Law:

Section:

Section 220, read with section 246 of the Income-tax Act, 1961 [Corresponding to section 45, read with section 30, of the Indian Income-tax Act, 1922] - Collection and recovery of tax - When tax payable and when assessee deemed in default - Assessment year 1957-58 - Whether it is only where an appeal has been presented under section 30 of 1922 Act that ITO has discretion under section 45 of 1922 Act not to treat an assessee as being in default and that too for so long as such appeal remains undisposed of - Held, yes - Whether where ITO refused to afford relief to assessee under section 45 during pendency of assessee's appeal before Tribunal, discretion that ITO had exercised by not making an order in assessee's favour under section 45 could not be interfered with - Held, yes FACTS For the assessment year 1957-58, the petitioner firm was assessed. Pending appeal before the AAC, the petitioner made an application under section 26A but the ITO refused the petitioner to treat it as registered firm. How-ever, on appeal the Tribunal directed registration of the petitioner firm. Accordingly the petitioner-firm was reassessed as a registered firm and the ITO passed a fresh assessment order under section 23(5)(a). Against the order of the ITO making assessment under section 23(5), the firm instituted an appeal before the AAC. The AAC allowed the appeal partly. Against this appellate order, the petitioner-firm further appealed to the Tribunal. Without waiting for the decision of that appeal, which was still pending, the petitioner-firm came to High Court under articles 226 and 227 of the Constitution for quashing the appellate order of the AAC. HELD It is only where an appeal has been presented under section 30 that the ITO has the discretion under section 45 not to treat an assessee as being in default and that too for so long as such appeal remains undisposed of. The language of the concluding portion of the relevant section 45, is unambiguous. The words "when an assessee has presented an appeal under section 30" clearly refer to an appeal against the order of the the ITO to the AAC. Under section 45, it is only the ITO who is the authority to treat the assessee as not…

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