This Provision Came Up For Consideration Before The Hon'ble Supremecourt In The Decision Reported In Air 1969 Sc 430 (The Income Taxofficer, Cannanore v. Court Specifically Observed That The Power Under Section 220(6) Ofthe Act Is Power Of Stay By Treating The Assessee As Not Being Indefault During The Pendency O

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURTReserved on : 01.04.2021 Pronounced on : 08.04.2021 CORAM THE HONOURABLE MR.JUSTICE G.R.SWAMINATHANWP(MD)No.5550 of 2020 and WMP(MD)Nos.4853, 4854 & 4855 of 2020 M/s.Queen Agencies,Rep.by its Managing Director ... Petitioner Vs.1.The Assistant Commissioner of Income Tax (Circle-1), Income Tax Office, Ground and First Floor, Sekkalai Street, Karaikudi – 630 002. 2.Canara Bank, Rep.by its Manager, No.12 A, Mohammed Sadak Center, Opp.to Government Hospital, GH Road, Ramanathapuram – 623 501. ...Respondents Prayer: Writ petition is filed under Article 226 of the Constitutionof India, to issue a Writ Certiorari, to call for the records of theimpugned demand notice in PAN : in DIN & LetterNo.ITBA/COM/F/17/2019-20/1024797229(1) dated 06.02.2020 from thefiles of the first respondent herein, quash the same. For Petitioner : Mrs.Aparna NandakumarFor Respondents : Mrs.S.Srimathy for R1 Mr.C.Karthik for R2 ORDER The petitioner is one of the major distributors of ITC productsin Ramanathapuram District. The petitioner is a partnership firmand is an assessee on the file of the first respondent. Survey wasconducted under Section 133 A of the Income Tax Act, 1961 on05.12.2017 and based on the same, the petitioner's assessment forthe assessment years 2015-16 and 2016-17 were sought to be re-opened. According to the petitioner, after giving a quietus to theissue, notice was issued for the second time under Section 143(2) ofthe Act on 20.09.2018. Adverse orders were passed on 29.12.2018.Questioning the same, the petitioner has filed an appeal before theappellate authority, namely, the Commissioner of Income Tax(Appeals), Madurai. Since recovery proceedings were initiated, thepetitioner submitted an application before the first respondenthttps://hcservices.ecourts.gov.in/hcservices/ under Section 220(6) of the Income Tax Act, 1961 so that thepetitioner may not be treated as an assessee in default till thedisposal of the appeal filed by the appellate authority. The firstrespondent directed the petitioner to pay 20% of the demandimmediately for stay and informed the petitioner that in the eventof non-compliance, necessary follow up action will be taken.Questioning the communication dated 06.02.2020, this writ petitioncame to be filed. 2.The learned counsel for the petitioner reiterated all thecontentions set out in the affidavit filed in support of the writpetition. Her foremost contention is that the first respondent haderred in not taking into account the Office Memorandum bearingF.No.1/6/69/-ITCC, dated 21.08.1969. Relying on the decision of theMadras High Court reported in [2019] 413 ITR 390(Mad) (Kannammal vs.Income Tax Officer, Ward 1(1), Tirupur), she contended that theparameters laid down for consideration of a stay application havealso been totally ignored. She also contended that the impugnedorder is vulnerable in view of its non-speaking nature. 3.The learned standing counsel for the first respondent wouldsubmit that the impugned order is in conformity with the latestcircular issued by the Central Board of Direct Taxes vide OfficeMemorandum (F.No.404/72/93-ITCC), dated 31.07.2017 r/w. O.MNo.404/72/93-ITCC dated 29.02.2016. Since certain substantialquestions were raised, I requested Shri.N.Dilipkumar, the learnedstanding counsel also to assist this Court. 4.I carefully considered the rival contentions and went throughthe materials on record. The petitioner challenges the order passedby the Assessing Officer under Section 220(6) of the Income Tax Act,1961. The said provision reads as under : “When tax payable and when assessee deemed indefault... 3.The learned standing counsel for the first respondent wouldsubmit that the impugned order is in conformity with the latestcircular issued by the Central Board of Direct Taxes vide OfficeMemorandum (F.No.404/72/93-ITCC), dated 31.07.2017 r/w. O.MNo.404/72/93-ITCC dated 29.02.2016. Since certain substantialquestions were raised, I requested Shri.N.Dilipkumar, the learnedstanding counsel also to assist this Court. 4.I carefully considered the rival contentions and went throughthe materials on record. The petitioner challenges the order passedby the Assessing Officer under Section 220(6) of the Income Tax Act,1961. The said provision reads as under : “When tax payable and when assessee deemed indefault... 