Mrs. Kusam Swetha Priya vs. The Jurisdictional Assessing Officer

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WP/20785/2026HC TelanganaHBHC01040946202603 July 2026Author: P.SAM KOSHY,SUDDALA CHALAPATHI RAO6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition. The Court found that the petitioner had filed a statutory appeal under Section 246A of the Income Tax Act, 1961, along with a stay application under Section 220(6). The stay application was rejected by the Assessing Officer because the petitioner had not complied with the mandatory condition of paying 20% of the outstanding demand, as stipulated by CBDT Instruction No. 1914 dated 02.12.1993 and subsequent Office Memorandums. The Court agreed with the Revenue's submission that the petitioner had not demonstrated any exceptional circumstances or financial hardship to warrant an exemption from this condition. Consequently, the Assessing Officer's rejection of the stay application was deemed correct and did not warrant interference by the High Court. The petitioner was granted liberty to deposit 20% of the demanded amount within six weeks from the receipt of the order, after which her appeal would be dealt with as per the prescribed procedure. No order as to costs was made.

What were the facts?

The petitioner, Mrs. Kusam Swetha Priya, filed a writ petition challenging an order dated May 19, 2026, passed by the Jurisdictional Assessing Officer (1st Respondent). This order rejected her stay application concerning a demand of Rs. 2,96,09,891/- for Assessment Year 2024-25. The petitioner had filed a statutory appeal against the assessment order dated February 28, 2026, and simultaneously sought a stay on the recovery of the demand. The Assessing Officer rejected the stay application on the grounds that the petitioner had not complied with the mandatory condition of depositing 20% of the outstanding demand as per CBDT instructions. The petitioner argued that the order was illegal, arbitrary, and violated principles of natural justice and constitutional provisions.

What were the issues?

1. Whether the Assessing Officer was justified in rejecting the petitioner's stay application for Assessment Year 2024-25 on the ground of non-compliance with the mandatory condition of depositing 20% of the outstanding demand, as per CBDT instructions (specifically Instruction No. 1914 dated 02.12.1993 and subsequent Office Memorandums)? (Question of law and fact, concerning Section 220(6) and CBDT guidelines). Assessee's Contentions: - The order passed by the 1st Respondent is bad in law and against CBDT guidelines. - The demand for deposit of the total outstanding amount is illegal, arbitrary, and against the Principles of Natural Justice. - The order violates Article 14 of the Constitution and contrary to relevant CBDT instructions and High Court judgments. Revenue's Contentions: - The petitioner failed to comply with the condition of making payment of 20% of the demanded amount as per CBDT instructions while filing the appeal. - The petitioner has not shown any exceptional circumstances or financial hardship to claim exemption from complying with the said condition. - Therefore, the 1st respondent rightly rejected the stay application, and the writ petition warrants dismissal.

Which sections of the Income-tax Act were involved?

Section 220(6),Section 246A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[ 348e ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE THIRD DAY OF JULY TWO THOUSAND AND TWENry SIX PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO WRIT PETITION NO: 20785 OF 2o26 Between: Mrs. Kusam Swetha Priya, W/o Sri Naresh Kumar Reddy Chappidi Aged about 41 years, Occ. Now Unemployed Residing at plot No. 34, Vaishnaoi Enclave, Petbasheerbabad, Quthubullapur, K.V. Rangareddy-500 067 Hyderabad, Telangana. PAN. AQHPP8990lVl. Now presenfly residing at Villa 19, Fontainebleau Villas, Rue La Salette, Grandy Bay, Mauritius - 30551. ...PETITIONER AND 1 The Jurisdictional Assessing Officer, ITO-2, lnternational Taxation, Aayakar Bhavan, Basheerbagh, Hyderabad, 500 004. The National Faceless Appeal Centre, (C|T-A), Ministry of Finance, Room No. 4O1 ,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-.1 .10 003. The Central Board of Direct Taxes, Through its Chairman, Department of Revenue, Ministry of Finance, North Block, New Delhi - 110 001. The Principat Chief Commissioner of lncome Tax, lnternational Taxation, New Delhi, lnd ia. The National Faceless Assessment Centre,2nc Floor, E Ramp, Jawaharlal Nehru Stadium, New Delhi - 1 10 003. Union of lndia, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi - 1 '10 001 ...RESPONDENTS Petition under Adricle 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased lo issue a writ, order or direction, more particularly one in the nature of Writ of l\rlandamus by declaring the order passed by the 1st Respondent for the A.y. 2024- 25, vide Document ldentification Number DIN- ITBA/RCV/r/107t2026' 2711089069727 dt. 19.05.2026, which is bad in law and against CBDT guidetines, 2 3 4 tt by directing the petrtioner herein to deposit total outstanding demand an amount of Rs.2,96,09,891/- so as to avoid the petitioner being treated ,as not being default of the above said demand as illegal arbitrary and against tho Principles of Natural Justice and in violation of Article 14 and contrary to the rele!ant instructions issued by CBDT and contrary to the guidelines issued by the Judgmernts of the Honble High courts and consequently set aside the order dt. 19-05.2026 l.A. NO: 1 OF 2026 Petition under Section 151 CPC praying that in the c rcumstances stated in the affidavit filed in support of the writ petition, the High Court may be pleased to grant an interim stay on all further collection and coercive recovery proceedings against the Petitioner, including but not limited to bank ar;count attachments or penalty proceedings, originating from the disputed assessfirent for A.Y. 2024-25. until the final disposal of the present Writ Petition l.A. NO: 2 OF 2026 Petition under Section 151 CPC praying that in the c rcumstances stated in the affidavit filed in support of the writ petition, the High Coirrt may be pleased to direct the 2no Respondent, while adjudicating the Petitionefs statutory appeal, to independently examine and consider all the documentary ovidence, explanations and submissions placed on record by the Petitioner, affo rd due opportunity of hearing Pelition under Section 151 CPC praying that in the c rcumstances stated in the affidavit filed in support of the writ petition, the High Co rrt may be pleased to direct the 2"d Respondent to expeditiously dispose of tho Petitioner's statutory appeal, which is presently pending adjudication, preferably w thin a period of six (6) months from the date of receipt of the order of this Hon'ble Court, and till there protect the Petitioner for recovery of the demand as olherwis,e the Petitioner would be subjected to irreparable loss, undue hardship and prejud ce Counsel for the Petitioner: SRl. VENKATRAM REDDY MANITUR Counsel for the Respondent Nos. 1to5: SRl. VIJHAY K PUNNA (sENtoR STANDtNG COUNSEL FOR TNCOME TAX) Counsel for the Respondent No.6: SRI N. BHUJANGA R,AO, DY. SOLICITOR GENERAL OF INDIA

