TaxTMI 
TaxTMI 
2011 (12) TMI 158
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....fore coming the provisions of the Act and interpretation thereof, a brief look at the facts in which the present writ petition arises would be necessary. 3. The petitioner-assessee, M/s. Maheshwari Agro Industries, Jodhpur, engaged in the business of manufacturing and trading of oils, for assessment year 2008-09, as a partnership firm filed its return of income through e-filing system on 30.09.2008 declaring the income of Rs. 3,48,140/-. Initially, the case was processed under Section 143(1) of the Act on 22.04.2009 on refund, however, the case of the assessee was selected for scrutiny, since a survey was conducted on 18.03.2007 at the business place of the petitioner under Section 133A of the Act, his case was fixed for assessment upon scrutiny, and accordingly, a notice under Section 143 (2) of the Act was issued to him on 24.04.2009. The assessee produced relevant record and Books of Account before the Assessing Authority and the Assessing Authority ultimately passed the impugned assessment order Annex-1 for the said Assessment Year 2008-09 on 20.12.2010 and making additions in the declared income of Rs. 3,48,140/-, the total income assessed by the Assessing Authority was to ....
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....ce of the impugned demand for recovery to the tune of Rs. 58 lacs vide Annex-5 dated 21.01.2011 after some rectification of the arithmetical errors by the Assessing Authority. 6. The petitioner-assessee preferred first appeal under Section 246A of the Act before the learned Commissioner of Income Tax (Appeals) against the said assessment order dated 24.12.2010 on 31.12.2010 vide Annex-2 and shortly thereafter filed an application before the CIT (Appeals) vide Annex-3 alleging therein that the demand created by the learned I.T.O. is arbitrary and since he is pressing hard for recovery and may take coercive steps for such recovery, the appeal may be heard as early as possible. The assessee also appears to have filed an application for rectification of the order under Section 154 of the Act vide Annex-4 on 20.01.2011 upon which Annex-5 order for rectification was passed by the learned I.T.O. on 21.01.2011. The formal notice for demand vide Annex-6 was issued to the assessee on 21.01.2011 for Rs. 58,48,697/-. 7. The petitioner-assessee filed also an application under Section 220 (3) and 220 (6) of the Act for stay of entire disputed demand before the Assessing Authority I.T.O. Wa....
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....further submitted that vide communication dated 22.02.2011 even the order passed by the learned CIT (Appeals) on 17.02.2011 has been withdrawn. The communication dated 22.02.2011 Annex-18 has been produced along-with additional affidavit, which the petitioner filed on 01.03.2011. 11. The respondent- Income Tax Department has filed reply to the writ petition and has justified the impugned orders passed in the present matter. 12. The arguments were heard at length and shorn of unnecessary details, this Court feels persuaded to interpret the relevant powers of the authorities under the Act to grant stay and to interpret the scope of application under Section 220(3)/220 (6) of the Act and to pass consequential directions thereafter. 13. Learned counsel for the petitioner, Mr. Dinesh Mehta, submitted that in the present case, apparently a very high pitched assessment has been made by the learned Assessing Authority for AY 2008-09 and high GP rate of 20.20%, which was declared by the assessee for the AY 2006-07 could not have been applied as a thumb rule for present AY 2008-09 also, and on a ten fold increase in turnover, the lower GP rate of 9.79% declared by the assessee was c....
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....All) 77 and subsequent decision of Allahabad High Court in the case of Smita Agrawal (Ind.) v. Commissioner of Income-tax reported in [2010] 230 CTR (All) 173. He also placed reliance on the decision of Valvoline Cummins Ltd. v. Deputy Commissioner of Income-tax reported in [2008] 307 ITR 103 (Delhi) and Rajasthan High Court decision in the case of Maharana Shri Bhagwat Singhji of Mewar v. Income-Tax Appellate Tribunal, Jaipur Bench, Jaipur reported in [1997] 223 ITR 192 (Raj.). He also referred the Instruction No. 95 [F. No.1/6/69-IT(C)] dated 21.08.1969 issued by the Central Board of Direct Taxes, New Delhi, wherein referring to observations made by the then Dy. Prime Minister, the CBDT had issued instructions to subordinate authorities that where the income determined on assessment was substantially higher than the returned income viz. twice the later amount or more, the collection of the taxes in dispute to be held in abeyance till the decision of the appeals provided there was no fault on the part of the assessee. 16. Learned counsel for the petitioner-assessee, therefore, urged that entire disputed demand should be kept in abeyance till the first appeal filed by the assess....
