INCOME TAX ACT, 1961

Section 226(3)

Recovery - Stay of demand - AO not considered aspects of existence of prima facie case, financial stringency and balance of convenience -

AO rejected assessee's application for stay of demand on the ground that mere filing of appeal before CIT(A) was not a valid reason for stay of collection and request for stay of demand could be considered only on payment of 20% of tax demand, as per the CBDT's Instruction No. 1914, dated 21/03/1996, as modified by OM, dated 29-2-2016. Held: AO had evidently not considered aspects of existence of prima facie case, financial stringency and balance of convenience as had to be done prior to a proper adjudication of a petition for stay of demand. Accordingly, impugned order was set aside. Assessee was granted liberty to approach appellate authorities with an application for stay of recovery within a period of two weeks and Appellate/Administrative Commissioner will, after hearing the assessee, dispose of stay application in accordance with law and after taking into consideration the three fold aspects of prima facie case, financial stringency and balance of convenience within a period of three (3) weeks thereafter by way of a speaking order. There would be an order interim stay of recovery of disputed demand till disposal of stay application to be filed by assessee before Appellate/Administrative Commissioner.

Followed:Mrs. Kannammal v. ITO (W.P. No. 3849 of 2019, dated 13-2-2019) : 2019 TaxPub(DT) 1826 (Mad-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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