INCOME TAX ACT, 1961

Section 220(6)

Recovery - Stay - Validity - Stay application disposed of without giving notice and without providing any opportunity of being heard to assessee

Assessee-company challenged the assessment order passed by AO. Accordingly, the assessee filed an application before the AO seeking stay of assessment order however, the same was rejected. Thereafter, the assessee filed an application for stay before PCIT under section 246A. Since no order was passed by the PCIT, the assessee approached the High Court by filing an instant writ petition with a prayer to quash the assessment order. Assessee submitted that whilst the said writ petition was pending consideration, the PCIT passed an order directing it to deposit 20% of the tax amount in six installments and the said order was passed without notice and without providing any opportunity of being heard to it. Held: Admittedly, an application was filed before the PCIT seeking stay of assessment order and the same was disposed of without hearing the assessee. Generally, in all cases, an application filed before any quasi-judicial authority is required to be heard before any orders are passed and more so, in the case of this nature, where the assessee becomes liable to pay huge taxes. Accordingly, the PCIT was directed to grant an opportunity to the assessee to put forth its case so far as the application for stay was concerned. Further, the PCIT was directed to dispose of the said application within a period of four weeks from the date of the petitioner's appearance. Further, no coercive steps to recover the tax amount should be initiated till PCIT would pass his order.

REFERRED :

FAVOUR : Directions issued

A.Y. :

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