Court sets aside order, emphasizes prima facie case requirement under Income-tax Act The court set aside the impugned order refusing stay of recovery of revenue under section 220(6) of the Income-tax Act, directing the petitioners to ...
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Court sets aside order, emphasizes prima facie case requirement under Income-tax Act
The court set aside the impugned order refusing stay of recovery of revenue under section 220(6) of the Income-tax Act, directing the petitioners to appear before the Assessing Officer for a decision on the application. The court emphasized that the order must specifically address the existence of a prima facie case. It was noted that the power of stay under section 220(6) is granted only when an appeal is presented to the Appellate Assistant Commissioner, not to the Appellate Tribunal. Coercive recovery steps were stayed until the passing of a fresh order, and the writ petition was disposed of without addressing the issue of the Commissioner (Appeals) granting a stay.
Issues involved: Stay of recovery of revenue u/s 220(6) of the Income-tax Act, consideration of existence of prima facie case, availability of alternative remedy before Commissioner (Appeals).
The judgment addresses the issue of stay of recovery of revenue u/s 220(6) of the Income-tax Act. The petitioners argued that the Assessing Officer should have considered the existence of a prima facie case before refusing the stay. The court held that the order refusing stay must be a composite order, specifically dealing with the existence of a prima facie case. The impugned order was set aside, and the petitioners were directed to appear before the Assessing Officer for a decision on the application u/s 220(6) on a specified date.
Regarding the availability of an alternative remedy before the Commissioner (Appeals), the court noted that an appeal had been filed by the petitioners. The court referred to a decision highlighting that the power of stay u/s 220(6) is granted to the Income-tax Officer only when an appeal is presented to the Appellate Assistant Commissioner, not to the Appellate Tribunal. The court emphasized that the statutory power of stay is confined to the stage of pendency of an appeal before the Appellate Assistant Commissioner.
The judgment also mentioned that coercive steps for recovery would not be pursued until the date of passing of the fresh order. The court disposed of the writ petition, indicating that the issue of whether the Commissioner (Appeals) is competent to grant a stay need not be addressed in this case.
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