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.... of the Act should be construed to mean that recovery of the disputed demand during the pendency of first appeal, shall automatically remain stayed and the assessee cannot be treated in default entailing the consequences of interest under Section 220(2) of the Act and penalty under Section of the Act. 18. Learned counsel for the petitioner also urged that provisions contained in Section 220 of the Act, in Chapter XXVII bearing the heading "Collection and Recovery" of taxes in Part D of Chapter XXVII, cannot be equated with the power to grant stay and it is a negative power or a discretion given to the Assessing Authority in negative terms, empowering him to not to treat the assessee in default, subject to certain conditions, which he may impose, as long as such appeal remains undisposed of. Drawing the attention of the Court towards use of word "246 or 246A only" in Section 220(6) of the Act and not Section 254 relating to powers of ITAT, learned counsel for the petitioner sought to distinguish the two powers at two different stages of the appellate forums and submitted that during pendency of the first appeals, normally, assessee cannot be treated in default at all unless there....
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.... for the Revenue further submitted that in fact the assessee has not filed any separate stay application before the learned Commissioner of Income Tax (Appeals) in the present matter and, therefore, there is no question for such authority to decide any such stay application even though such power was to be assumed as being available with him. Learned counsel for the Revenue also submitted that on administrative side, the higher authority, namely, Commissioner of Income Tax-I, Jodhpur also dealt with the matter of stay in the case of the petitioner-assessee. Although, initially while granting stay in favour of petitioner-assessee, the petitioner was allowed to make payment of disputed demand to the extent of Rs. 30 lacs in instalments of a sum of Rs. 10 lacs each against the total demand of Rs. 58 lacs, vide order Annex-15 dated 17.02.2011, since the assessee failed to comply with the said condition, the learned C.I.T. withdrew the said order on 22.02.2011. He, therefore, submitted that C.I.T. (Appeals) may decide the pending appeal of the assessee in accordance with law, however, as far as the stay application is considered, the matter stands decided at the hands of the departmenta....
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.... at the rate of one and one-half per cent for every month or part of a month.] [(2A) Notwithstanding anything contained in sub-section (2), [the [Chief Commissioner or Commissioner] may] reduce or waive the amount of interest [paid or] payable by an assessee under the said sub-section if [he is satisfied] that- (i) payment of such amount [has caused or] would cause genuine hardship to the assessee ; (ii) default in the payment of the amount on which interest [has been paid or] was payable under the said sub-section was due to circumstances beyond the control of the assessee ; and (iii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.] (3) Without prejudice to the provisions contained in sub-section (2), on an application made by the assessee before the expiry of the due date under sub-section (1), the [Assessing] Officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case. (4) If the amount is not paid within the time limited under sub-section (1) o....
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....o the making of adjustments, or any order of assessment under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed; (b) an order of assessment, reassessment or recomputation under section 147 or section 150; Section 246A - Appealable orders before Commissioner (Appeals) (1) Any assessee aggrieved by any of the following orders (whether made before or after the appointed day) may appeal to the Commissioner (Appeals) against - (a) [an order passed by a Joint Commissioner under clause (ii) of sub-section (3) of section 115VP or an order against the assessee] where the assessee denies his liability to be assessed under this Act or an intimation under sub-section (1) or sub-section (1B) of section 143, where the assessee objects to the making of adjustments, or any order of assessment [under sub-section (3) of section 143 except an order passed in pursuance of directions of Dispute Resolution Panel] or section 144, to the income assessed, or to the amount of tax determined, or to the amount of loss com....
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.... order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Section 253 - Appeals to the Appellate Tribunal (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order - (a) an order passed by a Deputy Commissioner (Appeals)] [before the 1st day of October, 1998] or, as the case may be, a Commissioner (Appeals)] under section 154, Section 250, section 271, section 271A or section 272A; or (b) an order passed by an Assessing Officer under clause (c) of section 158BC, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, after the 30th day of June, 1995, but before the 1st day of January, 1997 ; or (ba) to (d) ** ** ** (2) to (6) ....
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....the period or periods of stay so extended or allowed: Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. Section 255 - Procedure of Appellate Tribunal (1) The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof. (2) to (4)** ** ** (5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its power or of the discharge of its functions, including the places at which the Benches shall hold their sittings. 24. The relevant Circulars issued under Section 220(6) of the Act & Instructions are also reproduced hereunder for ready reference....
