Rajasekaran v. CCIT · Madras High Court: a non-speaking 20% pre-deposit demand cannot stand

Can the AO demand 20% of the disputed demand without recording reasons?

No. A non-speaking order requiring 20% remittance in seven days was set aside; the AO must pass a fresh, reasoned order.

Facts in brief

• Pending appeal, the AO required the assessee to remit 20% of the demand within seven days, staying the remaining 80%.
• The order recorded no reasons for the percentage or the timeline.

Issue before the bench

Whether Office Memorandum 1914 read with the 2017 Instruction authorises mechanical stay orders.

Held

The High Court set aside the order for absence of reasons and directed a fresh, reasoned order.

Practitioner takeaway