The Calcutta High Court while citing Supreme Court’s judgment said that the administrative circular will not operate as a fetter on the Commissioner.
Facts
The petitioner is aggrieved by the order dated 7th February, 2023 passed by the Assessing Officer directing the petitioner to pay 20% of the tax demand and then file a stay petition for granting stay on tax demand.
Submissions
The petitioner submitted that the petitioner filed an application under Section 246 of the Income Tax Act, 1961 annexed all the documents in support of his prayer. The Assessing Officer, without considering the relevant documents passed an absolutely non-speaking mechanical order, giving no reason as to why the prayer of the petitioner cannot be allowed.
The counsel for the respondent submitted that in view of the amended provision of the Income Tax, it is mandatory to deposit 20% of the tax amount prior to the appeal being heard.
It has further been submitted that there is a provision for preferring review against the order passed. The ratio laid down in the matter of L. G. Electronics will not be applicable in view of the amended provision of law. Reference has also been made to the latest circular of the CBDT.
Decision
The single judge bench of Justice Amrita Sinha noted that the Supreme Court while dealing with a similar provision has specifically laid down that the administrative circular will not operate as a fetter on the Commissioner. The Court further clarified that in all cases it will be open to the authorities, on the facts of the individual cases, to grant deposit orders of lesser amount than 20%, pending appeal.
The court said that the respondent authority will be bound by the clarification in the said order of the Supreme Court.
It was held by the court that the impugned rejection does not reflect that the grounds mentioned in the application under Section 220 (6) of the Income Tax Act, 1961 was at all considered by the Assessing Officer. The order appears to be passed in a mechanical manner upon non application of mind.
The court directed the Assessing Officer to revisit the issue in the light of the order passed by the Supreme Court in the matter of L.G. Electronics and upon considering the documents submitted by the assessee.
Case title: Manish Lakhotia v/s Income Tax Officer & Ors.
Citation: WPA 378 of 2023
