THE HON’BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND THE HON’BLE SRI JUSTICE G.M.MOHIUDDIN

ORDER:

Heard Ms. Akruti Agarwal, learned counsel appearing for petitioner; Mr. Vijhay K Punna, learned Senior Standing Counsel for Income Tax appearing for respondent Nos.1 to 3 and Sri B. Mukherjee, learned counsel appearing for Sri N. Bhujanga Rao, learned Deputy Solicitor General of India for respondent No.4.

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.

“7. The submissions made by the assessee have been duly considered. However, the request for stay of collection of taxes without any payment cannot be accepted for the following reasons:

1. Mere pendency of appeal does not warrant automatic stay of demand. As per settled principles of law, unless the assessee demonstrates a strong prima facie case and financial hardship, stay of demand without payment cannot be granted.

2. The assessee has not provided any documentary evidence to substantiate the claim of financial incapacity or to demonstrate that any steps have been taken to raise funds to meet the tax demand partially.

3. The high-pitched nature of the demand alone is not sufficient ground for granting stay, particularly when there is no material provided to establish that part-payment is not possible under any circumstances.

4. The Assessing Officer, in the assessment order, has discussed in detail why in his view the assessee's activities do not qualify as charitable within the meaning of section 2(15). These issues pertain to the merits of the appeal and are noted here only for background. It is open to the assessee to advance all such contentions before the CIT(A), who is the statutory appellate authority.

5. The assessee has relied on the Hon'ble Andhra Pradesh High Court's judgment in its own case for an earlier year. However, it has not specifically demonstrated with supporting material that the factual matrix for the year under consideration is identical. Such issues, in any case, fall within the domain of the appellate authority for adjudication, and cannot be conclusively examined in the present proceedings.

6. Without prejudice to the above, it is emphasized that this office cannot step into the role of the appellate authority and decide the merits of additions made by the Assessing Officer. The assessee is at liberty to advance all its arguments before the CIT(A) in the appeal proceedings.

7. The additional contention of the assessee regarding the AO's jurisdiction under section 143(3) read with section 12AB has been duly considered. However, the validity or otherwise of the assessment order and the scope of the AO's powers are matters to be examined in appellate proceedings. While disposing a stay petition under section 220(6), this office cannot assume the powers of appellate authority. Such issues are squarely within the jurisdiction of the appellate authority where the assessee's appeal is already pending. Accordingly, this ground cannot be accepted as a basis for granting full stay of demand without any payment.

7.1 Further, in this regard, reliance is placed on the decision of the