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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
APARESH KUMAR SINGH, CJ, G.M.MOHIUDDIN
Spandana Rural and Urban Development Organisation – Appellant
Versus
Commissioner of Income Tax Exemptions – Respondent
| Table of Content |
|---|
| 1. evaluation of petitioner's financial claims and legal obligations. (Para 2 , 3 , 4) |
| 2. assessment of financial capability against tax demands. (Para 6) |
ORDER :
2. Earlier, the order dated 23.08.2025 passed by respondent No.1 - Commissioner of Income-tax (Exemption), Hyderabad (for short ‘CIT (Exemption)’), granting a conditional stay of the demand on making partial payment of Rs.8.00 crore on or before 01.09.2025 in relation to the proceedings for recovery of taxes for the Assessment Year 2023-24 during pendency of the appeal was set aside by this Court vide order dated 23.09.2025 in Writ Petition No.28734 of 2025 and remanded to CIT (Exemption) to pass a fresh speaking order after considering the grounds raised by the assessee in its stay petition. Detailed speaking order dated 13.10.2025 passed thereafter by CIT (Exemption) whereby the petitioner was directed to deposit Rs.8.00 crore, which is less than the CBDT guidelines of 20%, on or before 28.10.2025 for the Assessment Year 2023-24 is under challenge in the present Writ Petition. The relevant part of the said order is extracted hereunder.
1. Mere pendency of appeal does not warrant automatic stay of demand. As
The court affirmed that a stay of tax demand requires compelling proof of financial hardship, emphasizing that mere appeal pendency does not guarantee automatic relief.
The Income Tax authority must address all specific grounds presented in a stay application thoughtfully and thoroughly.
Assessments deemed excessively high must consider genuine hardship, allowing stays without mandatory pre-payment when necessary to protect taxpayer interests.
The requirement of payment of twenty percent of disputed tax demand is not a pre-requisite for putting in abeyance recovery of demand pending first appeal in all cases. The tax authorities are eligib....
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