Srinibas Beura V. The Income Tax Officer, Ward-1(1), Cuttack and others

WP(C)/35026/2025

AI Insights

Srinibas Beura filed a writ petition challenging the order of the Principal Commissioner of Income Tax, Bhubaneswar-1, which required him to deposit Rs. 5,00,000 to stay the recovery of a tax demand of Rs. 71,12,202 during the pendency of his appeal against the assessment order for the year 2020-21. The petitioner argued that the demand was likely to be reduced to nil and cited financial hardship due to his senior citizen status. The Income Tax Department contended that the PCIT had already significantly reduced the required deposit amount. The court upheld the PCIT's decision, emphasizing the need for compliance with procedural requirements for staying tax recovery.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 824220 (HC-ODISHA)
• Appeal Type: Others
• Pronouncement Date: 19-12-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SUBASH CHANDRA MOHANTY; AVINASH KEDIA
• Assessee Lawyers: BIJAY PANDA
• Keywords: Appeal; Assessment Order; Financial hardship; Income Tax; Stay of recovery
• Section: 147; 226; 220(6); 227

Judgement Text

" Page 1 of 3 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.35026 of 2025 Srinibas Beura …. Petitioner Mr. Bijay Panda, Advocate -versus- The Income Tax Officer, Ward-1(1), Cuttack and others …. Opposite Parties Mr. Subash Chandra Mohanty, Senior Standing Counsel along with Mr. Avinash Kedia, Junior Standing Counsel for the Income Tax Department CORAM: THE HON’BLE THE CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE MURAHARI SRI RAMAN Order No. ORDER 18.12.2025 01. 1. Aggrieved by order dated 8th September, 2025 passed by the Principal Commissioner of Income Tax, Bhubaneswar-1 (for short, “PCIT”) granting stay of recovery of demand during pendency of appeal filed against the assessment order dated 24th February, 2025 before the Commissioner of Income Tax (Appeal) (for short, “CIT”) subject to deposit of Rs.5,00,000/- on or before 10th December, 2025, the present writ petition has been filed under the provisions of Articles 226 & 227 of the Constitution of India. 2. It is submitted by Mr. Bijay Panda, learned counsel that the petitioner having filed appeal before the CIT(A) on 6th May, 2025 against the assessment framed under Section 147 of the Income Tax Act, 1961 (for brevity, “IT Act”) raising a demand of Rs.71,12,202/- pertaining to assessment year 2020-21 vide order dated 24th February, 2025, a petition under Section 220(6) of said Act was filed before the Assessing Officer (be called “AO”) Printed from counselvise.com Page 2 of 3 praying therein not to treat the petitioner defaulter and not to take coercive measure for recovery of demand. In consideration thereof, the AO directed the petitioner to pay Rs.14,22,440/-, i.e., 20% of the disputed tax demand as a condition for not to take coercive measures during pendency of the appeal. However, aggrieved thereby, the petitioner having approached the PCIT for modification of such order, he was directed to deposit a sum of Rs.5,00,000/- on or before 10th December, 2025 vide order dated 8th September, 2025, against which this writ petition has been filed. 2.1. It is further submitted by the learned counsel for the petitioner that there is every possibility that the entire demand would be reduced to nil and there is fair chance of success in the appeal. As the petitioner, a senior citizen, is facing financial hardship to comply with the order of the PCIT, the present writ petition is filed for favourable consideration. 3. Mr. Subash Chandra Mohanty, learned Senior Standing Counsel being assisted by Mr. Avinash Kedia, learned Junior Standing Counsel appearing for the Income Tax Department submitted that since the PCIT has drastically reduced the amount to be deposited during pendency of the appeal as a condition for stay of recovery of total demand of Rs.71,12,202/-, this Court may not exercise extraordinary jurisdiction by showing indulgence in the impugned order. 4. Heard learned counsel appearing for the petitioner and learned Senior Standing Counsel appearing for the Income Tax Department. 5. Perusal of record reveals that the total demand raised in the assessment was to the tune of Rs.71,12,202/-, which is before the Appellate Authority for adjudication. The Assessing Authority Printed from counselvise.com Page 3 of 3 having adhered to the circular issued by CBDT, directed for deposit of Rs.14,22,440/- as a condition not to proceed with recovery of demand during pendency of the appeal. However, on consideration of the audit report/financial statement as furnished by the learned counsel appearing for the petitioner before the PCIT, and appreciating financial hardship of the petitioner, he reduced the said amount and directed to deposit Rs.5,00,000/-. 5.1. No further material is adduced than what was before the PCIT. Since the PCIT having taken into consideration the plight of the assessee directed Rs.5,00,000/- to be paid by the petitioner on or before 10th December, 2025 as a condition precedent for stay the recovery of rest of demand during pendency of the appeal, this Court finds that such direction is reasonable and, therefore, the order of the PCIT does not warrant exercise of discretionary power. As the date of deposit as specified by the PCIT has already been lapsed, we extend the period stipulated by the PCIT for a period of fifteen days hence. 5.2. Needless to observe that in the event the petitioner fails to deposit the amount, as directed by the PCIT, within the period so extended, the Income Tax Department is at liberty to proceed in accordance with law. 6. With the aforesaid observation and direction, the writ petition is disposed of. Interlocutory Application(s) pending, if any, shall also stand disposed of. (Harish Tandon) Chief Justice (M.S. Raman) Judge MRS/Laxmikant Printed from counselvise.com Digitally Signed Signed by: LAXMIKANT MOHAPATRA Designation: Senior Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 19-Dec-2025 19:10:20 Signature Not Verified "