20% of disputed tax demand is not a pre-requisite for putting in abeyance recovery of demand pending first appeal in all cases

Dabur India Limited Vs CIT (TDS) (Delhi High Court)

20% of disputed tax demand is not a pre-requisite for putting in abeyance recovery of demand pending first appeal in all cases

Writ petition were filed challenging the order  dismissing the Petitioner’s application for stay of demand and directing the Petitioner to pay 20% of the total outstanding demand.

The Delhi High Court held that  the requirement of payment of 20% of disputed tax demand is not a pre-requisite for putting in abeyance recovery of demand pending first appeal in all cases. The said pre-condition of deposit of 20% of the demand can be relaxed in appropriate cases. Even the Office Memorandum dated 29th February, 2016 gives instances like where addition on the same issue has been deleted by the appellate authorities in earlier years or where the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee. The High Court further noted that   the Supreme Court in the case of PCIT vs. M/s LG Electronics India Pvt. Ltd. (2018) 18 SCC 447 has held that tax authorities are eligible to grant stay on deposit of amounts lesser than twenty percent of the
disputed demand in the facts and circumstances of a case.

Please become a Premium member. If you are already a Premium member, login here to access the full content.