S. 226 : Collection and mode of recovery – Recovery of tax –Pendency of appeal before CIT( A) – Stay of demand – Non-speaking order– Application of mind – Principles of natural justice – Allowing the writ, the Court held that the order rejecting the assessee’s stay application was a non-speaking order passed without considering the submissions made by the assessee- The matter was remanded to the Principal Commissioner for fresh consideration after granting a hearing and by passing a reasoned speaking order- Till disposal of the stay application afresh, the Revenue was restrained from taking any coercive recovery action. [S. 220(6), 226(3), 250, Art. 226]
The assessee had filed a detailed stay application pending disposal of appeal before the CIT(A), which was rejected by the Principal Commissioner in a cryptic manner by merely stating “matter is heard, assessee’s stay application is rejected”, without recording reasons or dealing with the contentions raised. The High Court held that such an order reflects complete non-application of mind and violates principles of natural justice. Consequently, the impugned order rejecting the stay application and the consequential recovery notice issued under section 226(3) were set aside, and the matter was remanded to the Principal Commissioner for fresh consideration after granting a hearing and by passing a reasoned speaking order. Till disposal of the stay application afresh, the Revenue was restrained from taking any coercive recovery action. (WP (L) No. 40617 of 2025, dt. 15-12-2025)( AY. 2023-24)
Shalina Laboratories Pvt. Ltd. v. PCIT (Bom.)(HC) www.itatonline.org.
[Coram : Hon’ble Shri Justice B.P. Colabawalla and Hon’ble Shri Justice Amit S. Jamsandekar]