ANANTANARAYANAN, OFFG. C.J. - The writ petitioner instituted a proceeding in this court for a writ of mandamus directing an Income-tax Officer to forbear from recovering from the petitioner the tax assessed at Rs. 72,000 and odd in pursuance of a demand pending disposal of an appeal before the Appellate Assistant Commissioner of Income-tax, 'A' Range, Madras. Srinivasan J., before whom the matter came up, dismissed the writ petition in layman, making a brief observation to the effect that the jurisdiction of the Income-tax Officer to proceed to collect the tax was not in dispute. It is from this judgment that the writ appeal is sought to be filed.
We may state that learned counsel for the writ-appellant (Sri Rajah Iyer) does not dispute the proposition of the learned judge that the concerned authority (Income-tax Officer) had the requisite jurisdiction. His complaint is that the Income-tax Officer has not paid adequate regard to section 220, sub-clause (6) of the Income-tax Act, 1961 (Act 43 of 1961), under which the Income-tax Officer has a discretion, when an appeal is pending to 'treat the assessee as not being in default in respect of the amount in dispute in the appeal.' Learned counsel reinforces the argument by the citation of two decisions one of the Calcutta High Court and another of the Andhra High Court (Ladhuram Taparia v. B. K. Baghchi and Vetcha Sreeramaurthy v. Income-tax Officer, Vizianagaram). Learned counsel also stressed that by virtue of a recent judgment in Tax Case No. 286 of 1962, his contention that this particular levy cannot be legally enforced derives considerable support. Needless to say, we are not making any observation now on the strength of that argument, as it relates to an appeal pending before the Appellate Assistant Commissioner and a matter that is sub-judice.
But, we are definitely of the view that the discreation vested in the Income-tax Officer under section 220, sub-clause (6), where the concerned assessee has preferred an appeal which is pending, is not merely a power but a power which is coupled with a responsibility. In that sense we agree, with respect, with the two decisions cited as far as this enunciation of the principle is concerned.
That implies necessarily that the concerned officer who has the power should take all the circumstances into account, all the considerations that could be urged or are urged by the assessee why he should be treated 'as not being in default' and then make such order as is appropriate to the facts of the case. In other words, such a request for the exercise of the power under section 220, sub-clause (6), cannot be merely summarily rejected on the basis that the power is there with the officer but that he is not bound to exercise it. It is a power coupled with a responsibility and not merely a naked and arbitrary power. Hence, we think that it is sufficient to observe this and leave it to the assessee to place before the concerned officer the grounds why the discreation should not be exercised in his favour. With these observations the writ appeal is dismissed.