Supreme Court criticizes ICICI Bank for not disclosing Newsclick’s bank accounts despite continuing tax recovery steps

By order dated August 9, the court dismissed a plea filed by NewsClick for a stay of the income tax application and directed that, pending disposal of the appeal filed before the Income Tax Appellate Tribunal (ITAT), a stay of further recovery of an outstanding amount. This order took into account the fact that about 30 percent of the demand has been recovered.

The division bank of Justices BV Nagarathna and Nongmeikapam Kotiswar Singh passed the order in an SLP filed by Newsclick against the Delhi High Court order rejecting income tax deferment. On July 8, the court published a notice in the SLP.

To give a brief background, the news portal had alleged that the respondent’s tax authorities, based on orders passed in February and November 2023, had arbitrarily rejected his application for stay of claim during the pendency of his appeal to the Commissioner of Income Tax (Appeals) against the assessment notice dated December 30, 2022. These orders further directed her to pay 20% of the demand before filing another application for stay of the demand during the pendency of the appeal before the Commissioner of Income Tax (Appeals).

Following this, the applicant approached the income tax court. The Tribunal had upheld the findings of the AO and refused to stay the income tax demand. Against this, a writ petition was filed in the Delhi High Court. However, this was rejected because the Court saw no reason to interfere with the decision of the Court of Appeal. Challenging this order, a special leave petition was immediately filed by NewsClick.

It may also be mentioned that the Delhi High Court had earlier observed that Newsclick’s plea for financial stringency based on its balance sheet did not inspire confidence. The Court found that the accounts of the news portal were not properly maintained, according to the assessing officer. An SLP was also filed against this order but it was withdrawn with liberty to approach the Income Tax Appellate Tribunal.

Today, when the bench was served notice that its order had not been complied with, Justice Nagarathna slammed the bench for complying with the early notice despite the fact that the order passed by the Supreme Court followed it.

She said: “So, on Union’s letter? The bank is not acting on the orders of the Supreme Court, but on the basis of Union’s letter.”

The court was informed that the bank is not a party to the miscellaneous application. However, Alawyer Sameer Parekh (Standing Counsel for ICICI Bank) appeared and informed the court that he was not aware of this case. He added that if the petitioner informs them, he will take care of it.

The Court ruled: “We condemn the negligence of the ICICI bank in not complying with the order of this court dated August 9, 2024 and instead seeking to comply with the notice dated December 15, 2023 issued by the Deputy Commissioner of Income Tax. Needless to say, the court’s ruling on August 9 follows the above-mentioned notice. Under certain circumstances, ICICI Bank, Saket, New Delhi, is directed to comply with the order dated August 9, both in letter and spirit.”

Kamat added that the Court could clarify that December 15 has been postponed because the petitioner will have to appear before the Court again if they try to recover money from any other bank account.

On this, Justice Nagarathna orally observed: “No recovery from this. If they don’t understand our simple English, we can’t help them.”

Case details: PPK NEWS CLICK STUDIO PVT. LTD. USA DEPUTY COMMISSIONER OF INCOME TAX, AGENDA NO. – Diary No. 48875-2024

Appearances: Devadatt Kamat (Senior Advocate) and Advocate Rohit Sharma (for Petitioners) and Advocate Chinmayee Chandra (for Union)