2019 (2) TMI 1446 - HC - Income Tax

Stay petition - Demand issued u/s 156 - recovery of the tax amount/penalty - Held that - It is not disputed that the application for stay is pending before the Appellate Authority. Without waiting for a decision on the said stay application, petitioner has rushed to this Court by way of this petition contending that in view of the provisions contained in Sub-Section (6) of Section 220 of the Income Tax Act, the petitioner after having preferred an appeal under Section 246A cannot be declared defaulter and no coercive action can be taken against him for recovery of the tax amount/penalty. Petitioner has placed reliance on the decision of Sanjay Kumar Sahu Vs. Income Tax Officer and Others 2013 (4) TMI 484 - MADHYA PRADESH HIGH COURT After hearing learned counsel for the petitioner at length, we are of the considered opinion that we should refrain ourselves from making any observation which may prejudice either the petitioner or revenue either way since admittedly the appeal is pending before the Appellate Authority along with the stay application - dispose of this writ petition with the simple direction to the Appellate Authority to take up the matter as expeditiously as possible

Summary

Issues:
Challenge to notice of demand under Section 156 of Income Tax Act for Assessment Year 2016-2017; Petitioner's appeal to Commissioner of Income Tax (Appeals) and application for stay of recovery pending appeal; Interpretation of Sub-Section (6) of Section 220 of Income Tax Act regarding defaulter status during appeal process.

Analysis:
The judgment pertains to a petition challenging a notice of demand issued under Section 156 of the Income Tax Act for the Assessment Year 2016-2017. The petitioner had appealed to the Commissioner of Income Tax (Appeals) and filed an application to stay the recovery of demand pending the appeal process. The petitioner contended that under Sub-Section (6) of Section 220 of the Income Tax Act, no coercive action can be taken against them during the appeal process. The petitioner relied on legal precedents to support their argument.

The High Court, after hearing the petitioner's counsel, refrained from making any observations that could prejudice either party, given that the appeal and stay application were pending before the Appellate Authority. The Court disposed of the writ petition with a direction to the Appellate Authority to expedite the matter and proceed in accordance with the law. The judgment emphasized the need for the Appellate Authority to handle the case promptly and in compliance with legal procedures, without making any definitive statements on the merits of the petitioner's argument.

In conclusion, the High Court's judgment focused on procedural fairness and the need for the Appellate Authority to address the pending appeal and stay application promptly. The Court avoided making substantive decisions on the petitioner's argument regarding defaulter status during the appeal process, highlighting the importance of following due process and allowing the Appellate Authority to adjudicate the matter in accordance with the law.