Income Tax AO Can Grant Relief u/s 220(6) Even Below 20% Tax Deposit: Madras HC Remands Matter

The Madras High Court recently ruled that an Income Tax Assessing Officer (AO) possesses the discretion to grant relief under Section 220(6) of the Income Tax Act, even if the tax deposit is below the usual 20% threshold. This decision provides flexibility for taxpayers facing financial difficulties in meeting the full pre-deposit requirement for appeals. The court emphasized that the AO must consider the specific circumstances of each case, rather than adhering to a rigid percentage. The matter was remanded back to the AO for fresh consideration, directing a holistic assessment of the taxpayer's ability to pay and the merits of their case. This ruling promotes a more equitable approach in tax recovery.