2009 (4) TMI 327 - HC - Income Tax

Recovery of tax application for stay pending appeal - petitioner submitted that against the assessment she has filed an appeal before the Commissioner of Income-tax (Appeals) along with a stay application, but no order on her stay application has been passed by the appellate authority till date and in the meantime ITO is proceeding to recover the amount of penalty, which has been imposed as a result of assessment Held that Commissioner (A) should pass order on application expeditiously

Summary

The 2009 judgment by the Allahabad High Court, delivered by S. Rafat Alam and Sudhir Agarwal JJ., addressed a case where a petitioner filed an appeal against an assessment with the Commissioner of Income-tax (Appeals) and also submitted a stay application. The petitioner complained that the appellate authority had not made any decision on the stay application, yet the tax recovery process was ongoing. The respondents argued that the appellate authority could not grant an interim order without a prima facie case and balance of convenience. The court acknowledged the need for caution in granting interim orders in tax matters but criticized the appellate authority for failing to act on the stay application. The judgment cited legal precedents supporting the petitioner's argument that the appellate authority had the power to grant interim orders. The court directed the appellate authority to decide on the stay application within 15 days and urged the Central Board of Direct Taxes to issue a circular to ensure timely disposal of such applications to prevent unnecessary litigation. The writ petition was ultimately disposed of with this directive.