The court emphasized the necessity for the tax authority to properly address specific grounds in a stay application related to tax recovery.

ORDER:

Ms.Akruti Agarwal, learned counsel for the petitioner.

Mr.Vijhay K.Punna, learned Senior Standing Counsel for Income Tax Department appears for respondents No.1 to 3, virtually.

2. The petitioner – assessee has assailed the order dated 23.08.2025 passed on the stay application by the Commissioner of Income Tax (Exemption), Hyderabad [for short, ‘the CIT (Exemption)’], in respect of the outstanding amount of Rs.53,74,67,120/- relatable to the assessment year 2023-24.

3. The impugned order reads as under:

“GOVERNMENT OF INDIA

MINISTRY OF FINANCE

INCOME TAX DEPARTMENT

CIT (EXEMPTION), HYD

Sir/Madam/M/s.

Subject:Online service of Orders - Letter

Sub: Decision on Stay Application – Request for Partial Payment – Reg.-

This is with reference to your application for stay of collection of taxes, submitted before the Commissioner of Income Tax (Exemptions), Hyderabad. As per this the demand payable are as under:

After carefully examining all relevant facts and circumstances of your case, and also considering the recent order of the Hon’ble Andhra Pradesh High Court in the case of M/s. The General and Technical Education Society (IA No.1 of 2025 in W.P.No.12728 of 2025) and also considering the Hon’ble High Court of Telangana order in the case of Zoos and Parks Authority of Telangana v. CIT (E) (2024) 467 ITR 235 (Telangana)(HC), your stay application has been considered.

It is, therefore, decided that your stay petition is considered provided you pay an amount of Rs.80000000/- on or before 01.09.2025 and produce copies of challans before the Assessing Officer of your case and marked a copy to the undersigned.

Please note that if you fail to company with this directive by the due date, the Assessing Officer will be at liberty to initiate coercive recovery proceedings under Section 226 (3) of the I.T.Act, 1961 without any further communication.

Further you are informed to treat this matter with urgency and ensure compliance within the stipulated timeframe to avoid any further action by the Department.

BALA KRISHNA BATTULA

CIT (EXEMPTION), HYD”

4. Learned counsel for the petitioner has drawn the attention of this Court to the stay application, which is at Annexure P8.

5. The relevant part of the stay application is also extracted hereunder:

“3. For AY 2023-24 the assessee filed its return of income on 30-11-2023 u/s 139(4A) admitting NIL income. The case was selected for compulsory scrutiny for verifying six issues mentioned on pages 1 and 2 of the assessment order. During the course of assessment proceedings, the assessee filed evidences required and also clarifications on various issues raised by the AO. The assessment was completed u/s 143(3) r.w.s. 144B vide order dated 20-03-2025 and the total income was determined at Rs. 93,38,67,867/- by making addition on two grounds i.e., Rs. 4,68,28,788/- representing surplus income and addition of Rs.88,70,39,079/- being capital expenditure disallowed u/s 13(10) r.w.s 13(8). The penalty proceedings u/ s 270A were also initiated.

4. From the assessment order, it may kindly be seen the addition made by the AO are on misinterpretation of provisions of section 2(15) and section 13 of Income Tax Act. It is apparent that the additions made by the AO is totally unwarranted and not sustainable in appeal. The assessee has already challenged the assessment order in appeal before CIT(A), NF