Court Denies Interim Stay: Petitioner Must Follow Section 220(6) for Recovery Proceedings

The court addressed a challenge to a recovery notice issued by the assessing officer for the amount due for the assessment year 2012-13. The petitioner sought a stay on recovery proceedings during the appeal, citing Section 220(6) of the Income Tax Act, 1961. The court clarified that the appellate authority cannot grant interim stay, emphasizing the role of the assessing officer under Section 220(6). The judgment highlighted the need for the petitioner to approach the assessing officer for deferment of recovery proceedings. The court directed the petitioner to submit an application under Section 220(6) within a specified period, with recovery proceedings to be on hold pending a decision.

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Issues:
1. Challenge to recovery notice issued by assessing officer for amount due for assessment year 2012-13.
2. Interpretation of Section 220(6) of the Income Tax Act, 1961 regarding recovery proceedings during pendency of appeal.
3. Applicability of case laws on granting stay of recovery proceedings during appeal.
4. Jurisdiction of appellate authority to grant interim stay under Section 246 or 246-A.
5. Legislative intention behind Section 220(6) and the role of assessing officer in recovery proceedings.

The judgment addressed the challenge to a recovery notice issued by the assessing officer for the amount due for the assessment year 2012-13. The petitioner contended that since an appeal against the assessment order was pending, the recovery proceedings should be stayed, citing Section 220(6) of the Income Tax Act, 1961. The court analyzed the provision of Section 220(6) which allows the assessing officer to treat the assessee as not in default during the appeal's pendency. It was highlighted that the appellate authority is not empowered to grant interim stay, and the assessee must approach the assessing officer under Section 220(6) for deferment of recovery proceedings.

The judgment referred to case laws emphasizing the necessity of staying recovery proceedings during the appeal or until the disposal of an interim stay application. The court discussed the jurisdiction of the appellate authority to grant interim stay under Section 246 or 246-A, contrasting it with the discretionary power vested in the assessing officer by Section 220(6). The legislative intention behind restricting the power of the appellate authority was underscored to ensure expeditious handling of appeals.

Moreover, the judgment analyzed the petitioner's argument that mere filing of an appeal should protect the assessee from default status, which was deemed incorrect. The court emphasized that the petitioner had not invoked Section 220(6) for interim stay, thereby not entitling him to the protection sought solely based on appeal pendency. The judgment also highlighted the absence of material presented to the assessing authority regarding the appeal's status, and the importance of following the legislative provisions to secure the revenue's interest.

Additionally, the judgment discussed the applicability of Civil Procedure Code provisions in judicial proceedings and the need to interpret Section 220(6) as provided in the Act. The court disagreed with the petitioner's proposition, citing various judgments and legislative intent. It was suggested that the CBDT could issue guidance to ensure a balanced approach between revenue recovery and the assessee's relief during appeal proceedings.

Conclusively, the court allowed the petitioner to approach the assessing officer under Section 220(6) within a specified period and directed the assessing officer to decide on any application within three months. Recovery proceedings were to remain in abeyance until a decision on the application or appeal, ensuring alignment with the outcome of the appeal.

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