Stay of recovery pending appeal can be granted through inherent appellate power, with further recovery restrained until appeal disposal.

An assessee who has already filed an appeal may seek stay of recovery pending disposal of that appeal, and the absence of a prior application under section 220(6) does not prevent the appellate authority from exercising its inherent power to grant interim protection. The Court noted the pendency of recovery proceedings, the risk of prejudice to the assessee, and the relevance of the CBDT guidelines. It directed expeditious disposal of the appeal within three months and restrained the revenue from taking further recovery steps pursuant to the demand notice until the appeal is decided.

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Issues: Whether the assessee could seek stay of recovery pending appeal without first invoking section 220(6) of the Income-tax Act, 1961, and whether interim protection against recovery proceedings was warranted pending disposal of the appeal.

Analysis: The petitioner had already preferred an appeal against the assessment and sought stay of collection. The Court accepted that, even if no application had been made under section 220(6), the assessee could invoke the appellate authority's inherent power to stay collection pending appeal. Noting the pendency of recovery proceedings and the need to avoid prejudice, the Court also considered the pendency of the stay application and the guidelines issued by the Central Board of Direct Taxes.

Outcome: The appellate authority was directed to dispose of the appeal expeditiously within three months, and the respondents were restrained from taking further recovery steps pursuant to the demand notice until disposal of the appeal.

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