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Stay of recovery of disputed taxes for the assessment year 1989-90. Analysis: The assessee, a company, filed a return showing an income of Rs. 19,55,413 for the assessment year 1989-90, but the assessment determined the total income at Rs. 92,44,310, resulting in a demand of Rs. 62,62,670. The appeal was partly allowed, leaving the disputed tax amounting to Rs. 42,09,337, along with interest under sections 234B and 234C. The Income-tax Officer had already recovered a portion of the amount from the bank accounts of the assessee. The assessee requested a stay of collection due to financial constraints, but the Commissioner of Income-tax refused the request, leading to the petition for stay before the Tribunal. The Tribunal considered the provisions of the Income Tax Act and emphasized the importance of fairness and balance in tax collection. It noted the disparity in interest rates between what the assessee had to pay and what the Revenue paid, highlighting the need for a reasonable approach in tax recovery. The Tribunal discussed the powers of the assessing officer and the Tax Recovery Officer to grant stay of recovery during pending appeals, emphasizing the need for fair treatment and proper consideration of the assessee's financial situation. The Tribunal further addressed the role of the Commissioner of Income-tax in guiding the Income-tax Officer and the Tax Recovery Officer, stressing the importance of following principles of natural justice and making speaking orders when rejecting applications for stay. It clarified that the Commissioner's administrative powers still required adherence to fairness and natural justice principles, especially when interfering with judicial discretion. Regarding the Tribunal's authority to direct the Commissioner of Income-tax in matters of stay, it explained that the Tribunal had the power to ensure a fair process and protect the rights of the appellant. Quoting relevant Supreme Court judgments, the Tribunal emphasized the need for a strong prima facie case to grant stay of recovery, highlighting the importance of balance of convenience, irreparable injury, and public interest in such decisions. Ultimately, the Tribunal found the assessee's application for stay premature and advised the assessee to approach the Commissioner of Income-tax again. It directed the Commissioner to pass a speaking order, following the guidelines set by the Madras High Court in a previous case. The Tribunal dismissed the petition as premature, ensuring that the assessee would not be treated as in default until the Commissioner's decision was properly considered and communicated.
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