Madras High Court Directs Fresh Consideration of Stay Applications under Section 220(6) (of Income Tax Act, 1961)

Case Name:

M/s. Metal Impex v. Assistant Commissioner of Income Tax, Central Circle 1 (1) Chennai & Commissioner of Income Tax (Appeals) - 18, Chennai (High Court of Madras)

Key Takeaways:

1. The High Court directed the first respondent to pass fresh orders in the stay applications filed, keeping in mind the ‘Trinity’ principles laid down by the Court in previous cases.

2. The impugned orders dated 12.12.2022 for the assessment years 2014-15, 2016-17, and 2020-21 were set aside, and the first respondent was directed to dispose of the stay applications within six weeks from the date of receipt of the court’s order.

3. Until the stay applications are disposed of, no further proceedings shall be taken against the petitioner.

4. The writ petitions stand disposed of with no order as to costs, and the connected miscellaneous petitions are closed.

Case Synopsis:

The provided is a legal order from the High Court of Judicature at Madras, dated 28.12.2022, pertaining to Writ Petition Nos. 34878, 34881, and 34883 of 2022 along with Writ Miscellaneous Petitions Nos. 34295, 34296, 34297, 34298, 34299, and 34301 of 2022. The petitioners, M/s. Metal Impex, represented by its partner Mr. Kamlesh Jain, filed these petitions against the Assistant Commissioner of Income Tax, Central Circle 1 (1) Chennai, and the Commissioner of Income Tax (Appeals) - 18, Chennai.

Key Details:

Petitioners: M/s. Metal Impex, represented by Mr. Kamlesh Jain

Respondents:

Assistant Commissioner of Income Tax, Central Circle 1 (1) Chennai Commissioner of Income Tax (Appeals) - 18, Chennai

Counsel:

For Petitioner: Ms. A. Niveditha

For Respondents: Mr. A.P. Srinivas, Senior Standing Counsel for Income Tax, assisted by Ms. Premalatha, Junior Standing Counsel for Income Tax

Purpose of the Petitions:

The petitions sought to quash the impugned orders related to the assessment years 2014-15, 2016-17, and 2020-21 and requested a stay of recovery of demand pending the disposal of the appeals.

Court’s Decision:

The High Court, in its common order, addressed the issue of whether the impugned orders of assessment passed under Section 220(6) (of Income Tax Act, 1961) during the pendency of appeals were vitiated for passing non-speaking orders. The Court considered the ‘Trinity’ principles set out in previous cases and directed the first respondent to pass fresh orders in the stay applications filed, keeping in mind these principles. The Court also instructed that the stay applications should be disposed of within a period of six weeks from the date of receipt of the court’s order. Until the stay applications are disposed of, no further proceedings shall be taken against the petitioner.

Conclusion:

The writ petitions stand disposed of with no order as to costs, and the connected miscellaneous petitions are closed.

FAQ:

Q1: What were the petitions about?

A1: The petitions sought to quash the impugned orders related to the assessment years 2014-15, 2016-17, and 2020-21 and requested a stay of recovery of demand pending the disposal of the appeals.

Q2: What was the court’s decision?

A2: The court set aside the impugned orders and directed the first respondent to pass fresh orders in the stay applications, considering the ‘Trinity’ principles laid down by the Court in previous cases.

Q3: What is the significance of the court’s decision?

A3: The decision provides relief to the petitioner by directing a fresh consideration of the stay applications, ensuring that no further proceedings shall be taken against the petitioner until the stay applications are disposed of.

These writ petitions have been filed to quash the orders dated 12.12.2022 pertaining to Assessment Years 2014-2015, 2016-2017 and 2020-2021 respectively, passed by the first respondent and to direct the first

respondent to grant stay of recovery of demand for Assessment Years 2014-2015, 2016-2017 and 2020-2021 respectively, pending disposal of the appeals preferred by the petitioner before the second respondent.

2. Mr. A.P. Srinivas, learned Senior Standing Counsel for Income Tax assisted by Ms. Premalatha, learned Junior Standing Counsel for Income Tax takes notice for respondents.

3. A short question that arises for consideration in all these writ petitions is as to whether the impugned orders of assessment passed under

Section 220(6) (of Income Tax Act, 1961) (43 of 1961) [hereinafter "IT Act" for the sake of brevity] during pendency of appeals, stand vitiated for passing non-speaking orders.

4. It is submitted by the learned counsel for the petitioner that it has been consistently held by this Court that an application under Section 220(6) (of Income Tax Act, 1961) ought to be decided by applying 'Trinity' principles set out in the case of Kannammal vs. Income Tax Officer, Ward 1(1), Tirupur reported in (2019) 413 ITR 390(Mad) and in the case of Queen Agencies Vs. The Assistant Commissioner of Income Tax, (Circle-1).

5. The learned Senior Standing Counsel for the respondents submits that the matter may be remanded back to the Assessing Officer for fresh consideration of stay applications under Section 220(6) (of Income Tax Act, 1961).

6. In view of the above, the impugned orders dated 12.12.2022 in respect of Assessment Years 2014-2015, 2016-2017 and 2020-2021 respectively are set aside and first respondent is directed to pass fresh orders in the stay applications filed, keeping in mind the 'Trinity' principles laid down

by this Court in the case of Queen Agencies and in the case of Kannammal.

The stay applications shall be disposed of within a period of six weeks from

the date of receipt of a copy of this order. Until the stay applications are

disposed of, no further proceedings shall be taken against the petitioner.

7. With the above directions, all these writ petitions stand disposed of. There shall be no order as to costs. Consequently, connected miscellaneous

petitions are closed.

28.12.2022