Sankar Prasad Mitra, J. - (1.) Sub-section (6) of Section 220 of the Income-tax Act, 1961, reads as follows : "Where an assessee has presented an appeal under Section 246 the Income-tax Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount In dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of."
(2.) In the instant case, there was an order of assessment .against the petitioner in respect of the assessment year 1963-64. The petitioner preferred an appeal to the Appellate Assistant Commissioner. On the 22nd April, 1968, the petitioner wrote 16 the Income-tax Officer who made the assessment requesting postponement of payment of the tax assessed pending the disposal of the appeal to the Appellate Assistant Commissioner. In this letter two grounds in support of the prayer to keep the matter of payment in abeyance have been advanced. The grounds are : (i) the petitioner has preferred an appeal and believes that his grievances would be redressed by the Appellate Assistant Commissioner ; and (ii) in view of the nature and extent of the petitioner's business and the business condition then prevailing the petitioner was unable to pay the huge demand of Rs. 48,566. This letter of the 22nd April, 1968, was not dealt with by the Income-tax Officer, responsible for the assessment, that is,, the respondent No. 1, but by the Income-tax Officer, Collection, District III(3), Calcutta, that is, respondent No. 2. . In his reply dated the 20th May, 1968, respondent No. 2 has refused to stay realisation of tax pending the petitioner's appeal to the Appellate Assistant Commissioner. His reason is that stay of realisation cannot be granted on the ground that an appeal has been preferred. With regard to the petitioner's plea of inability to make payment of the . amount demanded all at once, respondent No. 2 has requested the petitioner to appear before him "with a definite scheme of payment so that the entire demand may be liquidated by the year.
(3.) Mr. Ghosh appearing for the petitioner has argued before me that respondent No. 2 has not judicially exercised his discretion given to him under Sub-section (6) of Section 220 of the Act of 1961. Learned counsel contends that the reasons for refusal have not at all been stated in the letter of the 20th May, 1968. Moreover, this letter does not show that respondent No. 2 had taken into account relevant factors like possibility of petitioner's success in the appeal, the quantum of the demand and the petitioner's financial difficulties in satisfying the demand.;