2016 (3) TMI 181 - HC - Income Tax

Application u/s Section 220 (6) - Held that - For the moment, since the petitioners have applied before the appellate forum with an application for stay of the recovery of the tax in dispute pending disposal of the appeal, the appellate authority is requested to dispose of such application upon affording the assessee a hearing within a period of two months from date, uninfluenced by the orders that may have been passed in matters arising out of Section 220(6) of the Act.

Summary

Issues:
1. Failure of appellate authority to take up stay petition.
2. Principal Commissioner not attending to application under Section 220(6) of the Income Tax Act, 1961.

Analysis:
The judgment addresses the issue of the appellate authority's reluctance to consider a stay petition and the Principal Commissioner's inaction regarding an application under Section 220(6) of the Income Tax Act, 1961. The petitioning assessee raised concerns about administrative practices allowing a particular officer to exercise quasi-judicial functions not explicitly conferred by statute. Referring to past judgments, the petitioners argued that while assessing officers' seniors lack statutory authority for appeals or revisions under Section 220(6), it is customary for such matters to be escalated to higher authorities. Despite this, the appellate authority, typically a Commissioner of Income Tax (Appeals), hesitated to entertain stay applications, contrary to the Supreme Court's stance on the authority's inherent power to grant stays even without express provisions.

The case involved the petitioners submitting an application under Section 220(6) to the assessing officer, which was allegedly rejected without a hearing or explanation. Subsequently, the assessing officer failed to stay the assessment order's operation, prompting the petitioners to approach the joint Commissioner. The joint Commissioner directed partial upfront payment and installment payments for the remaining disputed tax. Dissatisfied, the petitioners appealed to the Principal Commissioner, who allegedly ignored their application since November 2015. The petitioners highlighted the statutory remedy available under Section 264, allowing aggrieved parties to challenge orders before the Commissioner or Principal Commissioner, akin to the revenue's recourse under Section 263.

While acknowledging the department's customary practices, the judgment noted that the Supreme Court did not definitively determine the legality of such practices. Consequently, the petitioners' request for the appellate authority to address their stay application within two months, irrespective of other proceedings, was granted. The case, WP No.82 of 2016, was disposed of without costs, with provisions for urgent certified copies of the order to be supplied upon request and compliance with formalities.