PRADEEP RATANSHI VS ASSISTANT COMMISSIONER OF INCOME-TAX, 1998 PTD-KERALA-HIGH-COURT-INDIA 839 (1996)

Income-tax---

----Recovery of tax---Appeal---Petition for stay of collection of tax filed before CIT (Appeals)---Meanwhile revenue recovery proceeding initiated-- CIT on petition by assessee passing order under S.220(6) allowing payment in instalments---Order of CIT was without jurisdiction as discretion under S.220(6) can be exercised by Assessing Officer only---Stay petition before CIT (,Appeals) to be disposed of expeditiously--- Recovery proceedings to be stayed till disposal of stay petition---Indian Income Tax Act, 1961, S.220(6).

The assessee filed an appeal before the Commissioner of Income-tax (Appeals) with a petition for stay of recovery of the amount of tax. Later, the assessee filed before the Commissioner of Income-tax a petition purporting to be under section 220(6) of the Income Tax Act, 1961. An order was passed on the petition by the Commissioner of Income-tax directing the assessee to pay 50 per cent. of the demand and pay the balance in five equal monthly instalments. Recovery proceedings were initiated by the Revenue. The assessee filed a writ petition contending that he had filed a petition before the Commissioner of Income-tax (Appeals) requesting for an early disposal of his appeal, and that if the revenue recovery proceedings were allowed to continue without even the stay petition being disposed of it would cause irreparable damage to him:

Held, that a reading of section 220(6) shows that the discretion to be exercised under the section can only be exercised by the Assessing Officer and not by the Commissioner of Income-tax. The order passed by the Commissioner of Income-tax was without jurisdiction.

[The Commissioner of Income-tax (Appeals) was directed to dispose of the stay petition expeditiously and till its disposal, the recovery proceedings were to stand stayed.]

K.M.V. Pandalai for Petitioner.

P.K.R. Menon, Senior Advocate and N.R.K. Nair for Respondent.

JUDGMENT

The petitioner, on being assessed to income-tax for the year 1992-93 by Exh. P-2 assessment order, filed an appeal with the third respondent in Exh. P-3 on April 5, 1995, and also filed a stay petition Exh.P-3(a) for stay of the recovery of the amount of tax covered by Exh.P-2. It is now stated that the petitioner later on April 10, 1995, filed Exh. P-4 before the Commissioner of Income-tax Ernakulam, purporting to be a petition under subsection (6) of section 220 of the Income Tax Act, 1961. The Commissioner of Income-tax on the said petition passed an order Exh. P-5 directing the .petitioner to pay 50 per cent. of the demand by July 31, 1995, and the balance in five equal monthly instalments from August, 1995. The petitioner now submits that recovery proceedings have also been initiated by Exh. P-6. On receipt of the revenue recovery notice he has also filed a petition Exh. P-7 before the third respondent requesting him to dispose of his appeal at an early date as any delay in the said disposal will cause prejudice.

I have heard counsel for the petitioner and standing counsel for the Income-tax Department and perused the records. In my view, the order Exh.P-5 passed by the Commissioner of Income-tax is one without jurisdiction. It is not in dispute that the petitioner filed a petition under subsection (6) of section 220 requesting the Commissioner of Income-tax not to treat him as a defaulter and on that request Exh. P-5 came to be passed. A reading of subsection (6) of section 220 will show that the discretion to be exercised under the said subsection can only be exercised by the Assessing Officer and not by the Commissioner of Income-tax: As the order was passed by the Commissioner of Income-tax without jurisdiction, I am of the view that the order Exh. P-5 has to be set aside and accordingly it is set aside.

Counsel for the petitioner now submits that though he has filed the appeal on April 5, 1995, and also the stay petition on the same day, they were not disposed of by the appellate authority, the third respondent herein, and in the meantime revenue recovery proceedings have also been initiated against him. He further submits that in spite of his request made to the appellate authority by Exh. P-7 to dispose of his appeal, the appeal is not .taken up and no orders on the stay petition are also passed. He submits that he has a fair chance of success in the appeal and if the revenue recovery proceedings are allowed to continue without even the stay petition being disposed of, it will cause irreparable damage and harm to the cause of the petitioner. I see some force in the contention of the petitioner.

On the facts and circumstances of the case, I feel that there can be a direction to the third respondent to dispose of the stay petition filed by the. petitioner as expeditiously as possible and till the disposal of the said stay petition, the revenue recovery proceedings initiated against the petitioner for the recovery of the tax covered by Exh. P-2 will stand stayed.

This original petition is disposed of with the above directions.

M.B.A./1281/FCOrder accordingly.