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2015 (12) TMI 1331 - MADRAS HIGH COURTWhen tax payable and when assessee deemed in default - powers under Sections 220(3) & 220(6) - validity of CBDT Instruction - Held that:- It is incorrect to state that DBDT Instruction No.1914, dated 02.12.1993 supersedes all previous instructions. Although instruction No.1914 specifically states that it is in supersession of earlier instructions, the position obtaining after the decision of the case in Volvoline Cummins Limited Vs. DCIT (2008 (5) TMI 20 - HIGH COURT OF DELHI ) is not altered at all. This is so, the DBDT Instruction No.95, dated 21.08.1969 was issued with the consent of the informal consultative committee held on 13th May, 1969 formed under the business rules of the Parliament, which even now holds the field. Hence, we are of the opinion that the tendency of making high pitched assessments by the Assessing Officer is not unknown and it may result in serious prejudice to the assessee and miscarriage of justice & sometimes may even result into insolvency or closure of the business if such power was to be exercised only in a pro-revenue manner. Hence, the powers under Sections 220(3) & 220(6) of IT Act have to be exercised in accordance with the letter and spirit of CBDT Instruction No.95 dated 21.08.1969, which is binding on all the assessing authorities created under the Act. Therefore, the impugned order passed by the respondent without considering CBDT Instruction No.95, dated 21.08.1969 is against the principles laid down in the judgments stated supra. In the absence of any specific bar to provide an opportunity in the provision, the respondent ought to have provided an opportunity to get absolute stay till the disposal of the appeal as well as in consideration of the reasons to treat the assessee as 'not being in default', in order to avoid interest and penalty. Whereas in this case the Assessing Officer had failed to provide an opportunity of being heard prior to disposal of the application under Section 220(3) for stay. Hence, the impugned orders are liable to be set aside. The respondent is directed to consider the petition filed by the petitioner under Section 220(3) and 220(6) of IT Act, in conformity with CBDT Instruction No.95, dated 21.08.1969, by providing an opportunity of being heard to the petitioner, and pass orders in accordance with law, as early as possible.
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