SACRED HEART MONASTERY vs. THE INCOME TAX OFFICER
What did the High Court hold?
The High Court of Kerala held that there should not be a recovery of amounts confirmed against the petitioner pending the disposal of the stay application by the 2nd respondent appellate authority. The Court directed the 2nd respondent to consider and pass orders on the stay petition (Ext.P6) within six weeks from the date of receipt of a copy of the judgment, after hearing the petitioner. The order of the 1st respondent (Ext.P8) was quashed, and the recovery of amounts confirmed by Exts.P3 and P4 was kept in abeyance until the 2nd respondent passed orders on the stay application and communicated the same to the petitioner. The ratio of this decision is that recovery proceedings should be halted until a stay application is decided by the appellate authority, especially when the initial demand for payment appears mechanical.
What were the facts?
The petitioner, Sacred Heart Monastery, filed an appeal (Ext.P5) along with a stay petition (Ext.P6) before the Commissioner of Income Tax (Appeals) - II (2nd respondent) against an assessment order (Ext.P3) and a rectified order (Ext.P4). While the stay petition was pending, the Income Tax Officer (1st respondent) directed the petitioner to remit 20% of the confirmed amount as a condition for a stay, which the petitioner considered a mechanical direction. The petitioner approached the High Court of Kerala by way of a writ petition, arguing that no recovery should be initiated pending the disposal of their stay application by the appellate authority.
What were the issues?
1. Whether the Income Tax Officer was justified in directing the petitioner to remit 20% of the confirmed amount as a condition for a stay, pending the disposal of the stay petition by the appellate authority? Assessee's Contention: The petitioner argued that the direction to deposit amounts by the 1st respondent was premature and mechanical, as their stay application was still pending before the 2nd respondent. They contended that recovery should not be initiated while the stay application is under consideration by the appellate authority. Revenue's Contention: The judgment does not record any specific contentions made by the revenue. However, the action of the 1st respondent implies a reliance on the general power to demand payment pending appeal, possibly under Section 220(6) of the Income Tax Act, 1961, which allows the Assessing Officer to require payment of tax even during pendency of appeal.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Against Ext.P3 assessment order and Ext.P4 rectified order under the Income Tax Act, the petitioner has preferred Ext.P5 appeal together with Ext.P6 stay petition before the 2nd respondent. It is the case of the petitioner that pending disposal of the stay petition by the appellate authority he had approached the 1st respondent with a petition under Section 220(6) of the Income Tax Act when the 1st respondent mechanically directed the petitioner to remit 20% of the confirmed amount as a condition for a grant of stay pending disposal of the appeal. In the Writ Petition, it is the case of the petitioner that the stay application is yet to be considered by the 2nd respondent, and under such circumstances, there ought not to have been a direction to deposit amounts pending disposal of the stay application by the appellate authority.
I have heard the learned counsel appearing for the petitioner and also the learned Government Pleader appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I am of the view that there should not be a recovery of amounts confirmed against the petitioner pending disposal of the stay application by the 2nd respondent appellate
WP(C).No.20240 OF 2020(D) 3 authority. Accordingly, I direct the 2nd respondent to consider and pass orders on Ext.P6 stay petition within six weeks from the date of receipt of a copy of this judgment, after hearing the petitioner. Ext.P8 order of the 1st respondent shall stand quashed and the recovery of amounts confirmed against the petitioner by Exts.P3 and P4 orders shall be kept in abeyance till such time as orders are passed by the 2nd respondent in Ext.P6 stay application as directed and the order communicated to the petitioner. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 2nd respondent, for further action. A.K.JAYASANKARAN NAMBIAR
JUDGE mns
WP(C).No.20240 OF 2020(D) 4
Appendix — schedule of exhibits
More judgments on Section 220(6)
- Ramji Vaish, Allahabad vs ACIT, AllahabadITA 371/ALLD/2018[2011-12]Status: Disposed9 Jun 2026AY 2011-12
- Vijay Stone Product, Sonebhadra vs Asstt. Commissioner of Income Tax, Central…ITA 4/ALLD/2019[2011-12]Status: Disposed10 Mar 2026AY 2011-12
- Susi Charitable Trust, Khurda vs The Commissioner of Income Tax(Exemption)…ITA 582/CTK/2025[2026-27]Status: Disposed4 Dec 2025AY 2026-27
- Jayant Security and Finance Ltd, Indore vs ACIT Central-2, BhopalITA 91/IND/2025[2017-18]Status: Disposed7 Jul 2025AY 2017-18
- Jayant Security and Finance Ltd, Indore vs ACIT Central-2, BhopalITA 90/IND/2025[2016-17]Status: Disposed7 Jul 2025AY 2016-17
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