AKAMAI TECHNOLOGIES INTERNATIONAL AG vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INT TAX 1 1 1 DELHI & ANR.
What did the High Court hold?
The Delhi High Court, acknowledging the pending appeal before the ITAT and the parties' agreement on an ad-interim arrangement, disposed of the writ petition with specific directions. The Court held that the Petitioner should file a stay application before the ITAT within two weeks. The ITAT would then consider this application on its merits. Crucially, if the ITAT found it necessary to require a deposit for granting a stay, it was directed to consider the amount of equalization levy already paid (Rs. 13,34,81,786/-) as a substantial deposit. The ITAT would only require the Petitioner to deposit any further amount if it deemed more than the EL amount necessary as a condition for the stay. This arrangement was explicitly stated to be ad-interim, preserving the original character of the EL payment, and the Revenue was restrained from recovering the outstanding demand until the ITAT decided the stay application.
What were the facts?
The Petitioner, Akamai Technologies International AG, filed a writ petition before the Delhi High Court challenging an order dated 17.08.2026 for Assessment Year 2023-24. The Petitioner sought quashing of the impugned order, directions to credit Equalization Levy (EL) of Rs. 13,34,81,786/- against the outstanding demand, and refund of EL already paid amounting to Rs. 13,82,67,125/- (including interest). The Petitioner's appeal was pending before the Income Tax Appellate Tribunal (ITAT). The High Court, initially having doubts about the ITAT's power to allow adjustment of EL against tax demand, directed the parties to explore a resolution. Subsequently, the parties agreed on an ad-interim arrangement.
What were the issues?
1. Whether the Income Tax Appellate Tribunal (ITAT) has the power to allow adjustment of Equalization Levy (EL) against an outstanding income tax demand under the Income Tax Act, 1961, as prayed by the Petitioner for refund or adjustment of Rs. 13,82,67,125/- (Clause (c) of the reliefs sought). Assessee's Contention: The Petitioner argued that the EL paid should be credited against the outstanding demand or refunded. They relied on the principle that payments made under a statutory levy should be considered in settling tax liabilities. Revenue's Contention: The Revenue, through the Assistant Commissioner of Income Tax, did not explicitly argue on the legality of adjusting EL against tax demand in the initial stages. However, they suggested that the Petitioner should move a stay application before the ITAT and that the amount equivalent to the EL deposited may be considered for the purposes of stay of demand, without altering the characterization of the payment as EL until the appeal is decided.
Which sections of the Income-tax Act were involved?
Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 15.09.2026
The present writ petition has been preferred by the Petitioner seeking the following reliefs: “a) Writ in the nature of certiorari, mandamus or any order appropriate writ, order or direction for quashing of the Impugned Order dated 17.08.2026 for the AY 2023-24 and all consequential proceedings thereto. b) Writ in the nature of mandamus or any order appropriate This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/09/2026 at 11:34:09 writ, order or direction, directing the Respondents to give due credit to the EL amounting to Rs. 13,34,81, 786/-, constituting approximately 23.59% of the purported outstanding demand, and to keep recovery of the balance demand in abeyance pending disposal of the Petitioner's appeal before the Tribunal. c) Writ in the nature of mandamus or any order appropriate writ, order or direction, directing the Respondents to refund the EL amounting to Rs. 13,82,67,125 - (including interest on late payment amounting to Rs. 47,85,339/-) already paid by the Petitioner, along with applicable interest thereon, in accordance with law.”
On hearing Mr. Jolly, learned Senior Counsel, though the Court was of the view that the Income tax Appellate Tribunal ("ITAT") could consider the application for stay of demand, but it had its own doubt regarding power of the Ld. ITAT to allow adjustment of equalization levy against tax demand under the Income tax Act, 1961, as prayed in Clause (C) above. Thus, on 1st September 2026, the following order was passed :
“1. Mr. Sachit Jolly, learned Senior Counsel for the petitioner submitted that for the time being, he would not press his prayers (a) and (b), if a direction is issued to the respondents to either refund the equalization levy of about 13 crores, which the petitioner has paid, or the Assessing Officer is directed to adjust the equalization levy so paid, against the outstanding demand of the assessee for the Assessment Year 2023-24. As the same would roughly meet more than 20% of the total outstanding demand.
Mr. Indruj Singh Rai, learned Senior Standing Counsel for the respondents prays for and is granted three days' time to complete the instructions.” This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/09/2026 at 11:34:09 3. Mr Indruj Singh Rai, Senior Standing Counsel, has on instructions, suggested the following: (i) Since the appeal of the Petitioner is pending before the Ld. ITAT, the Petitioner should move an application for stay of outstanding income tax demand before the Ld. ITAT; (ii) He has further suggested that the amount equivalent to amount deposited as equalization i.e. Rs. 13, 34, 81,786/- may be ordered to be considered for the purposes of stay of demand. (iii) He however submitted that until the appeal is finally decided, the characterisation of the payment as equalization levy should not be altered. iv) This arrangement should be only an ad-interim measure in the facts of the present case.
Mr. Sachit Jolly, Ld. Senior Advocate, appearing on behalf of the Petitioner agreed with the fair proposition made by Mr. Rai.
Since both the parties are ad-idem, we propose to pass the following directions: (i) Petitioner may file an application for stay of the outstanding income tax demand before the Ld. ITAT within two weeks from today. (ii) The Ld. ITAT will consider the stay application on its own merits. (iii) If the Ld. ITAT finds any deposit of income tax is required for the purposes of the stay, it shall consider the amount equivalent to the amount of equalization levy already paid by the Petitioner, while determining the total amount of income tax payable while granting the stay, if any. In other words, if the Ld. ITAT finds it a fit case to grant stay, but requires some deposit of income tax, it shall consider that a substantial amount in the form of equalization levy has been paid by the Petitioner. In case the ITAT feels This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/09/2026 at 11:34:09 that amount more than the amount of equalisation levy is required to be deposited as a condition of grant of stay, then only the Ld. ITAT shall require the Petitioner to deposit any further amount. We make it clear that this is only an ad-interim arrangement and the original character of amount of Rs. 13, 34, 81,786/- paid as equalization levy will not be altered by virtue of this arrangement and such amount will continue to be treated as equalization levy despite it being considered for the limited purpose of quantification of deposit of tax while granting stay, if any, subject of course to final adjudication by the Tribunal. iv) The Respondent shall not take any measure to recover the outstanding demand till the Ld. ITAT decides the stay application. In case the Petitioner does not file stay application within two weeks from today, the Respondent shall be free to take appropriate steps in accordance with law.
With the aforesaid directions, the petition stands disposed of. DINESH MEHTA, J. RAJNEESH KUMAR GUPTA, J. SEPTEMBER 15, 2026/MR This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/09/2026 at 11:34:09
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