Law:

Section:

Section 226 of the Income-tax Act, 1961 - Collection and recovery of tax - Other modes of recovery - Assessment year 2002-03 - Assessing Officer made certain addition by disallowing marketing expenses and service charges claimed by assessee and demanded tax and interest - Assessee's appeal before Commissioner (Appeals) was pending - Assessee filed application for stay of recovery of demand on ground that in earlier years same disallowances had been made and demand was stayed by Tribunal/High Court - Said stay application was rejected - Thereafter, revenue attached bank accounts of assessee - Whether looking to stay orders passed in earlier years and in view of facts that appeals for earlier years were fixed for hearing before Tribunal and that, revenue had already recovered an amount by attaching bank accounts of assessee, till disposal of appeal pending before Commissioner (Appeals), demand of tax and interest should be stayed - Held, yes FACTS In course of assessment proceedings for the assessment year 2002-03, the Assessing Officer made certain addition by disallowing the marketing expenses and service charges claimed by the assessee. After making the above addition to the income, demand of tax and interest had been raised against the assessee. The appeal filed against the assessment order was pending before the Commissioner (Appeals). The assessee made an application before ACIT seeking stay of recovery of demand on ground that appeal filed against assessment order was pending and that the demand raised against assessee for earlier years wherein similar disallowances were made had been stayed by the Tribunal/High Court. The said stay application was rejected. Before service of the said order to the assessee, the bank accounts of the assessee were attached by the department by various notices. On petition : HELD In the instant case, the dispute regarding the allowability of the marketing expenses and service charges incurred by the assessee related back to the assessment year 1999-2000. In all the assessment years commencing from 1999-2000, the Assessing Officer had disallowed the above expenses and after adding the same to the income, demand had been raised…

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