Aggarwal Rice and General Mills vs Commissioner of Income Tax (Appeals) and Another

R.S. Mongia, J.—Learned counsel for the respondents has filed a written statement to the main writ petition which is taken on record.

An application has been filed with a prayer to grant stay of recovery of assessed tax by the Income Tax Officer, Ward No. 3, Bhatinda (respondent No. 2). With the consent of the parties, I have heard them on the merits in the main case. Instead of passing any orders in the miscellaneous application, I propose to dispose of the main case itself.

Briefly, the facts of the case are that, for the assessment year 1990-91, the petitioner was assessed to Income Tax to the tune of Rs. 7,82,852 by the Income Tax Officer, Ward No. 3, Bhatinda. The petitioner has filed an appeal against the said assessment order which is pending before the Commissioner of Income Tax (Appeals), Bhatinda. During the pendency of the appeal before the appellate authority, the petitioner moved an application before respondent No. 2 u/s 220(6) of the Income Tax Act, 1961, for treating the assessee as not in default for the non-payment of the assessed tax, meaning thereby that, till the disposal of the appeal, the recovery of the assessed tax be stayed.

The Income Tax Officer, Ward No. 3 (respondent No. 2), passed an order on the abovesaid application on November 20, 1992, which reads as under :

"Your demand fell due on November 12, 1992, and you have applied for stay of demand on November 19, 1992. You have not applied for stay of demand even within 30 days stipulated period. Your application has been carefully considered and rejected. Please make the payment within a week of receipt of this letter failing which recovery will be made through coercive measures."

Copy of the said order has been filed as annexure P-3 to the writ petition.

The petitioner then approached the Deputy Commissioner of Income Tax, Bhatinda, who, vide order dated January 25, 1993 (annexure P-6), directed the petitioner to contact the Income Tax Officer, Ward No. 3, to whom necessary instructions had been issued.

It is against the order of the Income Tax Officer, Ward No. 3, Bhatinda, dated November 20, 1992 (annexure P-3), that the present writ petition has been filed.

Learned counsel for the petitioner submitted that no opportunity of hearing was granted by the Income Tax Officer, Ward No. 3, Bhatinda (respondent No. 2), before passing the order dated November 20, 1992 (annexure P-3). Further, he submitted that the order has been passed without any application of mind and is wholly a non-speaking order. On these grounds, learned counsel submitted that the impugned order dated November 20, 1992 (annexure P-3), is liable to be set aside. He relied upon Kuku Rice Mills v. Assessing Authority-cum-income tax Authority [1992] 196 ITS 326 (P & H) in support of his above contentions.

It is not disputed on behalf of the respondent that no opportunity of hearing was given to the petitioner before passing the impugned order, annexure P-3, by respondent No. 2. A perusal of the order (which has already been reproduced above) shows that no reasons have been given for rejecting the application of the petitioner. To my mind, the order is a non-speaking one and respondent No. 2 was required to pass a speaking order after affording an opportunity to the petitioner. This is what has been held in the above-noted authority cited by learned counsel for the petitioner.

For the foregoing reasons, this writ petition is allowed and the order dated November 20, 1992 (annexure P-3), is set aside. The Income Tax Officer, Ward No. 3 (respondent No. 2), is directed to decide the matter afresh after affording an opportunity of hearing to the petitioner and by passing a speaking order. He is further directed to dispose of the application on or before May 31, 1993. The petitioner is directed to appear before the Income tax Officer, Ward No. 3 (respondent No. 2), on April 23, 1993, to get further directions in the mailer. The recovery of the assessed tax shall remain stayed till the matter is derided by respondent No. 2. Copy of this order be given to the parties on payment. I make no order as to costs.