Section 265 of ITA, 1961 : Section 265: Tax To Be Paid Notwithstanding Reference, Etc

Explanation using Example

Imagine a situation where a business owner, Mr. Sharma, disagrees with the income tax assessment made by the tax authorities and believes that he has been charged more tax than he owes. He decides to challenge the assessment by making a reference to the High Court for a legal opinion on the matter. While the case is being considered by the High Court, and even if Mr. Sharma plans to appeal to the Supreme Court should the High Court's decision not be in his favor, he is still required by law to pay the tax as per the original assessment. Section 265 of The Income-tax Act, 1961, mandates that the tax should be paid notwithstanding the ongoing legal proceedings. So, Mr. Sharma must pay the assessed tax amount even though the final decision from the higher courts is pending.