TMI Blog2012 (8) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... taking into account other circumstances depending on the facts of the given case. It is a cardinal principle of construction that when a legislation confers power, its amplitude cannot be cut down by instructions or rules or regulations made by subordinate authorities. Instructions and Rules can only supplement but can never supplant or limit the width of the statutory powers - In this case, the AO as is evident from a reading of the impugned order has not applied his mind at all to the facts much less considered what are the circumstances which either justify the grant of relief or its refusal. Furthermore, even the petitioner does not appear to have been given any opportunity to make even a briefest submission in support of its case - wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in default for non-compliance with Section-194H of the Income Tax Act. The petitioner responded to the notice on 23.1.2012. Ultimately, by the order dated 28.3.2012, the AO rejected the petitioner s contentions and imposed a TDS liability for the sum of Rs.3,78,88,166/- under Section 194H and also demanded Rs.4,13,440/- on account of defaults; proceedings under Section-271C of the Act were also initiated. 4. The Writ Petitioner preferred an appeal under Section-246A before the CIT (A) and during the pendency of those proceedings, moved an application for stay before the AO under Section 220 (6), on 2.7.2012. 5. On 19.7.2012, the AO by an unreasoned order which was not preceded by any hearing, rejected the application under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy especially with a higher authority i.e. the administrative Commissioner of Income Tax can be approached for suspension of the default demand. In this regard, counsel relied upon certain instructions and Circular, notably, the CBDT s letter dated 21.08.1969 F.No.1/6/69-ITCC- Instructions No.96). The said instructions read as follows: - Board s letter F.No.1/6/69-ITCC (Instruction No.96) Minutes of the 8th Meeting of the Informal Consultative Committee held on 13th May, 1969 Implementation of assurance given regarding stay of recovery in certain cases Sec. 220(6) of the IT Act, 1961 RECOVERY SECTIONS 220, One of the points that came up for consideration in the 8th Meeting of the Informal Consultative Committee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of. 2. Having regard to the proper and efficient management of the work of collection of revenue, the Board has considered it necessary and expedient to order that on an application being filed by the assessee in this behalf, the Assessing Officer will exercise his discretion u/s 220(6) of the Act (subject to such conditions as he may think fit to impose) so as to treat the assessee as not being in default in respect of the amount in dispute in the appeal in the following situations: (i) the demand in dispute has arisen because the Assessing Officer had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or exercise of AO s discretion under S. 220(6) of the IT Act, is prejudicial to those assessees who are not financially sound. 4. The matter has been considered by the Board. It has been decided to substitute paragraph 4 of the Circular No.530 by the following paragraph. In respect of other cases not covered by paragraph 2 above, the AO, while considering the situation for treating the assessees to be not in default, would consider all relevant factors having a bearing on the demand raised and communicate his decision to the assessee in the form of a speaking order. 10. Section-220 (6) of the Income Tax Act reads as follows: - (6) Where an assessee has presented an appeal under section 246, the [Assessing] Officer may, in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tunity to make even a briefest submission in support of its case. 12. This Court is reinforced in the view that it has expressed with regard to the correct interpretation of Section-220 (6) by the previous ruling in KLM Royal Dutch Airlines case (supra) which pertinently had stated that: - In the circumstances of the case, we are of the view that rather than to fall back on the reasoning in the assessment order, even keeping its close proximity so far as time is concerned, it would be better that the order refusing stay under Section 220(6) of the Income-Tax Act must be a composite order. That is, it must also specifically deal with the existence of prima facie case. On this technicality the impugned order is set aside .. 13. F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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