2025 (3) TMI 656 - HC - Income Tax

Court Lowers Tax Deposit Requirement to 15%, Orders Bank Account De-freezing Pending Appeal Resolution

In the case before the Madras HC, the petitioner contested orders requiring a 20% tax deposit on a disputed assessment. The court modified the order, ... Stay of demand - petitioner argued that they had already deposited 15% of the disputed tax thus condition imposed by the first respondent requiring the petitioner to pay 20% of the disputed tax may be reduced to 15% - HELD THAT:- There is no dispute on the aspect that challenging the assessment order passed by the first respondent dated 30.09.2021, the petitioner has filed an Appeal before the respondent/CIT(Appeals) and the petitioner also filed a Petition for stay. However, in the interregnum, since the petitioner has been insisted to pay 20% of the disputed tax, failing which, the petitioner would be faced with recovery proceedings, the petitioner requested the first respondent to adjust the payment of 20% from and out of the refund payable to the petitioner, however, the first respondent without considering such request, rejected the Petition for Stay. However, considering the fact that the petitioner has already deposited 15% of the disputed tax and finds the conditional order requiring them to pay 20% as onerous, this Court is inclined to modify the condition imposed on the petitioner from 20% into 15%. Accordingly, the impugned order passed by the first respondent directing the petitioner to pay 20% of the disputed tax stands modified to 15%, which the petitioner has already deposited. This Writ Petition challenges orders dated 19.12.2024 and 03.01.2025 arising from an assessment order dated 30.09.2021. The petitioner had filed an Appeal and a stay petition; the tax authority insisted on payment of 20% of the disputed tax (per CBDT instruction) and threatened recovery proceedings, while the petitioner sought adjustment of that payment against departmental refunds. The Court found the 20% pre-deposit condition 'onerous' given the petitioner had already deposited 15% and therefore, 'the impugned order passed by the first respondent dated 19.12.2024, directing the petitioner to pay 20% of the disputed tax stands modified to 15%,' which amount has been deposited. Until disposal of the Appeal, the tax authority is 'restrained from taking any coercive action' against the petitioner. The freezing of the petitioner's bank accounts was annulled and the authority directed to issue appropriate directions for immediate de-freezure. Writ Petition disposed of; no costs.