2019 (7) TMI 374 - 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:
Challenge against interim order for payment of disputed tax amount pending appeal.

Analysis:
The High Court of Kerala considered writ appeals challenging an interim order by the Commissioner of Income Tax (Appeals) requiring payment of 20% of the disputed tax amount pending appeal. The learned single Judge had reduced the payment condition to 10% in the original judgment being challenged by the appeals.

The appellants argued that the liability of the banks to pay income tax had been previously decided by a Full Bench of the Court in a specific judgment. They contended that the appellate authority could only remand the matter for a fresh inquiry 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 part payment condition 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, after considering the peculiar aspects of the case in light of 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 to be modified.

Consequently, the writ appeals were allowed, the single Judge's judgments were set aside, and the Commissioner of Income Tax (Appeals) was directed to consider and dispose of the statutory appeals filed by the appellants promptly. The recovery and collection of the tax assessed were to be kept in abeyance pending the disposal of such appeals.