TMI Blog1970 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... owing certain loans alleged to have been obtained from different persons. The Income-tax Officer assessed the income including these alleged loans as income from sources undisclosed as he disbelieved the version of the petitioner that these were loans. The petitioner preferred an appeal before the Appellate Assistant Commissioner. In the meantime it appears that the Income-tax Officer had forwarded a certificate to the Tax Recovery Officer and the Tax Recovery Officer had issued a notice under rule 2 of Schedule II of the Income-tax Act, 1961. The petitioner had also prayed to the Income-tax Officer for grant of a stay of realisation until the disposal of the appeal before the Appellate Assistant Commissioner. On June 29, 1968, the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate for the petitioner, that the Income-tax Officer has a discretion which must be exercised for keeping the demand stayed for " so long as the appeal remains undisposed of ". He can of course impose conditions for keeping the demand stayed up to that period. The Income-tax Officer can also refuse in a proper case to exercise the discretion. Here, it is apparent that the Income-tax Officer thought it fit that stay should be granted. He did not impose any condition in granting the stay that the petitioner should proceed diligently with the hearing of the appeal. It is not also the case that the appeal has not been heard due to any conduct on the part of the petitioner. Therefore, it appears to me that when there was a subsequent application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. Mr. Subas Chandra Sen, appearing on behalf of the revenue, drew my attention to the observations of the Supreme Court in the case of Third Income-tax Officer, Mangalore v. Damodar Bhat. Mr. Sen drew my attention to the observations appearing at page 814 of the report where it was stated that, unless the particulars were given that the discretion was exercised in an arbitrary or capricious manner, the court should not interfere with the exercise of the discretion of the Income-tax Officer under section 220(6) of the Act. In this case, however, it appears to me from the order itself that the discretion has not been exercised on a correct principle. Furthermore, in this case failure to deal with the application for extension also, in my op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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