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....hat these instructions are being scrupulously followed by the Income-tax Officers. Board's Letter F. No. 404/132/70-ITCC, dated 14 September, 1970. Source: PAC's 25th Report (Fifth Lok Sabha), Page 35. 24.3 CBDT's clarification on instructions on Stay of Demand Letter [F.No. 404/10/2009-ITCC], dated 1-12-2009 Many queries have been received regarding the applicability of Instruction No. 95, dated 21.8.1969 vis-à-vis Instruction No. 1914, dated 2.12.1993. Many assessees are taking the plea that Instruction No. 1914 does not supercede Instruction No. 95, dated 21.8.1969. 2. Instruction No. 95, dated 22.8.1969 was an assurance given by the then Deputy Prime Minister during the 8th Meeting of the Informal Consultative Committee held on 13th May, 1969. The observations made by the Deputy Prime Minister were as under:- "Where the income determined on assessment was substantially higher than the returned income, say twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision on the appeal provided there were no lapses on the part of the assessees." The above observations were circulated to the field offi....
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.... 3. It is clear that the substance of the assurance as laid down in Instruction No. 95, dated 21.8.1969 was submerged in the Instruction No. 1362, dated 15/10/1980 which was issued in supersession of all earlier Instructions on the subject. Instruction No. 1914, dated 2.12.1993 was issued subsequently in supersession of all the earlier Instructions on the subject and the said Instruction also covers unreasonably high pitched assessment order and genuine hardship cases. 4. It is therefore clarified that there is no separate existence of the Instruction No. 95, dated 21.8.1969. Instruction No. 95, and all subsequent Instructions on the issue ceased to exist from the date Instruction No. 1362 came into operation. In turn Instruction No. 1362 and all subsequent Instructions on the issue also ceased to exist the day Instruction No. 1914 came into operation i.e. 2/12/1993.The Instruction No. 1914 holds the field currently and a copy of Instruction No. 1914 is enclosed for reference. Recovery of Outstanding tax Demands [Instruction No. 1914 F. No. 404/72/93 ITCC, dated 2-12-1993 from CBDT] (Quoted in extenso in para No.46 below) 24.4 Circular No.119 Capital gains-Payment....
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....ing before DC(Appeals)/ CIT(Appeals). Under section 220(6) of the Income-tax Act, 1961, where an assessee has presented an appeal under section 246 of the Act before the Deputy Commissioner (Appeals) or the Commissioner (Appeals), the Assessing Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired as long as such appeal remains undisposed of. 2. Having regard to the proper and efficient management of the work of collection of revenue, the Board has considered it necessary and expedient to order that on an application being filed by the assessee in this behalf, the Assessing Officer will exercise his discretion under section 220(6) of the Act (subject to such conditions as he may think fit to impose) so as to treat the assessee as not being in default in respect of the amount in dispute in the appeal in the following situations: (i) the demand in dispute has arisen because the Assessing Officer had adopted an interpretation of law in respect of which the....
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....to pay the demand will not be relevant." 3. Representations have been received by the Board that the exclusion of financial capacity of the assessee to pay the demand, from the factors relevant for exercise of Assessing Officer's discretion under section 220(6) of the Income-tax Act, is prejudicial to those assessees who are not financially sound. 4. The matter has been reconsidered by the Board. It has been decided to substitute paragraph 4 of the Circular No. 530 ([1989] 176 ITR (St.) 240), by the following paragraph-- "In respect of other cases not covered by paragraph 2 above, the Assessing Officer, while considering the situation for treating the assessee to be not in default, would consider all relevant factors having a bearing on the demand raised and communicate his decision to the assessee in the form of a speaking order." (Sd.) V.K. Mangotra, Secretary, Central Board of Direct Taxes." 25. The Income Tax Act, 1961 is a self-contained and comprehensive code in itself. The direct tax, namely, income tax on various types of assessee/s including the body corporates, is required to be paid as per charging provisions of the Act after computing the total inco....
