Law:

Section:

Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default - Assessment year 2000-01 - Assessing Officer on an application moved by assessee for stay of recovery of demand of Rs. 138.02 crores till disposal of first appeal, directed assessee to deposit whole of demand in instalments - In immediately preceding assessment year on an almost similar set of facts, assessee was directed to deposit only Rs. 140 crores against a demand of Rs. 405 crores - Whether, therefore, deposit of Rs. 40 crores by assessee with department was sufficient for stay of recovery of demand till disposal of appeal - Held, yes P. Chidambaram, C.S. Aggarwal and Arjun Pant for the Petitioner. Sanjeev Khanna and Subhash C. Sharma for the Respondent. JUDGMENT 1. An order dated September 24, 2003, passed by the Additional Commissioner of Income-tax, Range 6, New Delhi, directing the petitioner to deposit the additional rectified demand of Rs. 138.02 crores in respect of the assessment year 2000-01, within the specified time, is under challenge in this writ petition. 2. Briefly stated, the material facts giving rise to the petition are as follows : On the completion of assessment for the aforementioned assessment year, an additional demand of Rs. 134 crores was created against the petitioner on account of certain additions/disallowances, mainly under sections 43B, 80-IA and 80HHC of the Income-tax Act, 1961. The said demand was later on rectified to Rs. 138.02 crores. Aggrieved, the petitioner preferred appeal to the Commissioner of Income-tax (Appeals). Simultaneously, the petitioner moved an application with the Assessing Officer for stay of recovery of the said demand still the disposal of appeal. By the impugned order, the Assessing Officer has directed the petitioner to make an interim payment of Rs. 50 crores within seven days of receipt of the said letter and pay the balance amount in six equal monthly instalments, starting from the month of October, 2003. The petitioner has also been informed that any default in payment in terms of the said letter would invite action for recovery as per the procedure prescribed under…

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