M S SN ENVIRO TECH PRIVATE LIMITED vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

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W.P.(C)/5069/2026HC DelhiDLHC01015731202616 April 2026Author: HON'BLE MR. JUSTICE DINESH MEHTA,HON'BLE MR. JUSTICE VINOD KUMAR3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court held that the petitioner ought to pursue their remedy before the Pr.CIT/CIT in terms of Clause 4(c) of the CBDT Circular dated 29.02.2016. The Court noted that the objection regarding the availability of the review remedy before the Pr.CIT/CIT was not brought to the notice of the coordinate bench in the cited case of Clearmedi Healthcare (P.) Ltd., and no adjudication was made on this point in that judgment. Therefore, the Court directed that if the petitioner prefers a review application within two weeks from the date of the order, the concerned Pr.CIT/CIT shall consider it in accordance with law. The Court clarified that the Pr.CIT/CIT shall not be influenced by the rejection of the writ petition, as the merits of the petitioner's case were not examined by the High Court. The petition was disposed of with these observations.

What were the facts?

The petitioner, M/s SN Enviro Tech Private Limited, filed a writ petition challenging the order dated 05.01.2026 passed by the Assistant Commissioner of Income Tax (AO). This order rejected the petitioner's application for stay of demand under Section 220(6) of the Income Tax Act, 1961. The AO's rejection was based on CBDT Circulars dated 29.02.2016 and 31.07.2017, which typically require a deposit of 20% of the demand for a stay. The petitioner contended that the assessment order was illegal and that the AO failed to consider the merits of the case when deciding the stay application. The revenue argued that the CBDT circulars provide an alternative remedy of review before the Principal Commissioner of Income Tax (Pr.CIT)/Commissioner of Income Tax (CIT).

What were the issues?

1. Whether the Assessing Officer's rejection of the petitioner's stay application under Section 220(6) of the Income Tax Act, 1961, was valid, considering the petitioner's contention that the assessment order was illegal and the merits were not considered? 2. Whether the writ petition is maintainable when an alternative efficacious remedy of review is available before the Pr.CIT/CIT as per CBDT Circulars? Assessee's Arguments: The petitioner argued that the assessment order was illegal and that the AO's rejection of the stay application was invalid because the merits of the case were not considered. They relied on the judgment in Clearmedi Healthcare (P.) Ltd. v. Deputy Commissioner of Income-tax, Circle 4(2), Delhi [2025] 181 taxmann.com 947(Delhi), where a similar rejection of a stay request was set aside. Revenue's Arguments: The revenue contended that the CBDT Circulars dated 29.02.2016 and 31.07.2017, which governed the stay application, provide a remedy of review against the AO's decision before the Pr.CIT/CIT, as per Clause 4(c) of the Circular. Therefore, the writ petition should not be entertained.

Which sections of the Income-tax Act were involved?

Section 220(6)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~105 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 5069/2026 M S SN ENVIRO TECH PRIVATE LIMITED .....Petitioner Through: Mr. S.D. Singh and Mr. Siddharth Singh, Advs. versus THE ASSISTANT COMMISSIONER OF INCOME TAX .....Respondent Through: Mr. Puneet Rai, SSC CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

16.04.

2026

1.

By way of present writ petition, the petitioner has challenged the order dated 05.01.2026 passed by the Assessing Officer(AO) on petitioner’s application/request for stay of demand preferred under Section 220(6) of the Income Tax Act, 1961(hereinafter referred to as ‘the Act of 1961’).

2.

Learned counsel for the petitioner submitted that the assessing officer order has rejected petitioner’s stay application simply by relying upon the Central Board of Direct Taxes (CBDT) Circular dated 29.02.2016 and the circular dated 31.07.2017, which requires deposition of 20% of the requisite demand.

3.

He argued that the assessment order which was passed against the petitioner was absolutely illegal and unless the merit of the case is taken into This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/04/2026 at 14:04:06

account, the order under Section 220(6) cannot be said to be a valid order.

4.

Learned counsel for the petitioner also argued that the demand raised by the AO is per-se illegal and contrary to law.

5.

Mr. Puneet Rai, learned Senior Standing Counsel on the other hand argued that the CBDT circulars dated 29.02.2016 and 31.07.2017 based on which the petitioner had moved the application for stay, itself provides a remedy of review against decision of the AO which lies before the Pr. CIT/CIT as per the Clause 4(c) of the Circular.

6.

He submitted that since an efficacious remedy has been provided the writ petition should not be entertained.

7.

In rejoinder, learned counsel for the petitioner invited Court’s attention towards judgment in the case of Clearmedi Healthcare (P.) Ltd. v. Deputy Commissioner of Income-tax, Circle 4(2), Delhi [2025] 181 taxmann.com 947(Delhi) and submitted that in similar circumstances, the rejection of request of stay has been set aside by the coordinate Bench of this Court.

8.

Having heard, learned counsel for the parties and on going through the order passed in the case of Clearmedi Healthcare (P.) Ltd. (supra), we find that neither the objection regarding the remedy of review given under Circular 29.02.2016 was brought to the notice of the Division Bench nor has any adjudication been made in this regard.

9.

We are, therefore, of the view that the petitioner is required to take its remedy before the Pr.CIT/CIT in terms of Clause 4 (c) of the Circular dated 29.02.2016. 10. In case the petitioner prefers a review within a period of two weeks from today, the concerned Pr.CIT/CIT shall consider the same in accordance This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/04/2026 at 14:04:06

with law. While doing so, the Pr.CIT/CIT shall not be swayed by the rejection of instant writ petition, because we have not examined the merit of petitioner’s case.

11.

With these observations, the petition stands disposed of. DINESH MEHTA, J VINOD KUMAR, J APRIL 16, 2026/ss This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/04/2026 at 14:04:06

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