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....levant for this case and they have also been quoted above. 26. The main crux of the matter is as to whether in the scheme of the Act specially after amendment of Section 254 of the Act conferring powers of granting stay upon the appellate Tribunal after insertion of sub-Sections (2A) and (2B) in Section 254 of the Act by Finance Act, 1999 with effect from 01.06.1999 and further first proviso substituted by Finance Act, 2007 with effect from 01.06.2007 extending period of stay granted by the ITAT in the first instance for 180 days then extendable up to 365 days in second proviso, and this amendment purportedly having been brought on the statute book in pursuance of decision of the Hon'ble Supreme Court in the case of M.K. Mohammed Kunhi (supra), the question is as to whether such powers to grant stay can still be implied as inherent power of the first appellate authority, namely, CIT (Appeals) and Dy. Commissioner (Appeals) or not. 27. The answer to this question, in the opinion of this Court, has to be given in affirmative. The reasons are not far to seek. The powers of the appellate authorities are indisputably concurrent and co-extensive with that of the Assessing Authority....
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....nch of Allahabad High Court in the case of Prem Prakash Tripathi (supra) while extending the ratio of the Apex Court judgment in the case of M.K. Mohammed Kunhi (supra) to the powers of first appellate authority in the following terms: - "4. This is how the petitioner has come up to this court. It is submitted by learned counsel for the petitioner that no power is vested in the Commissioner of Income Tax (Appeals) to grant stay order under the Income Tax Act, 1961 (briefly, "the Act") , and, therefore, the petitioner has resorted to Article 226 of the Constitution. It is, no doubt, true that there is no specific provision in the Act or the Rules framed thereunder conferring power to grant stay on the Commissioner of Income Tax (Appeals). Ordinarily, such power should be vested in an appellate authority. The appeal is nothing but a continuation of assessment proceedings. If in the absence of power to grant stay the recovery is made during the pendency of the appeal and if the appeal is allowed in course of time, then that would cause avoidable inconvenience to the assessee. For effective adjudication of the matters and to obviate unnecessary inconvenience to the assessees, it is ....
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....ight and that right can be conferred by a given statute with or without imposing limitations. Unless there is an exclusionary provision, power to grant stay will ordinarily be deemed to have been conferred on the appellate authorities. 7. When the Appellate Tribunal was held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction, we see no reason why the same legal position should not follow in the case of the Commissioner of Income Tax (Appeals), who is also an appellate authority like the Appellate Tribunal. In this situation, what holds good in the case of the Appellate Tribunal equally applies to the Commissioner of Income Tax (Appeals). Following this authority, we hold that the Commissioner of Income Tax (Appeals) must be held to have the power to grant stay, which is incidental or ancillary to its appellate jurisdiction." 30. Following the Division Bench decision in the case of Prem Prakash Tripathi's case, the Allahabad High Court, Division Bench, in the later decision in the case of Smita Agrawal (Ind.) (supra) actually felt constrained that the High Courts are being flooded with avoidable litigation arising in such circumstances by ....
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....es. We do not propose to make this order an occasion to illustrate the various reasons for delay but we will be failing in our duty if we refrain from showing our concern to such callousness on the part of the revenue authorities in sitting tight over the stay application compelling the assessee to run to the High Court by filing writ petition simply to get an order for expeditious disposal of the application for interim order. If they have some justification for not deciding the stay application for sometime, it would be in the fitness of things that in such cases, the assessing authority, if it has received the information that the assessee has approached the appellate authority by filing appeal along with the stay application which is pending, must await the recovery till the decision is taken by the appellate authority on such stay application. We, therefore, direct the Central Board of Direct Taxes, New Delhi to look into this aspect of the matter and, if necessary, to issue a circular to all the appellate authorities directing them to dispose of stay applications expeditiously and so long the stay application is not disposed of the Assessing Officer must be slow or reluctant ....
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....ction. The conclusions of the Hon'ble Supreme Court in paras 13 and 14 of Mohd. Kunhi's judgment are quoted below for ready reference: - "13. Section 255 (5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its executions and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory. 14. A certain apprehension may legitimately arise in the minds of the authorities administering the Act th....
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.... or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence.' 31. .. but to winch up the legislative intent, it is permissible for courts to take into account of the ostensible purpose and object and the real legislative intent. Otherwise, a bare mechanical interpretation of the words and application of the legislative intent devoid of concept of purpose and object will render the legislative inane. 35. Therefore, an interpretation having a social justice mandate is required. The statutory provision is to be read in a manner so as to do justice to all the parties. Any construction leading to confusion and absurdity must be avoided. The Court has to find out the legislative intent and eschew the construction which will lead to absurdity and give rise to practical inconvenience or make the provision of the existing law nugatory. The construction that results in hardship, serious inconvenience or anomaly or gives unworkable and impracticable results, should be avoided. (Vide: Corporation Bank v. Saraswati Abharansala [2009] 1 SCC 540; and Sonic Surgical v. Nationa....
