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of <h1>Section 220(6) stay application orders set aside for lack of reasoned decisions and procedural violations</h1> The HC set aside orders dated 14.06.2024 and 18.10.2024 rejecting stay and review applications under Section 220(6) of the Income Tax Act, 1961. The court ... Stay and review application rejected - not providing a reasoned and speaking order while rejecting the applications - HELD THAT:- The respondent authorities has passed the assessment order dated 31.03.2024 passed u/s 143 (3) of the Income Tax Act 1961 along with copy of demand notice issued u/s 156 of the Income Tax Act 1961 against the petitioner. Thereafter the petitioner has filed an application under Section 220 (6) of the Income Tax Act, 1961 filed on 29.04.2024 before respondent No. 3. The respondent- No. 3 has not decided the case on the basis of prima facie case, balance of convenience, irreparable loss caused to the petitioner, Genuine hardship, CBDT instruction and hi-pitched assessment. Respondent No. 3 rejected the application without reasoned and speaking order on 14.06.2024. Subsequently, aggrieved of the same, the petitioner has filed review application before the respondent No. 2/PCIT (Central) Bhopal. The respondent No. 2 has also not decided the review application on merits and passed the order to pay 20% of the tax liability by way of installments in 5 months on. 18.10.2024. Thus, the impugned orders dated 14.06.2024 and 18.10.2024 are non-speaking orders. AO has not adopted the correct procedure in deciding the stay application and review application of the petitioner and has not followed the guidelines as stated in KEC International Ltd. [2001 (3) TMI 32 - BOMBAY HIGH COURT] and in UTI Mutual Fund [2012 (3) TMI 333 - BOMBAY HIGH COURT] and also M/s Aarti Sponge & Power Ltd. [2018 (4) TMI 1284 - CHHATTISGARH HIGH COURT] Thus matter is remitted to the respondent No. 2 to consider the stay application afresh/review application. 1. ISSUES PRESENTED and CONSIDEREDThe core legal issues presented and considered in this judgment include:Whether the orders dated 14.06.2024 and 18.10.2024 rejecting the stay application and review application were passed in a manner consistent with established legal principles and guidelines.Whether the authorities erred in not providing a reasoned and speaking order while rejecting the applications of the petitioner for stay of demand.Whether the principles of natural justice, particularly the requirement of a fair hearing, were violated in the process of passing the impugned orders.Whether the trinity principle of prima facie case, financial hardship, and balance of convenience was duly considered by the authorities while deciding the applications.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Adequacy of the Order Issuance ProcessRelevant Legal Framework and Precedents: The legal framework involves the application of Section 220(6) of the Income Tax Act, 1961, and adherence to guidelines laid down by precedents such as KEC International Ltd. vs. B.R. Balakrishnan and UTI Mutual Fund vs. Income Tax Officer.Court's Interpretation and Reasoning: The court emphasized the necessity for authorities to provide reasoned and speaking orders, reflecting the considerations of the case presented by the assessee.Key Evidence and Findings: The orders were found lacking in detailed reasoning and failed to address the specific circumstances and arguments presented by the petitioner.Application of Law to Facts: The court applied the guidelines from the aforementioned precedents, noting the absence of compliance by the authorities in issuing the impugned orders.Treatment of Competing Arguments: The petitioner argued that the orders were non-speaking and devoid of reasoning, a position supported by the court. The respondents' defense of the orders was not upheld.Conclusions: The court concluded that the orders were improperly issued without adherence to the necessary legal standards and guidelines.Issue 2: Violation of Natural JusticeRelevant Legal Framework and Precedents: The principles of natural justice require that parties be given a fair opportunity to present their case, a principle upheld in various judicial decisions.Court's Interpretation and Reasoning: The court found that the authorities had failed to provide the petitioner with an adequate opportunity to be heard, thereby violating the principles of natural justice.Key Evidence and Findings: The absence of a hearing and lack of detailed reasoning in the orders were critical factors in the court's determination.Application of Law to Facts: The court applied the principles of natural justice to the facts, determining that the petitioner's rights were not adequately protected.Treatment of Competing Arguments: The respondents' arguments supporting the procedural adequacy of the orders were rejected by the court.Conclusions: The court concluded that the orders were issued in violation of the principles of natural justice.3. SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning: 'The impugned orders dated 14.06.2024 and 18.10.2024 are hereby set aside and the matter is remitted to the respondent No. 2 to consider the stay application afresh/review application in the light of the guidelines as stated by the Bombay High Court.'Core Principles Established: The necessity for reasoned and speaking orders, adherence to established guidelines for stay applications, and the protection of natural justice principles were reaffirmed.Final Determinations on Each Issue: The court set aside the impugned orders and remitted the matter back to the authorities for reconsideration in compliance with legal standards and guidelines.
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