INCOME TAX ACT, 1961

Section 220(6)

Recovery - Stay of demand - Stay order did not consider merits of case and passed acting on dictates of CBDT -

Aggrieved by assessment order, assessee-company filed an appeal together with stay petition before CIT (A). CIT (A) disposed the said stay petition by mechanically directing the assessee to pay 20% of the disputed amount as a pre-condition for stay of the balance amount confirmed against the assessee, pending disposal of the appeal. Aggrieved, assessee filed a petition before High Court contending that the CIT (A) erred in passing the stay order without considering the merits of the case but by merely relying on CBDT Circulars. Held: It was concluded that the stay order passed by CIT (A) could not be legally sustained inasmuch as it did not consider the merits of the assessee's case in the appeal, and further the said order was passed under dictation based on the instructions issued by the CBDT. Further, as a quasi-judicial authority, the CIT (A) could not see his discretion as fettered by the directions issued by the CBDT, especially when he was performing an adjudicatory function. Accordingly, the stay order passed by the CIT (A) was quashed and he was directed to consider and pass order on appeal within an outer time limit of six months. Further, it was also concluded that the recovery steps for recovery of amount confirmed against the assessee in assessment order would be kept in abeyance till disposal of appeal by the CIT (A).

REFERRED :

FAVOUR : Stay granted/In assessee's favour

A.Y. :

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