TaxTMI 
TaxTMI 
TaxTMI 
Doctrine of No Automatic Stay in Tax Recovery : Clause 369, Income Tax Bill, 2025 Vs. Section 265, Income-tax Act, 1961
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....ncome-tax Act, 1961, which has governed similar circumstances for decades. Both provisions are pivotal in the administration of tax law, as they directly address the interplay between the taxpayer's right to appeal and the State's right to collect revenue. The underlying principle is to prevent the delay of tax collection merely because appellate remedies are being pursued, unless a specific stay is granted. This commentary provides a detailed analysis of Clause 369, interprets its legislative intent, examines its practical implications, explores its legal nuances, and compares it with Section 265 of the 1961 Act, highlighting similarities, differences, and their significance in the broader income tax framework. Objective and Purp....
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....appeal has been preferred to the High Court or the Supreme Court, tax shall be payable as per the assessment made in the case." The operative parts are: * Irrespective of the fact that an appeal has been preferred to the High Court or the Supreme Court: This phrase indicates that the provision is triggered when an appeal is pending before the highest judicial forums. It does not expressly mention lower appellate forums such as the Commissioner (Appeals) or the Income Tax Appellate Tribunal (ITAT), focusing instead on the final stages of judicial review. * Tax shall be payable as per the assessment made in the case: This mandates payment of tax as determined by the assessment order, regardless of the pendency of appeal. The clause is c....
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....udicial interpretation. The clause does not preclude the possibility of obtaining a stay or interim relief; it merely establishes that, by default, tax is payable as per the assessment. Comparative Analysis with Section 265 of the Income-tax Act, 1961 Key components: * Notwithstanding that a reference has been made to the High Court or the Supreme Court: This covers both appeals and references (the latter being a procedure where questions of law are referred to higher courts for determination). * Or an appeal has been preferred to the Supreme Court: Covers direct appeals to the apex court. * Tax shall be payable in accordance with the assessment made in the case: The operative mandate for payment. Key Points of Comparison * Refer....
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....als. * The core principle remains unchanged: assessed tax is payable notwithstanding pendency of appeal, unless stayed. The language has been modernized, perhaps for clarity and alignment with current practice. Legal Continuity and Change * While the substantive effect of both provisions is the same, Clause 369 represents a streamlining of language and scope, eliminating obsolete references and focusing on the current appellate landscape. This demonstrates legislative responsiveness to procedural reforms in tax litigation. * No substantive rights or obligations are altered; the taxpayer's burden to pay assessed tax pending appeal continues, with the safeguard of judicial stay remaining available. Potential for Judicial Clarifica....
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....Reference Proceedings Included? Yes ("reference has been made") No (reference omitted) Stage of Proceedings Covered Reference and Appeal at highest judicial forums Appeal at High Court and Supreme Court Obligation to Pay Payable "in accordance with the assessment made in the case" Payable "as per the assessment made in the case" Effect of Filing Appeal/Reference No suspension of obligation to pay No suspension of obligation to pay Potential Issues and Ambiguities * Omission of References: The omission of "reference" in Clause 369 may raise questions in rare cases where reference procedures persist or are revived. However, given the obsolescence of references, this omission is likely intentional and unproblematic. ....