Recovery of Demand by the ITO in case of Appeal Preferred against order.

[Haresh Raithatha]

Dear SIr

A demand of ₹ 1212910\- (Tax ₹ 670000+540000 Interest) for A.Y,. 2010-11 raised by the A.O as per order u/s 263. We have preferred an appeal against the order and paid ₹ 100520\- being 15% of Tax Amount as per order. The AO is insisting to pay 15% of Total amount i.e. Rs.181900\- (Income tax +Interest). He has attach my bank account for paying differencial of Rs/81417\-... Can He do so? Since the assesse is agreevied with Tax demand and preferred an apppeal. How the interest on Demand of Income tax can recover since the tax is also not accepted by the assessee...

PL advise

[DR.MARIAPPAN GOVINDARAJAN]

When the appeal is pending before the Appellate Authority the Assessing Officer cannot demand any amount outstanding. Did you get stay of the order of the Assessing Officer from the Appellate Authority? You may file stay petition before the Appellate Authority, if you have not already filed. Or you may file a writ petition before the High Court challenging the demand of Assessing Officer.

AI Summary

Appeal pending prevents recovery of disputed tax or interest; obtain a stay from the appellate authority or seek writ. Assessing Officer sought recovery of an additional deposit by treating interest as part of the base for the 15% deposit, and attached the assessee's bank account; while an appeal against the order is pending the AO should not press outstanding recovery without a stay. The recommended remedies are to apply for a stay before the appellate authority or to challenge the recovery by filing a writ petition in the High Court.