VSAIPPL-SMC(JV) Vs ITO (Telangana High Court)
Summary: The Telangana High Court considered three writ petitions filed by M/s.VSAIPPL-SMC(JV) against orders dated 09.04.2025 and 30.01.2026 concerning stay of outstanding income-tax demands for assessment years 2022-2023, 2023-2024 and 2024-25. The impugned orders required payment of 20% of the demand as a condition for staying the remaining demand.
The petitioner contended that the authorities had substantially relied on CBDT instructions dated 21.03.1996, as partly modified on 29.02.2016 and again on 31.07.2017, prescribing payment of 20% of outstanding demand. It was argued that, while deciding an application under Section 220(6) of the Income Tax Act, 1961 for interim stay, the authority must independently exercise its statutory discretion on the merits of the application and cannot treat executive instructions as controlling. The Income Tax Department, on the other hand, submitted that although the instructions were referred to, the authorities had also considered the petitioner’s submissions before imposing the 20% condition.
The Division Bench examined the impugned orders and found that both authorities had, in deciding the stay applications, predominantly proceeded on the basis of the CBDT instructions. The Court noted that the order dated 09.04.2025 began with reference to the instructions and that respondent No.2 also heavily relied upon the departmental requirement of depositing 20% for grant of stay. In the Court’s view, such reliance was totally uncalled for.
