The Revenue appealed against the Tribunal’s order which extended a stay of demand beyond 365 days. The High Court dismissed the appeal, noting that the issue was no longer res integra. It relied on the binding precedent of the Supreme Court in DCIT v. Pepsi Foods Ltd (2021) 282 Taxman 10/ 433 ITR 295 (SC)   which had affirmed the decision striking down the third proviso to Section 254(2A) of the Income-tax Act, 1961. The Court reiterated that the said proviso, which mandated the vacation of a stay after 365 days even if the delay in appeal disposal was not attributable to the assessee, was arbitrary and illegal. Consequently, the High Court held that the Tribunal was correct in law in extending the stay of demand beyond the 365-day period in such circumstances.