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2016 (3) TMI 180 - ALLAHABAD HIGH COURT

2016 (3) TMI 180 - ALLAHABAD HIGH COURT - [2016] 387 ITR 268 - Recovery proceedings - When tax payable and when assessee deemed in default - remedy under Section 220 - Held that:- The scheme of the Act provides a specific remedy under Section 220 (6) and the same having not been invoked by the petitioner in the present case, does not entitle him to the protection as has been prayed for on the ground of mere pendency of the appeal or till the disposal of interim stay application. From the perusal .....

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or before the assessing authority, therefore, the Court has no choice except to interpret the intention of legislation from its plain reading. In civil disputes Order XLI Rule 5 and 6 Code of Civil Procedure, 1908 specifically confer jurisdiction on the appellate court or the court passing the decree for stay of orders/decree appealed against or for imposing conditions to secure the ends of justice. The benefit of Section 144 CP.C. is also available to a litigant in all judicial proceedings, the .....

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pellate stage, can also not be held to be arbitrary and reading a principle contrary to the intention of Section 220 (6) amounts to adding something in the appellate jurisdiction which the law neither expressly nor by implication does provide. - In the circumstances of the case, we leave it open to the petitioner to approach the assessing officer under Section 220 (6) of the Act within a period of two weeks from today and in case any application is filed by the petitioner before the assessin .....

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2-2016 - Amreshwar Pratap Sahi And Attau Rahman Masoodi, JJ. For the Appellant : Pradeep Agrawal For the Respondent : Manish Misra JUDGMENT ( Delivered by Hon'ble A. R. Masoodi, J. ) Heard Sri Pradeep Agarwal, learned counsel for the petitioner and Sri Manish Misra, learned counsel who has accepted notice on behalf of the respondents. By means of this writ petition, the petitioner has assailed the recovery notice issued by the assessing officer on 3.11.2015 in respect of the amount due for t .....

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61, it is argued that since the assessee has preferred an appeal against the assessment order, it is not open to the authorities to proceed with the recovery pursuant to the assessment order once the appeal is pending. This argument has been raised on the strength of Section 220 (6) of the Income Tax Act and the same is extracted below: "220 (6) Where an assessee has presented an appeal under section 246, the Assessing] Officer may, in his discretion, and subject to such conditions as he ma .....

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er, the difficulty has arisen due to the fact that the appellate authority not being empowered with the jurisdiction of granting interim stay under the appellate jurisdiction, can it be said that such a jurisdiction is either ancillary or incidental to the appellate power under Section 246 or 246-A particularly when Section 220(6) of the Act regulates the situation in a different manner. The assessing officer, it is provided under the Statute, while the appeal remains undisposed of, may impose t .....

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e failure on the part of the appellate authority to decide the appeal despite his cooperation. The intention of the statute is very clear to the extent that an assessee during pendency of an appeal has primarily to satisfy the assessing officer under Section 220(6) at the first instance for seeking deferment as regards the execution of an assessment order. In the present case, the petitioner admittedly has filed an appeal alongwith an application for interim stay but the fact remains that the pe .....

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rms of the law settled by this Court, the proposition that during pendency of an appeal, recovery proceedings have to be stayed during pendency of appeal or at least till the disposal of interim stay application, is inevitable. From a perusal of the aforesaid decisions, it is seen that the High Court has read the authority of dealing with the interim stay applications by the first appellate authority under Section 246 or 246-A, keeping in view the law laid down by the apex court in the case of I .....

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as incidental or ancillary to its appellate jurisdiction. The situation in the present case is different inasmuch as during pendency of an appeal under Section 246 or 246-A, the power of interim stay instead of being conferred upon the appellate authority is rather, vested with the assessing officer by virtue of Section 220 (6). The power conferred on the assessing officer in view of the aforesaid provision by its very nature, is discretionary but at the same time it is to be read so long as an .....

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uld prolong the proceedings due to non-cooperation of the assessee like in the present case where appeal is pending since last about a year. It is not the case of the petitioner that he has filed any application under Section 220 (6) of the Act for seeking an order of interim stay within the scope of said provision but what is argued is that the assessee once having exercised the right of appeal, is entitled to a protection of not being treated to be an assessee in default as a natural consequen .....

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stay application. From the perusal of impugned notice dated 3.11.2015, we do find that the assessing authority has not considered the aspect of the pendency of appeal nor the grievance raised by the petitioner to this effect has been considered in accordance with law but at the same time it is found that the petitioner has not brought any material whatsoever to the knowledge of the assessing authority. Although the petitioner has also made a reference to some circulars issued by CBDT but the sam .....

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t in all judicial proceedings, therefore, the exclusion of power of interim stay at the first appellate stage under Income Tax Act, 1961 has to be read in the manner provided for in Section 220 (6) of the Act but not otherwise. The provisions of Section 144 C.P.C. may not be applicable to the proceedings under the Income Tax Act, 1961 but the principles do apply. It is true that an appeal is the continuity of proceedings but the legislative intention of securing the interest of revenue by imposi .....

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the apex court judgement incorporating any such provision which may authorise the appellate authority at the stage of proceedings under Section 246 or 246-A to pass an interim stay order. The position of law becomes further doubtful when it is noticed that the writ petition in the case of Prem Prakash Tripathi (supra) was dismissed, as such a direction issued therein becomes binding merely between the parties and is not a judgement in rem. On the other hand, looking to the scheme of the Act and .....

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