1968 (1) TMI 19 - HC - Income Tax

Whether the respondent and the officers higher up failed to exercise their discretion properly u/s 220(6) of the IT Act 1961 - Sub-s. (6) of s. 220 is wide enough to cover a stay on condition that the assessee should pay the disputed amount by instalments either in whole or in part and should furnish security for the balance - question is answered in negative - petition is dismissed

Summary

Issues:
1. Interpretation of Section 220(6) of the Income-tax Act, 1961 regarding the discretion of the Income-tax Officer to grant stay on tax collection.
2. Whether the Income-tax Officer properly exercised discretion under Section 220(6) in the case.
3. Comparison and analysis of the provisions of Section 220(3) and Section 220(6) of the Income-tax Act, 1961.

Detailed Analysis:
1. The judgment involved a petition under Article 226 of the Constitution concerning the respondent's recovery proceedings against the petitioner's husband based on an assessment order. The petitioner argued that the respondent and higher officers did not exercise their discretion properly under Section 220(6) of the Income-tax Act, 1961. The petitioner contended that the conditions under Section 220(6) should only involve furnishing security and not installment payments of arrears, claiming that the refusal to stay tax collection was illegal (Para. 5).

2. The court rejected the narrow interpretation of Section 220(6) proposed by the petitioner. It emphasized that the Income-tax Officer's discretion under this provision should not be limited to only granting stay on furnishing security but should be interpreted more broadly. The court highlighted the need for the officer to exercise discretion according to law and reason, without considering irrelevant matters, citing legal principles and precedents (Para. 6).

3. Section 220 of the Income-tax Act, 1961 was analyzed, particularly focusing on the provisions of Section 220(3) and Section 220(6). The court explained that while Section 220(3) allows for extension of time for payment or installment payments of the whole amount in arrears, Section 220(6) provides wider discretion to the Income-tax Officer regarding stay on collection of the disputed amount. The court rejected the argument that the absence of specific provisions for installment payments in Section 220(6) limited the officer's discretion, emphasizing the broad scope of Section 220(6) (Para. 7).

4. The court concluded that there was no evidence to suggest that the respondent or higher officers failed to consider relevant circumstances or acted arbitrarily in the case. It dismissed the petition, stating that the respondent was not obligated under Section 220(6) to treat the assessee as not in default only upon furnishing security, rejecting the petitioner's contentions (Para. 8).

5. Additionally, the court granted the petitioner's request for expeditious disposal of the appeal by the Appellate Assistant Commissioner within three months from the date of the judgment (Para. 9).