220.(6)Where an assessee has presented an appealunder section 246 or section 246A the AssessingOfficer may, in his discretion and subject to suchconditions as he may think fit to impose in thecircumstances of the case, treat the assessee as notbeing in default in respect of the amount in disputein the appeal, even though the time for payment hasexpired, as long as such appeal remains undisposedof.” This provision came up for consideration before the Hon'ble SupremeCourt in the decision reported in AIR 1969 SC 430 (The Income TaxOfficer, Cannanore vs. M.K. Mohammed Kunhi). Though the decision iscited as an authority for the proposition that the appellatetribunal must be held to have the power to grant stay as incidentalor ancillary to its appellate jurisdiction, the Hon'ble Supremehttps://hcservices.ecourts.gov.in/hcservices/ Court specifically observed that the power under Section 220(6) ofthe Act is power of stay by treating the assessee as not being indefault during the pendency of appeal. 5.The question for consideration is how this power is to beexercised by the Assessing Officer. The Board has issued Circularsfrom time to time. Instruction No.95 dated 21.08.1969 is theearliest circular issued for guiding the discretion of the AssessingOfficer. It reads as follows : “SECTION 220 OF THE INCOME - TAX ACT, 1961 -COLLECTION AND RECOVERY OF TAX - WHEN TAX PAYABLE ANDWHEN ASSESSEE DEEMED IN DEFAULT – INCOME DETERMINED ONASSESSMENT WAS SUBSTANTIALLY HIGHER THAN RETURNEDINCOME - WHETHER COLLECTION OF TAX IN DISPUTE IS TO BEHELD IN ABEYANCE TILL DECISION ON APPEAL INSTRUCTION : NO.95 [F.NO.1/6/69-ITCC], DATED 21- 8-1969 1.One of the points that came up for considerationin the 8th Meeting of the Informal ConsultativeCommittee was that income-tax assessments were oftenarbitrarily pitched at higher figures and that thecollection of disputed demand as a result thereof wasalso not stayed in spite of the specific provision inthe matter in s. 220(6) of the IT Act, 1961. 2. The then Deputy Prime Minister had observed asunder: "......... Where the income determined onassessment was substantially higher than the returnedincome, say twice the latter amount or more, thecollection of the tax in dispute should be held inabeyance till the decision on the appeal providedthere were no lapses on the part of the assessees." 3.The Board desire that the above observations maybe brought to the notice of all the Income-taxOfficers working under you and the powers of stay ofrecovery in such cases up to the stage of first appealmay be exercised by the Inspecting AssistantCommissioner/Commissioner of Income-tax.” There was a modification of the same vide Instruction No.1914 dated02.12.1993. It reads as follows : “SECTION 220 OF THE INCOME TAX ACT, 1961 – COLLECTIONAND RECOVERY OF TAX WHEN TAX PAYABLE AND WHEN ASSESSEEDEEMED IN DEFAULT – RECOVERY OF OUTSTANDING TAX DEMANDSINSTRUCTION NO.1914, DATED 02.12.1993COLLECTION AND RECOVERY : 3.The Board desire that the above observations maybe brought to the notice of all the Income-taxOfficers working under you and the powers of stay ofrecovery in such cases up to the stage of first appealmay be exercised by the Inspecting AssistantCommissioner/Commissioner of Income-tax.” There was a modification of the same vide Instruction No.1914 dated02.12.1993. It reads as follows : “SECTION 220 OF THE INCOME TAX ACT, 1961 – COLLECTIONAND RECOVERY OF TAX WHEN TAX PAYABLE AND WHEN ASSESSEEDEEMED IN DEFAULT – RECOVERY OF OUTSTANDING TAX DEMANDSINSTRUCTION NO.1914, DATED 02.12.1993COLLECTION AND RECOVERY : 1.The Board has felt the need for a comprehensiveinstruction on the subject of recovery of tax demand inorder to streamline recovery procedures. Thishttps://hcservices.ecourts.gov.in/hcservices/instruction is accordingly being issued in supersession of all earlier instructions on the subject andreiterates the existing Circulars on the subject.2.The Board is of the view that, as a matter ofprinciple, every demand should be recovered as soon asit becomes due. Demand may be kept in abeyance forvalid reasons only in accordance with the guidelinesgiven below: A.RESPONSIBILITY: i.It shall be the responsibility of the AssessingOfficer and the TRO to collect every demand that hasbeen raised, except the following: (a)Demand which has not fallen due; (b)Demand which has been stayed by a Court or ITATor Settlement