Court sets aside reduced payment condition in appeal process, citing hardship to banks. Commissioner directed to suspend tax recovery.

The Court allowed the writ appeals, setting aside the single Judge's judgment that reduced the payment condition from 20% to 10% of the disputed tax amount during the appeal process. The Court held that based on a previous Full Bench decision, insisting on payment during the appeal could cause hardships to the banks. The Court modified the judgments, directing the Commissioner of Income Tax (Appeals) to promptly consider and dispose of the statutory appeals filed by the appellants in accordance with the Full Bench decision, suspending the tax recovery and collection during the appeal process.

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Issues Involved:
Challenge against interim order for payment of disputed tax amount pending appeal.

Analysis:
The writ appeals were considered together as the issues were identical. The challenge raised was against the interim order by the Commissioner of Income Tax (Appeals) requiring payment of 20% of the disputed tax amount during the appeal process. The single Judge had reduced this condition to 10%, which was being challenged in these appeals.

The appellants argued that the liability of the banks to pay income tax had already been decided by a Full Bench of the Court in a previous judgment. They contended that the appellate authority could only remand the matter for further investigation 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 decision to require part payment 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, considering the peculiar aspects involved based on 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 modified, and the writ appeals were allowed. The single Judge's judgment was set aside, directing the Commissioner of Income Tax (Appeals) to consider and dispose of the statutory appeals filed by the appellants promptly, in accordance with the Full Bench decision, and to suspend the recovery and collection of the tax assessed during the appeal process.

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