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....is of balance. It means to give to each his right. Therefore, while tempering the justice with mercy, the Court has to be very conscious that it has to do justice in exact conformity with the statutory requirements. 42. Thus, it is evident from the above referred law, that the Court has to interpret a provision giving it a construction agreeable to reason and justice to all parties concerned, avoiding injustice, irrationality and mischievous consequences. The interpretation so made must not produce unworkable and impracticable results or cause unnecessary hardship, serious inconvenience or anomaly. The court also has to keep in mind the object of the legislation. 43. In a recent decision, the Division Bench of Delhi High Court in the case of Valvoline Cummins Ltd. (supra) has held that even the application under Section 220(6) of the Act where two authorities, namely, Additional Commissioner acting as Assessing Officer directed the assessee to approach his subordinate authority-Deputy Commissioner for stay under Section 220(6) of the Act, the Court disapproved of such a direction and held that even if two authorities had concurrent jurisdiction in the matter, the first author....
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....e-tax. A perusal of paragraph 2 of the aforesaid extract would show that where the income determined is substantially higher than the returned income, that is, twice the latter amount or more, then the collection of tax in dispute should be held in abeyance till the decision on the appeal is taken. In this case, as we have noted above, the assessment is almost 8 times the returned income. Clearly, the above extract from Instruction No. 95 dated August 21, 1969 would be applicable to the facts of the case. Learned counsel for the assessee has drawn our attention to several decision of various High Courts which have interpreted the aforesaid Instruction in the way that we have read it. Some of these decisions are N. Rajan Nair v. ITO [1987] 165 ITR 650 (Ker), Mr. R. Mani Goyal v. CIT [1996] 217 ITR 641 (All), and I.V.R. Constructions Ltd. v. Asstt. CIT [1998] 231 ITR 519 (AP). Under the circumstances, we are of the view that the assessee would, in the normal course, be entitled to an absolute stay of the demand on the basis of the above Instruction." 44. Similarly, the learned Single Judge of Madras High Court in the case of M.G.M. Transport (Madras) P. Ltd. v. Income-tax....
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.... aforesaid instruction, it is clear that where the income determined on assessment was substantially higher than the returned income, twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision of the appeals. It cannot be disputed in the present case that the income of the petitioner which was determined by the authority was much more than twice the returned income. In support of his contention, counsel placed reliance on a judgment of the Allahabad High Court in the case of Mrs. R. Mani Goyal v. CIT [1996] 217 ITR 641, wherein it was held that if the income determined on assessment is substantially greater than the returned income and if appeal is filed, recovery should be stayed till the disposal of appeal." 46. The Delhi High Court Division Bench again in Taneja Developers & infrastructure Ltd. v. Assistant Commissioner of Income Tax [2010] 324 ITR 247 (Del) rejecting the contention of the learned counsel for the Revenue that with the issuance of new Instruction No.1914 of 1993 dated 02.12.1993, the Instruction No.95 dated 21.08.1969, quoted above, stood superseded and relying upon the Instruction No.95 and earlier decis....
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.... the petition. Such a decision should be communicated to the assessee and the Assessing Officer immediately. (iii) The decision in the matter of stay of demand should normally be taken by Assessing Officer/TRO and his immediate superior. A higher superior authority should interfere with the decision of the AO/TRO only in exceptional circumstances e.g., where the assessment order appears to be unreasonably high-pitched or where genuine hardship is likely to be caused to the assessee. The higher authorities should discourage the assessee from filing review petitions before them as a matter of routine or in a frivolous manner to gain time for withholding payment of taxes. C. Guidelines for staying demand A demand will be stayed only if there are valid reasons for doing so. Mere filing an appeal against the assessment order will not be a sufficient reason to stay the recovery of demand. A few illustrative situations where stay could be granted are : (i) It is clarified that in these situations also, stay may be granted only in respect of the amount attributable to such disputed points. Further where it is subsequently found that the assessee has not cooper....