Commission;(c)Demand for which a proper proposal for write offhas been submitted;(d)Demand stayed in accordance with paras B & Cbelow. ii.Where demand in respect of which a RecoveryCertificate has been issued or a statement has beendrawn, the primary responsibility for the collection oftax shall rest with the TRO. iii.It would be the responsibility of thesupervisory authorities to ensure that the AssessingOfficers and the TROs take all such measures as arenecessary to collect the demand. It must be understoodthat mere issue of a show cause notice with no follow-up is not to be regarded as adequate effort to recovertaxes. B.STAY PETITIONS : i.Stay petitions filed with the Assessing Officersmust be disposed of within two weeks of the filing ofpetition by the tax-payer. The assessee must beintimated of the decision without delay. ii.Where stay petitions are made to the authoritieshigher than the Assessing Officer (DC/CIT/CC), it isthe responsibility of the higher authorities to disposeof the petitions without any delay, and in any eventwithin two weeks of the receipt of the petition. Such adecision should be communicated to the assessee and theAssessing Officer immediately. iii.The decision in the matter of stay of demandshould normally be taken by Assessing Officer/TRO andhis immediate superior. A higher superior authorityshould interfere with the decision of the AO/TRO onlyin exceptional circumstances; e.g., where theassessment order appears to be unreasonably high-pitched or where genuine hardship is likely to becaused to the assessee. The higher authorities shoulddiscourage the assessee from filing review petitionshttps://hcservices.ecourts.gov.in/hcservices/before them as a matter of routine or in a frivolous manner to gain time for withholding payment of taxes.C.GUIDELINES FOR STAYING DEMAND:i.A demand will be stayed only if there are validreasons for doing so. Mere filing an appeal against theassessment order will not be a sufficient reason tostay the recovery of demand. A few illustrativesituations where stay could be granted are:(a)If the demand in dispute relates to issues thathave been decided in assessee's favour by an appellateauthority or court earlier ; or (b)if the demand in dispute has arisen because theAssessing Officer had adopted an interpretation of lawin respect of which there exist conflicting decisionsof one or more High Courts (not of the High Court underwhose jurisdiction the Assessing Officer is working); manner to gain time for withholding payment of taxes.C.GUIDELINES FOR STAYING DEMAND:i.A demand will be stayed only if there are validreasons for doing so. Mere filing an appeal against theassessment order will not be a sufficient reason tostay the recovery of demand. A few illustrativesituations where stay could be granted are:(a)If the demand in dispute relates to issues thathave been decided in assessee's favour by an appellateauthority or court earlier ; or (b)if the demand in dispute has arisen because theAssessing Officer had adopted an interpretation of lawin respect of which there exist conflicting decisionsof one or more High Courts (not of the High Court underwhose jurisdiction the Assessing Officer is working); (c)if the High Court having jurisdiction hasadopted a contrary interpretation but the Departmenthas not accepted that judgment. It is clarified that in these situations also, stay maybe granted only in respect of the amount attributableto such disputed points. Further, where it issubsequently found that the assessee has not co-operated in the early disposal of appeal or where asubsequent pronouncement by a higher appellateauthority or court alters the above situation, the stayorder may be reviewed and modified. The aboveillustrations are, of course, not exhaustive. ii. In granting stay, the Assessing Officer may imposesuch conditions as he may think fit. Thus he may, (a)require the assessee to offer suitable securityto safeguard the interest of revenue; (b)require the assessee to pay towards thedisputed taxes a reasonable amount in lump sum or ininstalments; (c)require an undertaking from the assessee that hewill co-operate in the early disposal of appeal failingwhich the stay order will be cancelled. (d)reserve the right to review the order passedafter expiry of a reasonable period, say up to 6months, or if the assessee has not co-operated in theearly disposal of appeal, or where a subsequentpronouncement by a higher appellate authority or courtalters the above situations; (e)reserve a right to adjust refunds