Stay order made u/S 220 (6) of the Income Tax Act must be a Speaking Order: Madras HC [Read Order]

The Madurai bench of the Madras High Court commissioner has ruled that a stay order made u/S 220 (6) of the Income Tax,1961 must be a speaking order.

Mr Ravi Kannan appeared on behalf of the petitioner and Mr N.Dilip Kumar appeared for the respondent.

M/s.V V Titanium Pigments Private Limited, the petitioner challenged the order, dated 22.06.2021 issued by the Respondent under Section 220 (6) of the Income Tax Act on the ground that it was non-speaking order.

The petitioner has its factory at A-81, SIPCOT Industrial Complex, where a search was carried out on 25.10.2018 and was temporarily concluded on 28.10.2018 with Prohibitory Orders. It was mentioned that the warrant was in the names of various individuals & business entities including the petitioner's name. 

It was contended that as there are no individual warrants of authorization and therefore the search was not by law as mandated in Section 132 of the Income Tax Act, 1961. It was further stated that an assessment u/s.153A of the Income Tax Act is permissible only when the search is valid in terms of the Income Tax Act, 1961.

The petitioner challenged by way of an appeal and moved an application for a stay under Section 220(6) of the Income Tax Act which was disposed of by the impugned order on the ground that not stated any valid grounds for non-payment of the tax demanded except pending appeal before CIT(Appeal).

It was held in the case of Kannammal Vs Income Tax Officer and others reported in (2019) 413 ITR 390 (Mad) that any order made under Section 220 (6) of the Income Tax must be a speaking order.

Justice Mohammed Shaffiq held that “the impugned order is cryptic and non-speaking and thus contrary to the above order of this Court and the various instructions.  Given the same, the impugned order dated 22.06.2021 is set aside and the matter is remanded back to the Respondent to reconsider the application for a stay under Section 220(6) of the Act on merits and pass a speaking order within a period of eight weeks from the date of receipt of a copy of this order after granting the reasonable opportunity to the Petitioner. The writ petition stands disposed of.”

To Read the full text of the Order CLICK HERE

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