Speaking order required for stay of demand where TDS credit and circulars were not considered.

An order disposing of a stay application under section 220(6) was set aside because it was not a speaking order and did not deal with the assessee's claim for credit of tax deducted at source or the relevant circulars. The High Court held that such contentions should have been considered and reasoned upon before deciding whether the assessee could be treated as in default pending appeal. The matter was remitted for fresh consideration by the Assessing Officer after giving an opportunity of hearing.

---

---

Issues: Whether the order disposing of the application for stay of demand under section 220(6) of the Income-tax Act, 1961 required reconsideration for want of reasons and for failure to consider credit for tax deducted at source and the relevant circulars.

Analysis: The demand arose from an assessment order against which an appeal was pending, and the assessee had sought that it be not treated as in default under section 220(6). The authorities had not dealt with the claim for credit of tax deducted at source and had not assigned reasons while declining that relief. The Court found that such contentions ought to have been addressed in a speaking order and that the matter required fresh consideration in light of the circumstances placed before the authorities.

Conclusion: The matter was directed to be reconsidered afresh by the Assessing Officer after granting an opportunity of hearing, with the impugned disposal set aside to that extent.

---