arising, ifany, against the demand. iii.Payment by instalments may be liberally allowed soas to collect the entire demand within a reasonableperiod not exceeding 18 months. https://hcservices.ecourts.gov.in/hcservices/ iv.Since the phrase "stay of demand" does not occur insection 220(6) of the Income-tax Act, the AssessingOfficer should always use in any order passed undersection 220(6) [or under section 220(3) or section 220(7)], the expression that occurs in the section viz.,that he agrees to treat the assessee as not beingdefault in respect of the amount specified, subject tosuch conditions as he deems fit to impose. v. While considering an application under section 220(6), the Assessing Officer should consider all relevantfactors having a bearing on the demand raised andcommunicate his decision in the form of a speakingorder.D. Miscellaneous: i. Even where recovery of demand has been stayed, theAssessing Officer will continue to review the situationto ensure that the conditions imposed are fulfilled bythe assessee failing which the stay order would need tobe withdrawn. ii. Where the assessee seeks stay of demand from theTribunal, it should be strongly opposed. If theassessee presses his application, the CIT should directthe departmental representative to request that theappeal be posted within a month so that Tribunal'sorder on the appeal can be known within two months. iii. Appeal effects will have to be given within 2weeks from the receipt of the appellate order.Similarly, rectification application should be decidedwithin 2 weeks of the receipt thereof, instances wherethere is undue delay in giving effect to appellateorders, or in deciding rectification applications,should be dealt with very strictly by the CCITs/CITs. ii. Where the assessee seeks stay of demand from theTribunal, it should be strongly opposed. If theassessee presses his application, the CIT should directthe departmental representative to request that theappeal be posted within a month so that Tribunal'sorder on the appeal can be known within two months. iii. Appeal effects will have to be given within 2weeks from the receipt of the appellate order.Similarly, rectification application should be decidedwithin 2 weeks of the receipt thereof, instances wherethere is undue delay in giving effect to appellateorders, or in deciding rectification applications,should be dealt with very strictly by the CCITs/CITs. 3. The Board desires that appropriate action is takenin the matter of recovery in accordance with the aboveprocedure. The Assessing Officer or the TRO, as thecase may be, and his immediate superior officer shallbe held responsible for ensuring compliance with theseinstructions. 4.This procedure would apply mutatis mutandis todemands created under other direct taxes enactmentsalso.” The said instructions were however modified by Office Memorandum(F.No.404/72/93-ITCC), dated 29.02.2016 & 31.07.2017. They read ashttps://hcservices.ecourts.gov.in/hcservices/under : https://hcservices.ecourts.gov.in/hcservices/ https://hcservices.ecourts.gov.in/hcservices/ 6.The learned counsel for the petitioner took me through thedecisions of the Delhi High Court reported in [2008] 307 ITR 103(Delhi) (Valvoline Cummins Limited vs. Deputy Commissioner of IncomeTax and Ors, [2010] 323 ITR 305(Delhi) (Soul vs. Deputy Commissionerof Income Tax) & Taneja Developers & Infrastructure Ltd. vs.Asst.Commissioner of Income Tax & Ors.) and [2010] 324 ITR 247(Delhi), for the proposition that failure to consider the petitionin the light of the CBDT Instruction No. 95, dated 21.08.1969, wouldrender the order passed under Section 220(6) of the Act bad in law.She pointed out that a learned Judge of this Court inhttps://hcservices.ecourts.gov.in/hcservices/ N.Jegatheesan vs. Deputy Commissioner of Income Tax, Non CorporateCircle-2, (2016) 4 MLJ 479, has also followed the aforesaiddecisions. This 1969 circular has also been referred to in a fewother decisions, namely,Kalaignar TV Pvt. Ltd. v. ACIT(MANU/TN/3920/2018) andKannammal vs. Income Tax Officer, Ward 1(1),Tirupur [2019] 413 ITR 390(Mad). 7.The learned standing counsel point out that vide Letterbearing F.No.404/10/2009-ITCC dated 01.12.2009, it has beenspecifically made clear that Instruction No.95 dated 21.08.1969 nolonger exists. It must also be noted that in none of the decisionsreferred to by the learned counsel for the petitioner, attention ofthe learned Judges was drawn to Letter F.No.404/10/2009-ITCC dated01.12.2009. Interestingly, in Jegatheesan's case, in Paragraph 15,the learned Judge has observed that contrasting claims have beenmade as regards the existence of Instruction No.95. However, nofinding was given. If the Circular dated 01.12.2009 had been broughtto the notice of the learned Judge, it would have been held thatInstruction No.95 had ceased to exist long ago. Therefore, I holdthat failure to refer Instruction No.95 dated 21.08.1969 cannot besaid to have vitiated the impugned order. 