Law: Income Tax Act, 1961

Section: 220

Income-tax-----Recovery of tax---Stay of demand---Rejection of application for stay should be by a reasoned order---Indian Income Tax Act, 1961, S.220---Constitution of India, Arf.226.. The Deputy Commissioner of Income-tax passed an order of assessment against the petitioner raising a demand of Rs.9,53,42,953 on account of income-tax and Rs.6,81,64,603 on account of interest making a total of Rs.16,35,07,556. The petitioner had filed an appeal against the order of assessment. The petitioner also moved an application under section 220(6) of the Income Tax Act, 1961, before the Assessing Officer seeking stay of the demand, so as to not treat it as in default in respect of the tax forming the subject-matter of appeal. The Assessing Officer rejected the petitioners application. The petitioner moved an application before the Commissioner of Income-tax. The Commissioner of Income-tax directed the petitioner to pay a sum of Rs.2 crores until the disposal of the first appeal. On a writ petition against the order: Held, that out of the several grievances raised by the petitioner, two were worth being noticed: firstly, that an amount of Rs.78,47,380 had been deducted by way of tax at source, credit whereof had not been allowed to the petitioner while passing the orders in question though the attention of the authorities was specifically invited to it; secondly, the C.B.D.T. had issued circulars which were published in 176 ITR (St.) 240 and 182 ITR (St.) 79, the direction contained wherein had not been kept in view by both the authorities though the attention of both the authorities was specifically invited to this aspect as well. Prima facie from a perusal of the orders it was clear that the contentions raised by the petition, had not been disposed of by a speaking order and no reasons had been given for rejecting the petitioners prayer for giving it credit to the extent of the amount of tax deducted at source. The Assessing Officer had to afford the petitioner an opportunity of hearing and dispose of its application. JUDGMENT As counsel for the respondent has made appearance, in view of the short controversy arising for decision, we have heard the parties finally. Rule…

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