Today, on Nov 18th, the Supreme Court criticized ICICI Bank for not unfreezing NewsClick’s account despite prior orders amid an income tax dispute. Justices emphasized the bank’s non-compliance, directing immediate action to reinstate the account. The Court’s August 2023 interim relief had previously allowed NewsClick to halt tax recovery actions, stressing the necessity for financial institutions to respect judicial directives.
New Delhi: The Supreme Court on Monday, Nov 18th, strongly criticized ICICI Bank for failing to unfreeze the bank account of online news portal NewsClick despite clear orders issued earlier. The matter pertains to an ongoing income tax dispute between NewsClick and the tax authorities.
A Bench comprising Justices BV Nagarathna and N Kotiswar Singh expressed displeasure at the bank’s non-compliance, with Justice Nagarathna remarking,
“Why should the bank have a doubt? We deprecate omission on its part. If they (bank) cannot understand our simple English, we cannot help them.”
The Court has now directed ICICI Bank to immediately comply with its previous order and ensure the account is operational without further delay.
Background of the Case
The controversy stems from two disputed income tax demand notices issued to NewsClick in November 2022 and February 2023. The news portal had approached the Supreme Court after facing challenges in lower courts, including the Delhi High Court, which refused to grant relief last year.
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In February 2023, NewsClick opted to approach the Income Tax Appellate Tribunal (ITAT) instead of pursuing its appeal before the Supreme Court. However, in April 2023, the ITAT declined to stay the tax demands, and this interim decision was upheld by the Delhi High Court in May 2023.
In August 2023, the Supreme Court provided interim relief to NewsClick by staying further recovery of income tax under the disputed notices. The Court noted that the portal had already deposited 30% of the assessed amount with the tax department, satisfying a critical condition for temporary relief.
Despite this order, NewsClick’s bank account remained frozen, prompting the news portal to file a miscellaneous application seeking directions for the account to be unfrozen.
Supreme Court’s Orders to ICICI Bank
On Monday, the Bench took a firm stance against ICICI Bank for failing to implement the Court’s August 9 directive in “letter and spirit.” The counsel for ICICI Bank assured the Bench that the required actions would now be carried out promptly.
The Court’s official order stated, “Direction is issued to ICICI Bank to comply with the 9th August order of this court in letter and spirit.” With this, the Court disposed of the miscellaneous application filed by NewsClick.
Legal Representation
The case saw representation by prominent legal professionals:
- Senior Advocates Kapil Sibal and Devadatt Kamat appeared for NewsClick, along with advocates Rohit Sharma, Nikhil Purohit, Jatin Lalwani, Rajesh Inamdar, and Anubhav Kumar.
- Advocate Chinmayee Chandra represented the Union government.
- Advocate Sameer Parekh appeared for ICICI Bank.
- Additional Solicitor General N Venkataraman represented the Income Tax Department.
A Recap of NewsClick’s Legal Journey
The Supreme Court’s interim relief in August 2023 marked a critical turning point for NewsClick, offering temporary respite from tax recovery actions. However, the bank’s delay in unfreezing the account added another layer of complications to the dispute.
This case underscores the importance of clear and timely compliance with judicial orders, especially when they impact fundamental business operations.
By quashing ICICI Bank’s inaction, the Supreme Court has once again reiterated its stance on ensuring that financial institutions uphold the law and respect the judiciary’s directives.
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