N.T. Rahamathulla Khan Associates Vs PCIT (Karnataka High Court)
Stay to operate pending CIT(A) appeal – HC sets aside cryptic stay rejection by PCIT- Karnataka HC follows earlier precedent to protect assessee from coercive recovery
The petitioner-firm challenged the stay order dated 15.03.2019 issued by the PCIT, seeking protection against recovery of ₹15.67 crores pending appeal before CIT(A). It was urged that the stay order was mechanical & without reasons, ignoring the prima-facie merits under Ss 11 & 12 and the financial hardship demonstrated.
The Court noted that an identical issue had already been decided by a coordinate bench in W.P. No. 21022/2019 dated 24.05.2023, where a similar cryptic stay rejection was set aside.
Following that precedent, the Court held that the Pr. CIT’s order lacked reasoning, and that no coercive steps should be taken while the appeal before CIT(A) is pending. Hence, to avoid multiplicity & hardship, the writ was disposed in the same terms as the earlier judgment, directing:
- No precipitative recovery action till the appeal is disposed of;
- CIT(A) to expedite disposal of the pending appeal.
Stay rejection order (15.03.2019) was set aside as cryptic. Recovery of demand was stayed till first-appeal disposal. CIT(A) was directed to hear & decide expeditiously. Writ petition disposed accordingly.
