Delhi HC to hear Congress plea tomorrow seeking stay on IT recovery proceedings

March 11, 2024

The Delhi High Court on Monday listed a plea moved by the Indian National Congress (INC) seeking a stay on the Income Tax notice for recovery of more than Rs 105 crore as outstanding tax for hearing on Tuesday.

On Friday, the Income Tax Appellate Tribunal (ITAT) dismissed the stay plea against the Income Tax Department proceedings of recovery and freezing of their bank accounts.

Though the matter was listed before the Division Bench of Justice Yashwant Verma and Justice Purushaindra Kumar Kaurav on Monday itself but the bench listed the matter for hearing on Tuesday for a detailed hearing.

The Income Tax Appellate Tribunal (ITAT) on Friday dismissed the plea moved by the Congress Party which sought a stay against Income Tax Department proceedings of recovery and freezing of their Bank accounts and said the Stay Application is without merit.

ITAT bench of GS Pannu, Vice President, and Anubhav Sharma, Judicial Member on Friday passed the order and said, “We do not find that the recovery notice under Section 226(3) of the Act issued by the Assessing Officer on February 13, 2024, is lacking in bona fides, so as to require us to intervene.”

At this stage, we may also refer to the reliance placed by the Senior Counsel on various judgments of the Coordinate Benches in order to support the proposition that it was an accepted practice at the level of the Tribunal that the taxpayer is entitled to a stay on the recovery proceedings on payment of 20 per cent of the demand during the pendency of the Appeal before the Tribunal. The aforesaid argument, in our view, is too general and does not merit acceptance, the bench said.
Moreover, as we have already discussed, each application for a stay has to be decided on its own facts and circumstances, and there can be no generalized approach. The stay application is without merit and, it is dismissed accordingly, said the bench in order.

The Bench, in its order, further stated that even after the rejection of the appeal by the CIT (Appeals) on March 28, 2023, no recovery action seems to have been initiated by the assessing officer to recover the demand by February 13, 2024.