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....unal's order on the appeal can be known within two months. (iii) Appeal effects will have to be given within 2 weeks from the receipt of the appellate order. Similarly, rectification application should be decided within 2 weeks of the receipt thereof. Instances where there is undue delay in giving effect to appellate orders, or in deciding rectification applications, should be dealt with very strictly by the CCITs/CITs. 3. The Board desires that appropriate action is taken in the matter of recovery in accordance with the above procedure. The Assessing Officer or the TRO, as the case may be, and his immediate superior officer shall be held responsible for ensuring compliance with these instructions. 4. This procedure would apply mutatis mutandis to demands created under other Direct Taxes enactments also." Relying upon the said Instruction No. 1914 of 1993, Mr. Jolly submitted that all previous instructions stood superseded which included the supersession of said Instruction No. 95. He further submitted that paragraph No. 2(C), which deals with guidelines for staying demand, specifically requires that a demand be stayed only if there are valid reasons for doing so ....
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....pressed, of course, are only prima facie in nature. The application stands disposed of." 47. In the case of Bharat Heavy Electrics Ltd. v. State of Karnataka [2006] 147 STC 638 (Karn) (FB), the Karnataka High Court has held as under: "Sub-section (6) of Section 23 does not relate to the power of High Court to pass interim orders during the pendency of revision. It does not bar or prohibit, granting of stay, pending disposal of the revision petition. It only requires the dealer to pay the tax in regard to the assessment made irrespective of the fact that a revision petition has been filed against the order of the Appellate Tribunal, under Section 23 (1). The effect of it is that where that revision is by the State, the dealer cannot postpone payment of tax, merely on the ground that the order of the Tribunal is challenged by the State itself. Similarly, where the dealer has challenged the order of the Tribunal in a revision petition, he cannot postpone the payment of tax merely on the ground that a revision petition filed by him is pending. In other words, the effect of sub-section (6) is that mere filing of a revision does not act as an automatic stay of recovery of tax. B....
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....spect of the item. There is no reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) is too narrow a view to take of the powers of the Tribunal." 49. In the case of Rajan Nair v. ITO [1987] 165 ITR 650 (Ker), the Kerala High Court has held that in exercise of power under Section 220 (6) of the Act, the ITO should not act as a mere tax gatherer but as a quasi-judicial authority vested with the power of mitigating hardship to the assessee. More so, in the case of Gajanand Agencies v. ITO [1994] 121 CTR (Ker), it was held that ITO directing payment of demand instalments is only another mode of recovery and cannot be treated as on order under Section 220 (6). A prima facie being made out, the order of ITO and CIT was set ....
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....the Assessing Officer to extend the time for payment or allow payment by instalments, while Section 220 (3) of the Act gives power to Chief Commissioner or Commissioner to reduce or waive the amount of interest paid or payable by the assessee subject to three conditions, as enumerated thereunder. Sub-Section (7) of Section 220 makes a departure from sub-Section (6), and in cases where assessee has been assessed in respect of income arising outside India in the country, the laws of which prohibit or restrict the remittance of money to India, the Assessing Officer shall (as against words 'may' used in S.220 (6), here it is mandatory) not treat the assessee as in default of respect of that part of the tax which is due in respect of that amount of his income which, by reason of such prohibition or restriction, cannot be brought into India, and shall continue to treat the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removed. The words used in sub-Section (6) are "may" whereas the words used in sub-Section (7) are "shall". Where on account of prohibition in law against the remittance of money to India results in automatic protec....
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.... which even now holds the field and its spirit survives in all subsequent CBDT Circulars quoted above, and undoubtedly the same is binding on all the assessing authorities created under the Act. 54. The submissions of the learned counsel for the petitioner that Income Tax Act does not provides for any pre-deposit of portion of disputed demand of tax unlike other enactments like, Central Excise Act, Customs Act and Sales Tax laws of various States, is not really very relevant in the matter. Since, it is for the Parliament to enact the laws and make provisions and whether such requirement is there or not in the Income Tax Act, it is not for this Court to make any comment upon that. However, since this Court has already held that power to grant stay is inherent in the power to decide the appeal even by the first appellate authority, it is not necessary to further go into this submission. 55. Likewise, this Court would abstain from commenting upon the conspicuous absence of provision akin to Section 254 (2A) and (2B) conferring such powers to grant stay upon the Income Tax Appellate Tribunal purportedly brought in pursuance of judgment of the Hon'ble Supreme Court in the case of ....