GAJANANA AGENCIES Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) WHEN this writ petition came up for admission, both sides agreed that this can be disposed of at the admission stage itself.

(2.) THE writ petitioner is a partnership firm doing business in rubber. THE dispute involved in this writ petition relates to the assessment under the Income-tax Act for the year 1991-92. Exhibit P-1 in the order of assessment passed against the petitioner and exhibit P-7 series are the consequential orders passed against the partners of the firm. As against exhibit P-l, the petitioner filed an appeal evidenced by exhibit P-2. It has filed exhibit P-3 application before the first respondent, the Income-tax Officer under Section 220(6) of the Act praying to treat the assessee as not being in default till the disposal of exhibit P-2 appeal. That application has been disposed of by the first respondent as per exhibit P-4 order. As against exhibit P-4, the petitioner firm further filed a revision petition before the second respondent. Exhibit P-8 is the petition and that petition has been disposed of by the second respondent as per exhibit P-9. Now, the petitioner substantially prays for quashing exhibits P-4 and P-9 orders passed by the respondents Nos. 1 and 2, respectively.

(3.) IT appears to me that exhibit P-4 order is intended to gather tax and not to stay the collection of tax as contemplated under Section 220(6) of the Act. The principle laid down by this court in Rajan Nair's case [1987] 165 ITR 650 has not been followed in this case by the assessing authority. Learned counsel appearing for the petitioner brought to my notice that a huge addition has been made towards the taxable income in this case. The assessee has filed a return showing an income of Rs. 1,36,240 whereas the assessing authority has fixed the income as Rs. 5,61,200. Counsel for the petitioner says that the explanation offered for price variation in the sale of rubber has not been accepted. A prima facie case, it appears, has been made out in the facts and circumstances of the case. Whatever that be, as far as I could see, exhibit P-4 order does not conform to the various guidelines laid down by this court to be observed while disposing of the application under Section 220(6) of the Act. That being so, I am compelled to set aside exhibit P-4 order and I do so.