INCOME TAX ACT, 1961

Section 220

Recovery - Stay of demand - Application of assessee seeking stay AO not considered by AO -

Assessee was challenging notice issued by AO to assessee's bank requiring bank to remit an amount of Rs. 33,42,040 as dues towards payment of income tax by assessee. Case of assessee was that it already instituted an appeal against assessment order which was basis for demand raised. Assessee further contended that AO himself, stated that recovery could be stayed pending disposal of appeal, subject to payment of 20% of demanded amount. Case of assessee was that assessee was due to get refund of Rs. 23,66,633 from Department and therefore, aforesaid demand could be adjusted accordingly. Held: AO was required to consider assessee application seeking for stay on recovery of entire demanded amount before issuing said notice. On this short ground, execution of notice was deferred. This was more so because despite notice, bankers of assessee did not remit amount to Income Tax Department. Thus, until assessee's application was disposed of, AO was directed not to insist upon compliance with said notice.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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