The Court made the following: ORDER l.A. NO: 3 OF 2026

IN THE HIGH COURT F'OR THE STATE OF TELANGANA AT HYDERABAD HONOURABLE SRI JUSTICE P.SA]\{ KOSHY AND HON'BLE SRI JUSTICE SUDDALA CHALAPATHI RAO WRIT PETITION No.20785 of2026 Date:03.07.2026 Between: Mrs.Kusam Swetha Priya .Petitioner And The Jurisdictional Assessing Ofhcer, Hyderabad and others. . . . Respondents ORDER: (per Hon'ble Sri hstice Suddala Chatapathi Rao) Heard Mr.M.Venkatram Reddy, learned counsel for the petitioner and Mr.Vijhay K.Punna, leamed Senior Standing Counsel for the Income Tax Department and perused the record.

2.

The present Writ Petition is filed challenging the order passed by the 1't respondent rejecting stay for the assessment year 2024-2025 vide Document Identification Number (DIN)-ITBA/RCVlFll1'l/2026- 27 / 1089069727(1), dated 19.05.2026. 3. Learned Senior Standing Counsel for the Income Tax Department, appearing for the respondent Nos.l to 5, submits that the petitioner has failed to comply the condition of making payment of 20Yo of the demanded amount as per CBDT instructions, while filing the appeal. She has not shown any exceptional circumstances or financial hardship to claim any exemption from complying the said condition Therefore, the 1st respondent has rightly rejected the stay application of the petitioner vide impugned orc er, which does not warrant interference by this Court. Hence, he prays .'o dismiss the writ petition.

4.

The petitioner filed statutory appeal under Section 246A of the Income Tax Act, 1961 (for short "the Act") on 21.03 -2026 against the assessment order dated 28.02.2026 passed by the 5'h respondent. ''\long with the said appeal, the petitioner atso filed a stay application under Section 220(6) seeking to say on the recovery of the total outstanding demand of Rs 2,96,09,891/- pending disposal of the appeal. But, the said stay application was rejected vide the impugned order on the ground that the petitioner has not complied with the condition of paying 20o/o of the outstanding deman'

1.

As per CBDT instruction No.1914 dated 02.12.1993 read with subsequent Office Memorandums issued by the Central Board of Direct Te xes, rvhile filing the statutory appeal, the assessee has to mandatorily pay 20"/o of the outstanding demand for consideration of stay of demand, unless -he case falls under exceptional circumstances warranting deviation from the said guidelines. However, in the present case, as rightly stated by learned Standing Counsel for the Income Tax Department, the petitioner has not shown any exceptional circumstances to seek exemption from complying the aforesaid condition Therefore, the l" respondent has rightly rejected the stal application hled by the petitioner under the impugned order, which does not warrant interference by this Coutt.

5.

In view of the above, we find no merits in the writ petition and is accordingly, dismissed. However, the petitioner is at liberty to deposit 20vo of the demanded amount within a period of six weeks from the receipt of a copy of this order and thereafter, the appeal shall be dealt with in accordance with the procedure prescribed under the Act. There shall be no order as to costs. Pending miscellaneous applications, if any, shall stand closed' L.VIJAYA LAXMI ASSISTANT REGISTRAR //// 6 SECTION OFFICER To, loPUCl

4.

Two CD CoPies BM TKS

1.

One CC to SRl. VENKATRAIvI REDDY MANTUR-Advocate [OPUC]

2.

One CC to SRI VIJHAV K ;LiNNI (SENIOR STANDING COUNSEL FOR INCOI\i\E TAX) IoPUC]

3.

One CC to SRl. N. BHUJANGA RAO' DY' SOLICITOR GENERAL OF INDIA d

HIGH COURT DATED: 0310712026 ORDER WP.No.20785 of 2026 .,-/ - '_:::- cO I Allrj 'i!16 D!:-. .'--'' t-"'-' --,]i -/' DTSMISSING THE WRIT PETITION WITHOUT COSTS d)) ctt ( or)

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