Law:

Section:

Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default - Assessment year 2004-05 - Whether whenever competent authority invokes its powers of reducing period stipulated under section 220, such reduction must invariably be supported by cogent reasons to be recorded in writing - Held, yes - Whether where during pendency of writ petition questioning legality of notice of demand and order of attachment issued by department for recovery of outstanding income-tax dues from assessee, department recovered entire outstanding based on said attachment, writ petition became infructuous - Held, yes FACTS The assessment for the assessment year 2004-05, was completed against the assessee by the Assessing Officer and a demand notice based on the said assessment order was issued on 28-2-2005, demanding a sum within a period of 15 days from the date of service of the notice. Thereafter, quantum of demand was rectified twice. After three days of the last rectification order, an attachment order dated 23-3-2005 was issued attaching the assessee's accounts and FDRs. On writ, the assessee questioned the legality of a notice of demand and an order of attachment issued by the department for recovery of the outstanding income-tax dues from the assessee. The assessee further challenged the reduction of the period for payment of the amount of tax from 30 days as stipulated under section 220 to 15 days and contended that the Assessing Officer even though competent to reduce the notice period had not actually made any order or recorded any reason while reducing the period to 15 days. HELD The legal position regarding the competence of the Assessing Officer to reduce the period for payment of the outstanding dues is clearly stated in section 220. A plain reading of the proviso to section 220 makes it abundantly clear that while the assessing authority has the power to reduce the period for making the payment, such reduction must invariably be supported by valid reasons to be recorded in writing. Therefore, whenever the competent authority invokes its powers of reducing the period stipulated under section 220, it must…

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