The court deprecated delay of over six years in deciding stay application and appeal.  Held that excess recovery was unjustified and directed refund of Rs.6,05,030/- within four weeks. Directed Commissioner (Appeal) to expedite disposal of appeal by 31 May 2025.

Delay in adjudicating stay application and appeal affects revenue and taxpayer interests. Adjustment of refund after voluntary payment of 20% demand without deciding stay application was not legally tenable. Expeditious disposal of appeals mandated under Section 250(6A) of the Income Tax Act.

Acts and Sections Discussed:

1. Constitution of India, 1950 — Article 226 — Extraordinary Writ Jurisdiction

2. Income Tax Act, 1961 — Section 143(3) — Scrutiny Assessment — Section 143(1) — Intimation — Section 250(6A) — Timely Disposal of Appeals

Subjects: Excess Tax Recovery — Stay of Demand — Adjustment of Refund — Delay in Adjudication — Timely Disposal of Appeals

Nature of the Litigation: Writ Petition challenging excess tax recovery and delay in adjudication of stay application and appeal.

Relief Sought: Petitioner sought refund of Rs.6,05,030/- adjusted against the demand for assessment year 2015-2016 and expedited disposal of pending appeal.

Reason for Filing the Case: Unjustified adjustment of refund despite prior payment of 20% demand and failure to decide stay application for over six years.

Previous Decisions: Assessment order passed under Section 143(3) for AY 2015-2016 raising demand of Rs.37,91,550/-. Stay granted by Assessing Officer for balance amount of Rs.30,33,240/- subject to conditions.

Issues:

1. Whether the adjustment of refund amounting to Rs.6,05,030/- was justified despite the petitioner’s prior compliance with 20% demand.

2. Whether the delay of more than six years in adjudicating the stay application and appeal was legally sustainable.

Submissions/Arguments:

(a) Petitioner:

• Voluntarily deposited 20% of demand before filing stay application.

• Adjustment of refund for AY 2022-2023 led to excess recovery, contrary to stay order.

• Sought direction for refund and timely disposal of pending appeal. (b) Respondents:

• Justified adjustment of refund, citing system limitations.

• Argued refund adjustment occurred before the stay order.