Stay of tax demand pending appeal granted where prima facie case and balance of convenience justified postponing recovery.

Stay of outstanding tax demand pending appeal may be granted where the assessee shows a prima facie arguable case and the balance of convenience favours deferring recovery. Here, the Tribunal found an arguable case on attribution of profits in a transfer pricing-related matter and considered the risk of prejudice if collection proceeded before the appeal was heard. The Revenue's interests were protected by conditions requiring part payment, security for the balance, and an expedited hearing. On that basis, stay of demand was granted subject to the imposed safeguards.

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Issues: Whether the assessee was entitled to stay of the outstanding tax demand pending disposal of the appeal.

Analysis: The stay petition was considered on the settled principles governing interim relief, including the existence of a prima facie arguable case, balance of convenience, and the risk of prejudice if recovery proceeded before the appeal was heard. The assessee showed an arguable case on attribution of profits and the demand arose in a matter already carried through transfer pricing examination and assessment. The Tribunal also balanced the interests of Revenue by imposing protective conditions for part payment, security for the balance, and expeditious hearing.

Conclusion: The stay of demand was granted in favour of the assessee, subject to the conditions imposed by the Tribunal.

Ratio Decidendi: Stay of recovery may be granted where the assessee shows a prima facie arguable case and the balance of convenience favours postponing collection, provided the Revenue's interests are safeguarded by appropriate conditions.

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