Masila Vs DCIT (Madras High Court)
The writ petition was filed seeking a writ of certiorarified mandamus to quash the respondent’s order dated 01.03.2022, which rejected the petitioner’s application dated 25.02.2022 seeking stay of demand under Section 220(6) of the Income Tax Act, 1961, and to direct the respondent to reconsider the application by passing a reasoned order.
The petitioner, a Paediatrics Therapist and Assistant Behaviour Analyst, filed the return of income for Assessment Year 2018-2019 on 05.10.2018, which was revised on 30.03.2019. According to the petitioner, the pre-assessment notice was not responded to as the petitioner was unaware of it. Consequently, the assessment was completed under Section 144 of the Income Tax Act, 1961 through an order dated 27.05.2021.
The petitioner preferred an appeal before the Commissioner of Income-Tax (Appeals) against the assessment order, and the appeal remained pending. During the pendency of the appeal, the petitioner was required to pay 20% of the demand amount and furnish Form 35 along with the grounds of appeal. In response, the petitioner submitted an application dated 25.02.2022 seeking stay of demand under Section 220(6), referring to the merits of the case and the financial difficulty faced. The respondent rejected the stay application.
The petitioner contended that the respondent rejected the application under Section 220(6) without considering the merits, even though the appeal against the assessment order was pending before the Commissioner of Income-Tax (Appeals). It was further submitted that the dispute related solely to the assessment order and that the stay application ought to have been considered during the pendency of the appeal.
The respondent submitted that pre-deposit is a condition precedent for hearing the appeal. It was also submitted that if the petitioner was facing financial hardship, the petitioner could approach the Commissioner of Income-Tax (Appeals) seeking permission to pay the deposit amount in installments.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition has been filed to issue a Writ of Certiorarified Mandamus and call for the records pertaining to the impugned order dated 01.03.2022 issued by the respondent and quash the same and direct the respondent to consider the application dated 25.02.2022 filed by the petitioner and pass a reasoned order.
2. Mrs. Hema Murali Krishnan, learned Senior Standing Counsel takes notice for the respondent. In view of the limited relief sought for in this petition, on the consent expressed by the Learned counsel appearing for either side, this petition is taken up for final disposal.
3. The case of the petitioner is that the petitioner is a Paediatrics Therapist and Assistant Behaviour Analyst. The petitioner had filed the Return of Income for the Assessment year 2018-2019 on 05.10.2018 and the same was revised on 30.03.2019. As the petitioner was not aware of the pre-assessment notice, the same was not responded and assessment was completed under Section 144 of the Income Tax Act, 1961 vide order dated 27.05.2021. As against the assessment order, the petitioner preferred an appeal before the Commissioner of Income-Tax (Appeals) and the same is pending. However, the petitioner was requested to pay 20% of the demand amount and also requested to furnish FORM 35 along with the grounds of appeal. In reply to the same, the petitioner made a reply dated 25.02.2022 seeking for stay of the demand in terms of Section 220(6) of the Income Tax Act, 1961 and communicated the merits of the case and the financial difficulty being faced by the petitioner. However, the respondent had rejected the application for stay of demand.
4. The learned counsel for the petitioner would submit that without considering the merits, the respondent had rejected the petitioner’s application made under Section 220(6) of the Income Tax Act, 1961. However, the petitioner’s appeal is pending before the Commissioner of Income-Tax (Appeals). Pending the appeal, the assessment authority raised a demand and directed the petitioner to pay 20% of the demand amount.
5. It is the further submission that, the dispute is purely as against the order passed by the assessment authority. Therefore, the petitioner preferred an appeal and the same is pending without any interim order. The respondent rejected the petitioner’s application made under Section 220(6) of the Income Tax Act, 1961.
6. The learned Senior Standing Counsel for the respondent submitted that pre-deposit is a condition precedent for hearing the appeal and if the petitioner faces any financial crunch the petitioner may approach the Commissioner of Income-Tax (Appeals) for paying the deposit amount in installments.
7. Taking into consideration the submissions, this Court is of the considered view that pre-deposit of an amount as a precondition for hearing the appeal cannot be said to be arbitrary or perverse. As rightly pointed out by the learned Senior Standing Counsel for the respondent, it is open to the petitioner to approach the Commissioner of Income-Tax (Appeals) for payment of the demand in installments and if such request is made, the Commissioner of Income-Tax (Appeals) may consider the same and pass orders in accordance with law.
8. This Writ petition stands dismissed with the aforesaid observation and direction. Consequently, connected Miscellaneous petitions are closed. No costs.