8.Though in Paulsons Litho Works vs. ITO (1994 76 Taxman294/208 ITR 676 (Mad) and in Cavinkare Private Limited vs.Commissioner of Income Tax (Appeals)-18, Chennai and Ors, (2018) 93Taxmann.com 14 (Mad), it has been specifically observed that thepetition filed before the assessing officer under Section 220(6) ofthe Act cannot be treated as a stay petition in the normal sense,as held by the Hon'ble Supreme Court inThe Income Tax Officer,Cannanore vs. M.K. Mohammed Kunhi (AIR 1969 SC 430), the assessingofficer while passing an order certainly exercises his power to staythe recovery of dues by not treating the assessee in default. Thatis why, in Kannammal's case, the learned Judge (Dr.Justice AnitaSumanth) held as follows : “7.The parameters to be taken into account inconsidering the grant of stay of disputed demand are wellsettled-the existence of a prima facie case, financialstringency and the balance of convenience. 'Financialstringency' would include within its ambit the question of'irreparable injury' and 'undue hardship' as well. It isonly upon an application of the three factors as aforesaidthat the assessing officer can exercise discretion for thegrant or rejection, wholly or in part, of a request forstay of disputed demand.” 9.I may also add that the Division Bench of the Bombay HighCourt in the decision reported in 2019 SCC OnLine Bom 8430(GeneralInsurance Corporation of India vs. Assistant Commissioner of Incomehttps://hcservices.ecourts.gov.in/hcservices/ Tax Circle 3(1)(2) and Others) has also laid down the principleswhich the assessing officer must bear in mind while exercising hisjurisdiction under Section 220(6) of the Act. Paragraph No.10 of thesaid order reads as follows : “10.Before dealing with the rival submissions itwould be useful to set out the parameters to be borne inmind while disposing of stay application as laid down bythis Court. We refer to the following extract of thedecision of this Court in Mumbai Metropolitan RegionDevelopment Authority v. Deputy Director of Income Tax(WP(L) No. 2348 of 2014) rendered on 29 October 2014 asunder:— “11.We have today, disposed of another Petitionbearing No. 2542 of 2014 filed by the SlumRehabilitation Authority and set out the parameters indeciding stay application as laid down by this Court inKEC International Limited v. B.R.Balakrishnan 251 ITR158; UTI Mutual Funds v. ITO 345 ITR 71 and UTI MutualFund v. ITO in W.P.(L) No. 523 of 2013 rendered on 6[th]March 2013 which can for the purposes of disposing anapplication of stay can be summarized as under: (a) The order on stay application must briefly set outthe issue and the submission of the assessee/applicantin support of the stay; (b) In cases where the assessed income under theimpugned order far exceeds returned income so as tomake the demand arbitrary or the issue arising forconsideration stands concluded by a decision of anhigher forum or where the order appealed against is inbreach of Natural Justice or the view taken in theorder being appealed against is contrary to what hasbeen held in the preceding previous years (even ifissue pending before higher forum) without there beinga material change in facts or law, stay should normallybe granted; (c) If not, whether looking to the questions involvedin appeal, keeping in view the likelihood of success inappeal what part of the demand the whole(in case issuecovered against the applicant by a decision of higherforum) or part of it and must be justified by shortreasons in the order disposing of the stay application;(c) Lack of financial hardship would not be a soleground to direct deposit/payment of the demands if theassessee/applicant has a strong arguable case onmerits; (d) In cases where the assessee/applicant relies uponfinancial difficulties, the authority concerned shouldbriefly indicate whether the assessee is financiallyhttps://hcservices.ecourts.gov.in/hcservices/ (c) If not, whether looking to the questions involvedin appeal, keeping in view the likelihood of success inappeal what part of the demand the whole(in case issuecovered against the applicant by a decision