Law: Income Tax Act, 1961

Section: 269

Income-tax----Deposit---Restriction on mode of repayment---Order of Court directing Bank to make part payment of sum awarded in motor accident claim case--¬Bank manager refusing to make payment otherwise than by Bank draft or cheque---No specific direction in Court order for payment in cash---Bank Manager acting bona fide on basis of S.269-T of Income Tax Act---No question of contempt of Court---Indian Income Tax Act, 1961, 5.269-T--¬Indian Contempt of Courts Act, 1971, S.2. In a motor accident claim case, the High Court passed an order directing the Bank to release a sum of Rs.25,000 out of the total awarded amount in favour of the respondent therein, through his counsel. The Court also directed that the remaining amount was to be put in the fixed deposit for a further period of 25 months. As the final deposit was with the respondent Bank, counsel appearing in the claim case went with her client to the Bank and produced a copy of the order and memo issued by the Court. The respondent, who was the Manager of the Bank, refused to release the amount and asked counsel either to accept a pay order in her name to be deposited in her account or in the alternative to open a fresh account in her name in the Bank in which the amount to be released would be deposited. Counsel made a report to the Court by her letter, dated April 8, 1996, addressed to the Registrar of the Court. On the basis of the letter, the Court initiated contempt proceedings for punishing the Manager of the Bank under the Contempt of Court Act, 1971. The respondent in his affidavit tendered an unconditional apology and also stated that the amount in question being in excess of Rs.20,000, he was bound by the provisions of section 269-T of the Income Tax Act, 1961, to make payment only in two modes : either by account payee cheque or account payee bank draft/pay order or by opening an account and depositing the money in that account. He also placed reliance on a circular issued by the Reserve Bank of India insisting upon compliance with the terms of section 269-T of the Income Tax Act: Held, that if the Court has specified the mode of payment in cash, the respondent could not refuse to make such…

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