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Issues:
Extension of stay for recovery of demand under Income-tax Act, 1961. Analysis: The applicant sought an extension of the stay for six months regarding the recovery of a demand raised under sections 201(1) and 201(1A) of the Income-tax Act, 1961, read with section 194H. The Tribunal had initially granted the stay, subject to conditions, which was extended multiple times until November 2004. The applicant filed a fresh application for extension in December 2004. However, the Assessing Officer attached the bank account despite the pending stay application. The applicant argued that the recovery during the stay application process was illegal, citing the Tribunal's powers to grant stays and the prohibition on coercive actions by the Assessing Officer during the pendency of a stay application. The Tribunal found that the conditions of the original stay were complied with, and there was no change in the facts of the case. The applicant had not sought adjournments, and the Assessing Officer was duly informed of the upcoming hearing. Referring to precedents, the Tribunal emphasized the prohibition on coercive recovery actions during the stay application process. The Tribunal criticized the Assessing Officer's hasty recovery actions before the scheduled hearing, deeming them an attempt to frustrate the stay process. Consequently, the Tribunal granted a stay against the recovery for six months from the date of the application or until the appeal's disposal, directing the Assessing Officer not to encash the demand draft. If encashed, the Assessing Officer was ordered to refund the amount immediately. The appeal was scheduled for hearing on a specified date. In conclusion, the Stay Application was allowed, emphasizing the importance of adhering to legal procedures and the Tribunal's authority to grant stays against recovery actions under the Income-tax Act, 1961.
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