High Court affirms tax deposit discretion pending appeal. Investment company to pay 25%. Stay granted, no costs.

The High Court upheld the authority's discretion in determining the percentage of tax to be deposited pending appeal. The petitioner, an investment company, was directed to pay 25% of the total tax demanded in two installments. The first installment was due before the appeal hearing date, with the balance to be paid subsequently. The Court granted a stay on the demand pending appeal under the revised payment terms, without imposing any costs.

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Issues:
1. Rejection of stay petition by the first respondent
2. Demand of payment pending appeal
3. Discretion of authority in determining percentage to be deposited
4. Modification of the order passed

Analysis:
1. The petitioner, an investment company, filed a writ petition to challenge the order rejecting the stay petition related to the demand arising from the assessment order for the assessment year 2011-12. The petitioner contended that it was an investment company with minimal trading activities, but the Assessing Officer completed the assessment and demanded a substantial amount as tax, including interest. The petitioner appealed the assessment, but the first respondent rejected the stay petition without a hearing, directing the petitioner to pay 50% of the total demand within a week.

2. The petitioner argued for leniency in payment of the demanded tax, stating readiness to proceed with the appeal. The Standing Counsel for the Income Tax Department defended the order, emphasizing its basis on the merits of the case. The High Court considered both arguments and reviewed the records.

3. The High Court acknowledged the discretion of the authority in determining the percentage of tax to be deposited pending appeal. While upholding the authority's decision, the Court also considered the petitioner's financial difficulties and modified the payment terms. The petitioner was directed to pay 25% of the total tax demanded in two installments, with the first installment due before the appeal hearing date and the balance to be paid subsequently.

4. Consequently, the Court disposed of the writ petition, granting a stay on the demand pending appeal upon payment of 25% of the total tax demanded as per the revised schedule. The judgment concluded without imposing any costs, closing the connected miscellaneous petition.

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