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TMI Blog1968 (1) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1961-62, he returned an income of Rs. 4,500, but the respondent added a sum of Rs. 58,000 and charged him to tax on a total income of Rs. 62,002. A demand was made on the assessee on March 28, 1966, for payment of the balance tax due, that is, Rs.32,282.10. Against the order of assessment, the assessee filed an appeal on April 8, 1966, and on the same day, his power of attorney applied for stay of collection of the tax pending disposal of the appeal. The respondent, by his order dated April 15, 1966, granted time till May 15, 1966, for payment of one-half of the tax demand and wanted security for the balance, so that the collection thereof might be stayed until the disposal of the appeal or a specified date, whichever was earlier. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner's orders aforesaid. Even then the assessee failed to pay any amount towards the tax arrears. In view of the default, the first respondent on January 11, 1967, levied a penalty of Rs. 1,500 for the persistent failure to pay the arrears or any part thereof. When the recovery proceedings were proceeded with, the assessee preferred objections thereto on certain grounds. By an order dated May 15, 1967, the Commissioner would appear to have permitted the assessee to pay the sum of Rs. 16,000 immediately and the holding over of the balance till July 30, 1967, or the disposal of the appeal, whichever was earlier, subject to the furnishing of adequate security. It is not in dispute even this chance was not availed of and the entire tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the time fixed in the demand notice for payment, apply for stay and the Income-tax Officer may on such application extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case. Where, however, the assessee has preferred an appeal under section 246, the Income-tax Officer is given the discretion to treat the assessee as not being in default in respect of the amount in dispute in the appeal, subject to such conditions as he may think fit to impose in the circumstances of the case. When a statute entrusts to an officer, who is a creature of such a statute, a discretion of that nature, it is obviously coupled with a duty to exercise it. The officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w and not humour ; it is to be not arbitrary, vague and fanciful, but legal and regular ; to be exercised, not capriciously, but on judicial grounds and for substantial reasons. And it must be exercised within the limits to which an honest man competent to the discharge of his office ought to confine himself, that is, within the limits and for the objects intended by the legislature. These dicta may be summed up in the statement of Lord Esher that the discretion must be exercised without taking into account any reason which is not a legal one. If people who have to exercise a public duty by exercising their discretion take into account matters which the courts consider not to be proper for the guidance of their discretion, then in the eye o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) is in his discretion to treat the assessee as not being in default in respect of the disputed amount in the appeal, but in a sense and in effect, when the Income-tax Officer treats an assessee as not being in default, it amounts to stay of collection of the amount in dispute. Sub-section (6), if regard is had to the language employed therein, does not in so many words say that the discretion entrusted to the Income-tax Officer is to be exercised in a particular manner and not in any other. Sub-section (6) specifically says that he may exercise his power in his discretion and subject to such conditions as he may think fit to impose in the circumstances of the case. That, in our opinion, gives a very wide scope to the discretion entrusted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk fit to impose in the circumstances of the case. But, in sub-section (6), the language employed is even wider and the discretion to be exercised is not limited to extension of time for payment on condition that it will be paid by instalments. It has not been suggested that the respondent or the officers higher up failed to take relevant circumstances or exercised their discretion arbitrarily. As we said, all that has been said for the petitioner is that under sub-section (6), the respondent has no option but to treat the assessee as not being in default in respect of the disputed amount on condition that he furnished security. We are unable to accept the contention for the reasons we have mentioned. The petition is dismissed with costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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