2023 (4) TMI 1214 - HC - Income Tax

Stay of recovery of demand - application of Trinity principles - whether the impugned orders of assessment passed u/s 220(6) during pendency of appeals stand vitiated for passing non-speaking orders? - as submitted by petitioner that it has been consistently held by this Court that an application u/s 220(6) ought to be decided by applying Trinity principles set out in the case of Kannammal vs. Income Tax Officer Ward 1(1) Tirupur 2019 (3) TMI 1 - MADRAS HIGH COURT and in the case of Queen Agencies Vs. The Assistant Commissioner of Income Tax (Circle-1) 2021 (4) TMI 609 - MADRAS HIGH COURT ? - HELD THAT - The impugned orders in respect of Assessment Years 2014-2015 2016-2017 and 2020-2021 respectively are set aside and first respondent is directed to pass fresh orders in the stay applications filed keeping in mind the Trinity principles laid down by this Court in the case of Queen Agencies and in the case of Kannammal. The stay applications shall be disposed of within a period of six weeks from the date of receipt of a copy of this order. Until the stay applications are disposed of no further proceedings shall be taken against the petitioner.

Summary

Issues:
Quashing of assessment orders, Stay of recovery of demand pending appeal, Validity of assessment orders under Section 220(6) of the Income-tax Act, 1961

Quashing of Assessment Orders:
The writ petitions were filed to quash orders dated 12.12.2022 related to Assessment Years 2014-2015, 2016-2017, and 2020-2021 passed by the first respondent. The main contention was to direct the first respondent to grant a stay of recovery of demand pending the disposal of appeals before the second respondent.

Stay of Recovery of Demand Pending Appeal:
The key question in these writ petitions was whether the impugned assessment orders passed under Section 220(6) of the Income-tax Act, 1961, during the pendency of appeals, were vitiated for passing non-speaking orders. The petitioner argued that the application under Section 220(6) should be decided by applying the 'Trinity' principles established by previous court decisions.

Validity of Assessment Orders under Section 220(6) of the Income-tax Act, 1961:
The court considered the submissions from both parties. The learned Senior Standing Counsel for the respondents suggested remanding the matter back to the Assessing Officer for fresh consideration of stay applications under Section 220(6) of the Income-tax Act. The court set aside the impugned orders and directed the first respondent to pass fresh orders on the stay applications, adhering to the 'Trinity' principles laid down in previous court cases. The stay applications were to be disposed of within six weeks, and no further proceedings were to be taken against the petitioner until then.

Conclusion:
The court disposed of all writ petitions with the direction for fresh consideration of stay applications under Section 220(6) of the Income-tax Act, following the 'Trinity' principles. No costs were awarded, and connected miscellaneous petitions were closed as a result of the judgment.