Delhi High Court On Recovery Of Demand Despite Appeal And Absence Of Stay Application
The Case
INTUGINE TECHNOLOGIES PRIVATE LIMITED Vs INCOME TAX OFFICER, WARD 12 1 & ANR.
Case No.: W.P.(C)/13661/2026
Decided on: 09/17/2026
CNR: DLHC010443182026 ·
High Court of Delhi
The Legal Issue
Whether the respondents were justified in effecting recovery of the outstanding demand, including by adjustment of refund, when the petitioner had filed an appeal but no stay application either before the Assessing Officer or the Appellate Authority.
Facts of the Case
The petitioner filed a writ petition praying for quashing of the Impugned Intimation dated 24.02.2026 issued u/s 245 of the Act and consequential adjustment of refund against the disputed demand pertaining to A.Y. 2022-23. The petitioner had preferred an appeal on 27.03.2024 against the Assessment Order dated 21.03.2024, whereby a demand of Rs.1.21 crores was raised. Notwithstanding the Office Memorandum (OM) dated 29.02.2016, as modified by the OM dated 31.07.2017, the respondents recovered a sum of Rs.72,75,800/-. No stay application was filed by the petitioner until the date on which the recovery was effected.
Summary of the Decision
The Court held that in the absence of any stay application having been filed by the petitioner, the respondents were not wrong in effecting recovery. The refund as claimed by the petitioner in excess of 20% of the amount cannot be granted. The Court observed that the OM dated 29.02.2016 enjoins upon an assessee to move a stay application, and mere filing of an appeal does not operate as a stay of the demand. The AO is required to dispose of a stay petition within two weeks of filing. Considering that a substantial amount has already been recovered against the total demand of Rs.1.21 crores, the Court ordered that the respondents shall not effect any further recovery from the petitioner until the disposal of the appeal by the Commissioner of Income Tax (Appeals). The present petition stands disposed of, accordingly, along with pending application(s), if any.
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