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2018 (3) TMI 1162 - HC - Income TaxApplication for stay under Section 220(6) rejected - Held that - Both the impugned orders dated 30th January, 2018 and 19th February, 2018, rejects the Petitioner s application without considering the Petitioner s, prima facie, case on merits. Both the impugned orders have ignored the binding decision of this Court in KEC International Ltd., v/s. B. R. Balakrishnan & Others 2001 (3) TMI 32 - BOMBAY High Court and UTI Mutual Funds v/s. ITO (2012 (3) TMI 333 - BOMBAY HIGH COURT) which laid down the manner in which stay application under Section 220(6) of the Act have to be disposed of by the authorities under the Act. In the above circumstances, we set aside the orders dated 30th January, 2018 passed by the Assessing Office and also an order dated 19th February, 2018 passed by the Principal Commissioner of Income Tax. However, we restore, the Petitioner s application dated 24th January, 2018 to the Assessing Officer to decide it afresh. Respondent-Revenue will not act upon the Notice of demand issued, consequent to Assessment Order dated 22nd December, 2017 till one week after the Assessing Officer s order under Section 220(6) of the Act is communicated to the Petitioner.
Issues Involved:
Challenge to rejection of stay application under Section 220(6) of the Income Tax Act, 1961 by the Assistant Commissioner of Income Tax and Principal Commissioner of Income Tax. Analysis: 1. The Petitioner filed a petition challenging the rejection of their stay application under Section 220(6) of the Income Tax Act, 1961 by the Assistant Commissioner of Income Tax and the Principal Commissioner of Income Tax. The impugned orders were passed in relation to the pending appeal from the Assessment Order dated 22nd December, 2017 with the Commissioner of Income Tax (Appeals) [CIT(A)]. 2. The Court noted that both the impugned orders had rejected the Petitioner's application without considering the Petitioner's case on merits. The orders failed to take into account the binding decisions of the Court in previous cases such as KEC International Ltd. v/s. B. R. Balakrishnan & Others and UTI Mutual Funds v/s. ITO. Despite being brought to the authorities' notice, they chose to ignore these precedents. The Court considered this omission as a possible mistake on the part of the authorities. 3. In light of the above circumstances, the Court set aside the orders passed by the Assessing Officer and the Principal Commissioner of Income Tax. The Petitioner's application was restored to the Assessing Officer for a fresh decision. The Authorities were directed to consider the decisions of the Court in previous cases while disposing of the stay application under Section 220(6) of the Act. 4. The Court clarified that if the Petitioner requested a personal hearing, both the Assessing Officer and the Principal Commissioner of Income Tax were obligated to grant the necessary hearing. During the hearing, the Petitioner could make further submissions in support of their application for stay. 5. Additionally, the Court directed that the Respondent-Revenue should not take action on the Notice of demand issued following the Assessment Order dated 22nd December, 2017 until one week after the Assessing Officer's decision under Section 220(6) of the Act was communicated to the Petitioner. If the Petitioner filed a representation to the Commissioner of Income Tax within one week, the Revenue was instructed not to act until the Commissioner disposed of the representation and an additional two weeks had passed. 6. The Court made it clear that its order did not prevent the CIT(A) from proceeding with the Petitioner's appeal scheduled on 17th April, 2018, from the Assessment Order dated 22nd December, 2017. 7. The Writ Petition was disposed of with no order as to costs, concluding the judgment.
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