Madras High Court
Mudalaipatti Kunnudaiyan ... vs / on 7 November, 2024
W.P.(MD) No.25909 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 07.11.2024
CORAM:
THE HONOURABLE MR.JUSTICE K.KUMARESH BABU
W.P.(MD) No.25909 of 2024
and
W.M.P.(MD) No.21975 of 2024
Mudalaipatti Kunnudaiyan Muthukrishnan ... Petitioner
/vs./
Income Tax Officer,
Ward 1(1),
Trichy ... Respondent
PRAYER: Writ Petition filed under Article 226 of the Constitution of India for
issuance of Writ of Certiorari, calling for the records of the respondent contained
in impugned order issued vide DIN and Letter
No.ITBA/COM/F/17/2024-25/1066983873(1) dated 24.07.2024 for the
assessment year 2016-17 passed by the respondent quash the same as arbitrary
unjust and illegal.
For Petitioner : Mr.Mansoor Ilahi
For Respondent : Mr.N.Dilip Kumar
Standing Counsel
1/8
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W.P.(MD) No.25909 of 2024
ORDER
The writ petition has been filed for the issue of a Writ of Certiorari to call
for the records of the impugned order vide letter
No.ITBA/COM/F/17/2024-25/1066983873(1) dated 24.07.2024 of the
respondent for the assessment year 2016-17 and to quash the same.
2. The learned counsel for the petitioner would vehemently contend that the
order impugned is a non speaking order without assigning any reasons. He would
submit that an assessment order was passed by the respondent herein on
26.06.2024, against which the petitioner had preferred an appeal.
3. The learned counsel for the petitioner would further submit that the
respondent had also invoked the powers of the Assessing Officer under Section
220(6) of the Income Tax Act, 1961 (herein after referred to as Act) and that the
petitioner had therefore filed an application for grant of absolute stay of the
proceedings before the Assessing Officer himself, by relying upon various
judgments which would be applicable to the facts of the case, but however
without considering any of them, the respondent had rejected the petition by
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holding that the petitioner had not paid 20% of the disputed amount as per the
instructions given by the Board on 31.07.2017. He would submit that the circular
does not stipulate the payment by pre-condition of the 20% of the disputed
amount and that the circular only indicates that the condition can be given for
grant of stay. He had also relied upon the judgment of this Court in W.P.(MD) No.
5550 of 2020 (Queen Agencies Vs. Assistant Commissioner of Income Tax,
(Circle-1) and W.P.No.3849 of 2019 (Kannammal Vs. Income Tax Officer) and
therefore, he prayed this Court to set aside the impugned order.
4. Countering his argument, Mr.N.Dilip Kumar, learned standing counsel
for the respondent would contend that Section 220(6) of the Act does not clothe
the power to the Assessing Officer to grant stay of the proceedings. He would
draw attention of this Court to Section 220(6) of the Act and would contend that
the power that had been vested with the Assessing Officer is only not to treat the
assessee as being in default in respect of the amount in dispute in the appeal,
however on condition he may lay down in its discretion.
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5. He would further submit that the power for grant of stay would only be
available with the appellate authority and that when an order is passed, the
Authority becomes functus officio and that the authority who had passed the order
cannot itself stay its own order. He would further contend that even for grant of
protection of, not to treat the assessee as being in default, the petitioner ought to
have given reasons as to why such order is required to be made in his favour. He
would further submit that the petitioner has not adduced any such reasons in the
said application and therefore, the petitioner is not entitled for any relief
whatsoever and seek this Court to dismiss the above writ petition.
6. Heard the learned counsel on either side and perused the records.
7. Admittedly, the petitioner had filed an appeal as against the order of
assessment issued by the respondent. He had also taken out an application under
Section 220(6) of the Act. The respondent herein had passed the impugned order.
Reading of the impugned order refers to a circular, which provides that the
Assessing Officer shall grant a stay of demand till the disposal of the first appeal
on payment of 20% of the disputed demand. It is to be noted that the power that
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had been vested with the assessing officer is only a power to treat the assessee as
not being in default in respect of the amount in dispute in the appeal.
8. A learned single Judge of this Court in W.P.(MD) No.5550 of 2020 had
categorically held that such order passed under Section 220(6) of the Act would
only hold good and will have to give way as and when the appellate authority
passes an order on the stay petition filed by the aggrieved assessee. The
nomenclature stay used in the circular would only mean the powers that is vested
with him. The reason for me for coming to such conclusion is that the power to
grant stay is a power that is incidentally available to the appellate authority as
held by the Hon'ble Apex Cuort in the judgment reported in (1969) 71 ITR 815
(ITO Vs M.K.Mohammed Kunhi)
9. As rightly pointed out by the learned Standing Counsel, even the
application filed by the petitioner before the respondent for grant of stay is bald
and bereft of any material facts and even if the circular is to be made applicable,
then the respondent could have invoke his power under Section 220(6) of the Act
by directing the petitioner to deposit the sum equivalent to 20% of the disputed
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amount in appeal. Further, the impugned order does not specify any reason as to
why the petitioner was not entitled for the relief under Section 220 (6) of the Act.
Since I found that the impugned order is a non speaking order, I am inclined to
interfere with the same.
10. In fine, the order impugned issued vide letter
No.ITBA/COM/F/17/2024-25/1066983873(1) dated 24.07.2024 passed by the
respondent is set aside and the matter is remitted back to the respondent by
treating the application as one under Section 220(6) of the Act and pass
appropriate orders on merits and in accordance with law.
11. The petitioner shall also file a supplementary petition containing the
additional particulars and contentions in support of his claim within a period of
two weeks from the date of receipt of a copy of this order. On receipt of such
application, the respondent shall consider the same and pass appropriate orders
within a period of four weeks thereafter.
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12. With the aforesaid directions, the Writ Petition stands allowed.
However, there shall be no order as to costs. Consequently, connected
Miscellaneous Petition is closed.
Index : Yes / No 07.11.2024
Internet : Yes / No
mm
Note : Issue order copy on 11.11.2024
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K.KUMARESH BABU, J.
mm
07.11.2024
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