https://www.taxtmi.com/caselaws?id=450992 Adjustment of a disputed income-tax demand against refunds while a stay application under s. 220(6) remained pending was held arbitrary and unlawful. The HC held that CBDT OMs prescribing 15%/20% deposit do not create an inflexible pre-condition for entertaining or granting stay; the AO must exercise discretion based on factors such as prima facie case, undue hardship, and likelihood of success, consistent with SC principles on "undue hardship." Since the stay application had neither been considered nor disposed of when the adjustment was made, the revenue acted on a misconceived premise and unfairly adjusted the demand against refunds. The writ petition was allowed, and the adjustment was set aside, directing refund processing after adjusting only 20% of the disputed demand. en-us Fri, 01 Mar 2024 00:00:00 +0530 Fri, 26 Dec 2025 18:09:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=450992 Adjustment of a disputed income-tax demand against refunds while a stay application under s. 220(6) remained pending was held arbitrary and unlawful. The HC held that CBDT OMs prescribing 15%/20% deposit do not create an inflexible pre-condition for entertaining or granting stay; the AO must exercise discretion based on factors such as prima facie case, undue hardship, and likelihood of success, consistent with SC principles on "undue hardship." Since the stay application had neither been considered nor disposed of when the adjustment was made, the revenue acted on a misconceived premise and unfairly adjusted the demand against refunds. The writ petition was allowed, and the adjustment was set aside, directing refund processing after adjusting only 20% of the disputed demand. Case-Laws Income Tax Fri, 01 Mar 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=450992