of higherforum) or part of it and must be justified by shortreasons in the order disposing of the stay application;(c) Lack of financial hardship would not be a soleground to direct deposit/payment of the demands if theassessee/applicant has a strong arguable case onmerits; (d) In cases where the assessee/applicant relies uponfinancial difficulties, the authority concerned shouldbriefly indicate whether the assessee is financiallyhttps://hcservices.ecourts.gov.in/hcservices/ sound and viable to deposit the amount or theapprehension of the revenue of non recovery later. Thuswarranting deposit. This of course, if the case is nototherwise sustainable on merits;(d) The authority concerned will also examine whetherthe time to prefer an appeal has expired. Generally,coercive measures may not be adopted during the periodprovided by the statute to go in appeal. However, ifthe authority concerned comes to the conclusion thatthe assessee is likely to defeat the demand, it maytake recourse to coercive action for which briefreasons may be indicated in the order (e) In exercising the powers of stay, the Authorityshould always bear in mind that as a quasi judicialauthority it is vested with the public duty ofprotecting the interest of the Revenue while at thesame time balancing the need to mitigate hardship tothe assessee. Though the assessing officer has made anassessment, he must objectively decide the applicationfor stay considering that an appeal lies against hisorder; the application for stay must be considered fromall its facets and the order should be passed,balancing the interest of the assessee with theprotection of the Revenue. The above guidelines are only illustrative and theauthority concerned would have to have exercise hisdiscretion in matters of stay on the facts of the casebefore him. Keeping in view of the above broadparameters we shall now examine whether the authoritieshave properly exercised their jurisdiction.” 10.As rightly pointed out by the learned counsel for thepetitioner, Letter bearing F.No.404/10/2009-ITCC dated 01.12.2009issued by the Board even while making it clear that the 1969circular has ceased to exist emphasized that Instruction No.1914dated 02.12.1993 holds the field. Clause 2(C)(v) of InstructionNo.1914 states that while considering an application under Section220(6) of the Act, the assessing officer should consider allrelevant factors having a bearing on the demand raised andcommunicate his decision in the form of a speaking order. Thelearned counsel for the petitioner pointed out that the impugnedorder is not at all in conformity with the aforesaid requirement. 11.To buttress her contention, the learned counsel for thepetitioner placed reliance on the decision of the Hon'ble DivisionBench of the Delhi High Court reported in [2018] 303 CTR (Del) 650(L.G.Electronics India (P) Ltd. v. Principal Commissioner of IncomeTax and Ors). The Hon'ble Division Bench in the said decisionobserved as follows : https://hcservices.ecourts.gov.in/hcservices/ “6.The impugned order clearly makes no referenceto the central issue in the pending appeal or thegrievance of the petitioner regarding the order passedby the AO. The impugned order in short is withoutreasons and is therefore unsustainable in law. 11.To buttress her contention, the learned counsel for thepetitioner placed reliance on the decision of the Hon'ble DivisionBench of the Delhi High Court reported in [2018] 303 CTR (Del) 650(L.G.Electronics India (P) Ltd. v. Principal Commissioner of IncomeTax and Ors). The Hon'ble Division Bench in the said decisionobserved as follows : https://hcservices.ecourts.gov.in/hcservices/ “6.The impugned order clearly makes no referenceto the central issue in the pending appeal or thegrievance of the petitioner regarding the order passedby the AO. The impugned order in short is withoutreasons and is therefore unsustainable in law. 7.For the above reasons, the impugned order is setaside and a direction is issued that the petitioner'sapplication will once again be heard by the PrincipalCIT on merits and without reference to the OM dt. 31stJuly, 2017, which, on the face of it, appears tocurtail his discretion. The Principal CIT will disposeof the application with a reasoned order not later thantwo weeks from the date of receipt of this order.” 