VME Infrastructure Private Limited Vs ITO (Madras High Court)
Madras High Court has set aside an order by the Income Tax Officer (ITO) that mandated a 20% pre-deposit of tax for a taxpayer seeking interim relief pending an appeal. The court, in the case of VME Infrastructure Private Limited Vs. ITO, reiterated that assessing officers have the discretion to allow a lower deposit amount based on individual case facts, despite administrative circulars.
The petitioner, VME Infrastructure Private Limited, had filed an appeal against an assessment order before the Commissioner of Income Tax (Appeals). Concurrently, they sought interim relief from the Assessing Officer (AO) under Section 220(6) of the Income Tax Act, 1961. However, the AO declined to grant relief, insisting on the deposit of 20% of the disputed tax, citing instructions from the Central Board of Direct Taxes (CBDT). This denial led to the filing of the present writ petition.
The High Court referred to its earlier order dated April 8, 2021, in M/s. Queen Agencies Vs. The Assistant Commissioner of Income Tax (Circle -1) and another. This previous ruling had extensively discussed the Supreme Court’s clarification in Principal Commissioner of Income Tax Vs. LG Electronics India Private Limited (2018) 18 SCC 447.
