2019 (7) TMI 375 - HC - Income Tax

Stay of demand - CIT-A insisting upon payment of 20% of the disputed tax amount, pending disposal of the appeals - single Judge while disposing the writ petitions, had reduced the condition by limiting the payment to an amount of 10%, till the disposal of the appeals - HELD THAT - Taking note of the peculiar aspect involved touching the merits in the appeals based on decision above The Mavilayi Service Co-operative Bank Ltd. v. The CIT 2019 (3) TMI 1580 - KERALA HIGH COURT we are of the opinion that the insistence for payment of a portion, as a condition for granting stay, need not be made in the cases at hand. Therefore the impugned judgments need to be modified. Hence, the writ appeals are hereby allowed. The impugned judgment of the single Judge are hereby set aside. The respective writ petitions are allowed to the extent of directing the CIT (Appeals) to consider and dispose of the statutory appeals filed by the appellants herein, at the earliest, taking note of the Full Bench decision cited above.

Summary

Issues Involved:
Challenge against interim order for payment of disputed tax amount pending appeal.

Analysis:
The writ appeals were considered together as the issues were identical. The challenge raised was against the interim order by the Commissioner of Income Tax (Appeals) requiring payment of 20% of the disputed tax amount during the appeal process. The single Judge had reduced this condition to 10%, which was being challenged in these appeals.

The appellants argued that the liability of the banks to pay income tax had already been decided by a Full Bench of the Court in a previous judgment. They contended that the appellate authority could only remand the matter for further investigation into the banks' activities. They claimed that insisting on payment during the appeal process could cause hardships and prejudices to the banks.

On the other hand, the respondent's counsel argued that the decision to require part payment for granting a stay was within the discretion of the appellate authority, and the Court should not interfere with this exercise of discretion.

The Court, considering the peculiar aspects involved based on the Full Bench decision, concluded that the insistence on payment of a portion as a condition for granting a stay was not necessary in the present cases. Therefore, the impugned judgments were modified, and the writ appeals were allowed. The single Judge's judgment was set aside, directing the Commissioner of Income Tax (Appeals) to consider and dispose of the statutory appeals filed by the appellants promptly, in accordance with the Full Bench decision, and to suspend the recovery and collection of the tax assessed during the appeal process.