1968 (11) TMI 9 - HC - Income Tax

Whether ITO has jurisdiction to grant stay collection of tax - jurisdiction of the ITO under s. 220(6) is quasi-judicial and has been exclusively entrusted to him by the State - question is answered in positive

Summary

Issues:
1. Interpretation of section 220(6) of the Income-tax Act, 1961.
2. Authority of the Income-tax Officer to grant stay on tax collection.
3. Jurisdiction of the Commissioner of Income-tax over subordinates.
4. Quasi-judicial function of the Income-tax Officer.
5. Application of section 220(6) in granting stay on tax payment.

Analysis:

The judgment revolves around the interpretation and application of section 220(6) of the Income-tax Act, 1961. The petitioner sought a direction for the Income-tax Officer to consider their application dated June 12, 1967, for stay of tax collection. The Income-tax Officer had initially communicated terms for stay, requiring payment of half the tax by a specified date. Subsequently, the petitioner expressed their intention to pay from proceeds of a land sale, seeking understanding from the Income-tax Officer. The crux of the issue was whether the Income-tax Officer was bound by the Commissioner's directions or had the authority to exercise discretion under section 220(6) independently.

The court clarified that the Income-tax Officer's power under section 220(6) is quasi-judicial and exclusive, not subject to external directives, even from superiors like the Commissioner of Income-tax. While the Commissioner holds administrative authority, the Income-tax Officer must autonomously assess requests for stay without being compelled to follow higher authority's instructions. The judgment emphasized that the Income-tax Officer's duty is to independently evaluate and decide on stay applications, ensuring a fair and impartial process. The court underscored that the Income-tax Officer should not merely act as a conduit for the Commissioner's directives but exercise individual judgment in granting stays under section 220(6).

In this case, the court found that the Income-tax Officer had not been unduly influenced by the Commissioner's directions but had independently extended the payment deadline upon non-compliance. The petitioner's application did not explicitly seek a stay under section 220(6) but rather appealed for understanding of their circumstances. Consequently, the court dismissed the petition, noting the absence of a formal application under section 220(6) before the Income-tax Officer. However, the petitioner was granted the option to reapply under section 220(6) if desired, highlighting the importance of following proper procedures for seeking stays on tax payments.

In conclusion, the judgment clarified the autonomous nature of the Income-tax Officer's quasi-judicial function under section 220(6), emphasizing the need for independent assessment and decision-making in granting stays on tax collections.