this. If they cannot understand our simple English, we cannot help them.”
Significance of the Case
This judgment underscores the judiciary’s primacy in legal matters and sends a strong message to financial institutions to prioritize compliance with judicial orders over administrative communications.
Key Takeaways:
- Judicial Supremacy: The ruling reaffirms that judicial directives override prior administrative instructions.
- Accountability of Banks: The decision holds financial institutions accountable for complying with court orders without delay.
- Clarity on Recovery: The court’s oral remarks clarify that no recovery actions can proceed while the stay on the income tax demand remains in effect.
Case Details
Case Name: PPK NewsClick Studio Pvt. Ltd. v. Deputy Commissioner of Income Tax; Diary No.: 48875-2024
Bench: Justices BV Nagarathna and Nongmeikapam Kotiswar Singh
The matter exemplifies the court’s commitment to ensuring judicial orders are respected and emphasizes the importance of procedural adherence by all stakeholders involved.
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