Stay of tax recovery granted where a strong prima facie case and balance of convenience justified interim protection pending appeal.

A strong prima facie case is a relevant factor in stay proceedings before the Tribunal, but it must be weighed with prudence, discretion, balance of convenience and the risk of prejudice to recovery. Applying those parameters, the Tribunal found that the assessee had shown a strong case on appeal, the matter was listed for out-of-turn hearing shortly, and immediate recovery was unwarranted; the assessee's undertaking regarding fixed deposits also supported interim protection. Coercive recovery of the disputed demand was therefore restrained pending disposal of the appeals or further orders, and the Assessing Officer was directed not to give effect to the impugned appellate directions until the appeals were decided.

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Issues: Whether the assessee was entitled to stay of recovery of the disputed income-tax demand pending disposal of the appeal.

Analysis: The Tribunal held that, in stay matters before it, the existence of a strong prima facie case is a relevant consideration, though not the sole one. It distinguished the Supreme Court's observations on interim relief in writ proceedings and indirect tax matters, and applied the settled stay parameters of prudence, discretion, circumspection, balance of convenience, and the risk of prejudice to recovery. The Tribunal found that the assessee had shown a strong prima facie case, that the appeal was being fixed for out-of-turn hearing within a short time, and that immediate recovery would not be justified in the meantime. The assessee's undertaking regarding fixed deposits also weighed in favour of interim protection.

Conclusion: The stay petitions were allowed, and coercive recovery of the disputed demand was restrained pending disposal of the appeals or further orders. The Assessing Officer was also directed not to give effect to the impugned appellate directions until the appeals were decided.

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