2026 (9) TMI 2047

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....adjustment of future refunds towards the outstanding demand until disposal of the appeal pending before the Commissioner of Income-tax (Appeals) ["CIT(A)"]. 2. Briefly stated, the petitioner is assessed to income tax by the Income Tax Officer, Ward-1, Bharatpur. For Assessment Year 2018-19, the petitioner filed its return of income on 30.10.2018. 2.1 Upon scrutiny, an assessment order dated 12.03.2021 was passed under Section 143(3) of the Income-tax Act, 1961 ("the Act"), assessing the petitioner's total income at Rs. 5,39,58,417/- and raising a demand of Rs. 2,78,32,572/-. The petitioner preferred an appeal before the learned CIT(A) on 10.04.2021, which remains pending. 2.2 Thereafter, by rectification order dated 17.08.2023 pass....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Rs. 40,00,101/-. A notice dated 23.05.2025 was thereafter issued, stating that Rs. 1,28,63,442/- remained outstanding and requiring payment, failing which coercive recovery proceedings would follow. 3.1 Learned counsel for the petitioner submits that the respondents have acted contrary to the CBDT Office Memoranda dated 29.02.2016 and 31.07.2017 by recovering and retaining more than 20% of the disputed demand during pendency of the appeal. 3.2 It is submitted that no exceptional circumstance has been recorded to justify recovery beyond 20%. The respondents, being subordinate to the CBDT, are bound by its instructions and cannot retain the excess amount without a reasoned departure from the prescribed norm. 4. Per contra, learned c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rcumstances. No such circumstance or reason has been recorded in the present case. 6.2 Once the competent authority has granted stay of the remaining demand upon recording that recovery exceeding 20% has already been made, continued retention of the excess amount cannot be justified. The stay order cannot operate as a basis to retain an amount beyond the very threshold on which stay was granted. Nor can the respondents, during the subsistence of the stay, make further adjustment of refunds in a manner that defeats the protection granted to the petitioner. 6.3 The Revenue may retain 20% of the disputed demand as security during the pendency of the appeal, but the amount recovered beyond that level must be restored. 6.4 During the co....