Stay on tax recovery during appeal was continued, subject to partial deposit and expedited hearing of the pending appeal.

Coercive recovery of the balance tax demand was kept in abeyance during pendency of the assessee's appeal, subject to a stipulated partial deposit after the accounts were defreezed. The interim arrangement also protected the assessee against recovery action for the remaining demand until disposal of the appeal and for a further period thereafter. The appellate authority was directed to hear the pending appeal expeditiously after granting due opportunity to the assessee.

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Issues: Whether the demand recovery should remain stayed during pendency of the appeal before the Commissioner of Income Tax (Appeals), subject to a partial deposit by the assessee, and whether the appellate authority should be directed to hear the appeal expeditiously.

Analysis: The petition was disposed of by working out an interim arrangement under which the assessee was required to deposit Rs. 1 crore within a stipulated time after the accounts were defreezed. The balance demand was kept in abeyance till disposal of the appeal and for a further period thereafter. The appellate authority was also directed to hear the pending appeal expeditiously after giving due opportunity to the appellant.

Conclusion: The assessee obtained protection against coercive recovery of the balance demand, subject to the stipulated deposit, and the appellate proceedings were directed to be decided expeditiously.

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