Section 220(6) discretion must be exercised responsibly and cannot be summarily rejected during a pending appeal.

Section 220(6) discretion is not a naked or arbitrary power; where an appeal is pending, the Income-tax Officer must consider all relevant circumstances, including the assessee's grounds for seeking relief, before deciding whether the assessee should be treated as not in default for the disputed demand. A request under the provision cannot be rejected merely because the officer is not bound to exercise the power. The note states that the discretion is a power coupled with responsibility, while no relief was granted and the assessee was left to place the relevant grounds before the officer.

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Issues: Whether the Income-tax Officer's discretion under section 220(6) of the Income-tax Act, 1961, when an appeal is pending, is a mere power or a power coupled with responsibility, and whether a request for treating the assessee as not in default can be summarily rejected.

Analysis: The discretion under section 220(6) is not a naked or arbitrary power. When an appeal is pending, the Income-tax Officer must consider all relevant circumstances, including the assessee's grounds for seeking relief, and then decide whether the assessee should be treated as not in default in respect of the disputed demand. A request under the provision cannot be rejected merely on the ground that the officer is not bound to exercise the power.

Conclusion: The discretion under section 220(6) is a power coupled with responsibility, but no relief was granted in the appeal and the assessee was left to place the relevant grounds before the officer.

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