12.The learned counsel on either side bring it to my noticethat the decision of the Delhi High Court was put to challengebefore the Hon'ble Supreme Court in (2018) 18 SCC 447 (PrincipalCommissioner of Income Tax vs. LG Electronics India PricateLimited). Based on the submission of the learned AdditionalSolicitor General, the Hon'ble Supreme Court clarified that in allcases arising under 220(6) of the Act, it will be open to theauthorities on the facts of individual cases, to grant depositorders of a lesser amount than 20% pending appeal. This was laiddown by the Hon'ble Supreme Court since it was submitted that theadministrative circular will not operate as a fetter on theCommissioner since he is a quasi-judicial authority. Since theAssessing Officer is exercising quasi-judicial power by virtue ofSection 220(6) of the Act, the implication of the clarification ofthe legal position by the Hon'ble Supreme Court is that theassessing officer can grant deposit orders of a lesser amount than20% pending appeal without making reference to the administrativePr.CIT/CIT. Reference of course has to be made if he is of the viewthat deposit order of a higher amount than 20% pending appeal iswarranted. 13.The order impugned in this writ petition is liable to be setaside as it is absolutely non-speaking. It is true that as pointedout by the learned standing counsel, the stay petition filed by thepetitioner is equally bald and bereft of details. But as observed inKannammal's case, the assessing officer ought to be pro-active. Thestatutory provision will come into play only if an appeal has beenfiled before the appellate authority. The case of the assesseewould definitely be projected in the appeal memorandum. Therefore,in the light of the stand taken in the appeal memorandum, theAssessing Officer can pass order by applying the trinity principles. 14.It is needless to say that the petition under Section 220(6)of the Act will have to be filed only before the assessing officerafter filing the statutory appeal. The learned standing counselclaim that at present the assessees are indiscriminately filing thehttps://hcservices.ecourts.gov.in/hcservices/ 14.It is needless to say that the petition under Section 220(6)of the Act will have to be filed only before the assessing officerafter filing the statutory appeal. The learned standing counselclaim that at present the assessees are indiscriminately filing thehttps://hcservices.ecourts.gov.in/hcservices/ stay petitions. They move the appellate authority, the assessingofficer and also the Principal Commissioner of Income Taxsimultaneously. The Principal Commissioner of Income Tax is onlythe reviewing authority. It is only when the assessing officermakes a reference or if the assessee is aggrieved by the orderpassed by the assessing officer, by virtue of Circular dated29.02.2016, the Principal Commissioner of Income Tax will get thejurisdiction to exercise his power under Section 220(6) of the Actand not otherwise. In other words, he cannot assume thejurisdiction in the first instance. The assessees must also ensurethat the petition filed under Section 220(6) of the Act contain allthe relevant particulars so that the assessing officer can pass anappropriate order by bearing in mind the trinity principles. Theorder passed by the assessing officer will hold good and will haveto give away as and when the appellate authority passes an order onthe stay petition filed by the assessee/appellant. 15.In the light of the aforesaid discussion, the order impugnedin the writ petition is set aside and the matter is remitted to thefile of the assessing officer to pass orders afresh in accordancewith law. The petitioner is at liberty to file a supplementarypetition containing additional particulars and contentions. Theassessing officer is obliged to consider all the contentions thatmay be raised by the petitioner while passing order under Section220(6) of the Act. All the contentions of the petitioner are leftopen. The writ petition is allowed. No costs. Consequently,connected miscellaneous petitions are closed. Sd/-Assistant Registrar(T & P) // True Copy // / /2021Sub Assistant Registrar(CS) skmNote : In view of the present lock down owing to COVID-19 pandemic,a web copy of the order may be utilized for official purposes, but,ensuring that the copy of the order that is presented is the correctcopy, shall be the responsibility of the advocate/litigantconcerned.To1.The Assistant Commissioner of Income Tax (Circle-1), Income Tax Office, Ground and First Floor, Sekkalai Street, Karaikudi – 630 002.order made in order made inWP(MD)No.5550 of 2020 andWMP(MD)Nos.4853, 4854 & 4855 of 202008.04.2021 na(CO)TR(17.05.2021) 14P 2Chttps://hcservices.ecourts.gov.in/hcservices/