Power under S. 220(1) proviso to reduce period for payment of tax to be exercised after application of mind & recording reasons

Firoz Tin Factory vs. ACIT (Bombay High Court)

 

The AO passed a s. 143(3) order on 9.3.2012 raising a demand of Rs. 36.56 crores and directed the assessee to pay the entire demand within 7 days even though the period specified in 220(1) is 30 days. The assessee filed a stay application u/s 220(6) on 12.3. 2012 which was rejected on the ground that it did not fall within the guidelines framed in the CBDT’s instruction No.1914. issued by the CBDT. The assessee approached the CIT pointing that there was no justification to demand payment within 7 days while s. 220(1) granted 30 days and that as there was already a provisional attachment, there was no determinant to the revenue. The CIT rejected the application and the AO attached the assessee’s mutual fund investments s. 226(3). The assessee filed a Writ Petition. HELD by the Court: