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Judgment
With consent heard finally. By filing this petition under Art. 226 of the Constitution of India, the petitioner has challenged the order dt. 3rd May, 2013 passed by the Dy. CIT (TDS), Circle Indore rejecting the petitioner''s prayer for stay made under s. 220(6) of the IT Act, 1961 (for short, "the Act").
Briefly stated, the petitioner a public sector undertaking of Government of Madhya Pradesh engaged in distribution of electricity to its consumers claims that it is engaged in purchasing the electricity from Madhya Pradesh Power Generating Company which is transmitted from the grid of power generating company to the grid of petitioner company by Madhya Pradesh Power Transmission Co. Ltd. under the transmission service agreement. The first respondent in exercise of its powers under s. 201 of the Act raised a demand of interest from the petitioner on the ground of non-deduction of tax at source under s. 194J of the Act.
According to the petitioner, no interest was leviable on it when the deductee assessee has ''nil'' tax liability. Challenging the assessment order passed by the first respondent, the petitioner filed an appeal under s. 260A (sic) of the Act along with a stay application. Simultaneously the petitioner also filed an application under s. 220(6) of the Act before the first respondent for stay of demand of interest on non-deduction of tax as according to the petitioner there was no liability of payment of the tax by the recipient of income. The said application dt. 29th April, 2013 (Annex. P-8) filed under s. 220(6) suffered rejection by the impugned order dt. 3rd May, 2013 (Annex. P-1). Feeling aggrieved, the petitioner has filed this petition.
According to the learned counsel for the petitioner, the impugned order of rejection of its prayer for stay is illegal, arbitrary and is also violative of principles of natural justice as no opportunity of hearing has been accorded to the petitioner before passing the order. He submits that though various grounds were raised in the application for stay, but the application has been rejected mechanically by a non-speaking order.
On the other hand learned senior counsel appearing for the respondents supported the impugned order. He argued that the petitioner is having remedy of approaching the authority higher than the AO as provided under the Instruction No. 1914, dt. 2nd Dec., 1993 issued by CBDT.
We have considered the submissions made by the learned counsel for the parties.
We find that the petitioner''s application for stay has been rejected by the impugned order dt. 3rd May, 2013 by observing thus:
Considering the facts of the case and in view of the Instruction No. 1914 issued by the Hon''ble CBDT, New Delhi, your stay application dt. 29th April, 2013 is hereby rejected.
Having considered the aforesaid order of rejection, we are of the view that the application for stay has been rejected mechanically without adverting to the facts and without considering the true import of the Instruction No. 1914 issued by CBDT. It also appears from the impugned order that the petitioner has not been afforded opportunity of hearing.
Having regard to the aforesaid, we are of the considered view that in the absence of reasons and the fact that the same being a non-speaking order passed without giving opportunity of hearing to the petitioner, it cannot be sustained.
As a result, we set aside the impugned order dt. 3rd May, 2013 (Annex. P-1) and direct the first respondent to pass a fresh reasoned order on the petitioner''s application filed under s. 220(6) of the Act after giving the petitioner an opportunity of hearing.
Till decision on the petitioner''s application, the respondents shall not take coercive steps against the petitioner for recovery of the demand raised against it. It is also made clear that merely because the petitioner has filed a stay application along with memo of appeal, the respondents cannot contend that the application under s. 220(6) of the Act was not maintainable and the petitioner be directed to seek the remedy of stay from the higher authority. With the aforesaid, the petition stands allowed to the extent indicated above.