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Issues Involved:
1. Legality of the AAC's order rejecting the stay of tax collection. 2. Inherent power of the AAC to grant stay pending appeal. 3. Judicial exercise of discretion by the AAC. Summary: 1. Legality of the AAC's Order Rejecting the Stay of Tax Collection: The petitioner, an assessee to Agricultural Income-tax, filed a return showing a loss for the assessment year 1980-81. The Agricultural Income-tax Officer assessed him to the best of his judgment, resulting in a tax and surcharge of Rs. 25,791.48. The petitioner appealed and requested a stay of tax collection, which was rejected by the AAC in Ex. P-4 order. The court examined whether Ex. P-4 satisfied legal requirements and found it lacking in judicial consideration, thus quashing the order. 2. Inherent Power of the AAC to Grant Stay Pending Appeal: The court discussed the inherent power of the AAC to grant stay orders, referencing several precedents, including *Aluminium Corporation of India Ltd. v. C. Balakrishnan* and *Vetcha Sreeramamurthy v. ITO*. It was held that the AAC has inherent power to pass orders to prevent the final order in the appeal from being ineffective or illusory. This power is essential for the effective exercise of appellate jurisdiction. 3. Judicial Exercise of Discretion by the AAC: The court emphasized that the AAC must exercise discretion judicially, considering all relevant facts and circumstances. The AAC's order should reflect that the principles and guidelines formulated in relevant case law were considered. The court found that Ex. P-4 did not meet these requirements, indicating a failure to exercise discretion judicially. Consequently, the court quashed Ex. P-4 and directed the AAC to dispose of the appeal expeditiously, with a stay of tax collection if the petitioner complied with the interim order. Conclusion: The original petition was allowed, and the AAC was directed to hear and dispose of the appeal on merits, ensuring judicial consideration in line with established legal principles.
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