The Single bench of Kerala High Court has held that the demand of Income tax stays automatically on a deposit of 20% of assessed tax and directed to decide stay petition.
Preetha Ajay, the petitioner filed a petition to issue a writ of mandamus, and such other writ, order or direction, directing the second Respondent to dispose of the appeal and application filed before the 2nd Respondent as expeditiously as possible. Further requested to grant stay of recovery of tax due under assessment order which is now sought to be recovered through notice.
The petitioner was aggrieved by the assessment order under Section 147 read with Sections 144 and 144B of the Income Tax Act. The petitioner has filed an appeal before the 2nd respondent along with a stay petition respectively. Counsel for the petitioner submitted that the 2nd respondent has not decided the application for stay and in the meantime, the demand in pursuance to the order is being enforced.
Sri. Jose Joseph, Senior Standing Counsel for the Income Tax Department does not have an objection to the direction for early disposal of the stay petition. However, he submitted that no direction should be passed staying the demand in pursuance of the assessment order. He further submitted that according to the relevant Office Memorandum, if the petitioner deposits 20% of the assessed tax, there would be an automatic stay of the further demand.
Justice Dinesh Kumar Singh held that the 2nd respondent should decide the stay petition expeditiously within two months and for two months the demand in pursuance to the assessment order should not be enforced.
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