Court directs respondents to respond to petition, stay tax demand, release bank account, Income Tax Officer to appear.

The court issued a show-cause notice to the respondents, directing them to respond to the petition and stay the recovery of the disputed tax demand from the petitioner. The court also ordered the release of any attachment on the petitioner's bank account. The Income Tax Officer was instructed to appear before the court on the next hearing date, set within three weeks, with direct service permitted. The petitioner's counsel must provide proof of service to the respondents before the next hearing for compliance with the court's directives.

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Issues:
1. Stay of recovery of disputed tax demand during pendency of appeal.
2. Allegations of unjustified additions to income and mala fide intentions by Assessing Authority.

Analysis:
1. The petitioner argued that despite precedents like Maharana Shri Bhagwat Singh ji of Mewar v. ITAT and Maheshwari Agro Industries v. Union of India, the Assessing Authority did not fully stay the recovery of tax demand exceeding twice the admitted liability. Instead, the petitioner, a practicing income tax practitioner, was asked to pay 40% of the disputed demand in two installments. The petitioner contended that this was not in line with CBDT instructions and sought complete stay of recovery during the appeal process.

2. The petitioner further contended that the additions to income in the assessment order were baseless, done out of vengeance, and mala fide intentions by the Assessing Authority. The petitioner argued that the impugned assessment order and the conditions imposed for interim stay, requiring the deposit of 40% of the disputed demand, should be quashed. The court acknowledged the seriousness of these allegations and deemed the matter worthy of consideration.

3. The court issued a show-cause notice to the respondents, directing them to respond to the petition. The respondents were required to file a reply before the next hearing date. Meanwhile, the recovery of the disputed demand from the petitioner was stayed, and any attachment of the petitioner's bank account in this regard was ordered to be released immediately.

4. Additionally, the Income Tax Officer who passed the impugned order was directed to appear before the Court on the next hearing date. The court set a returnable date within three weeks and permitted direct service. The petitioner's counsel was instructed to provide proof of service to the respondents before the next hearing, ensuring compliance with the court's directives.

This detailed analysis highlights the issues raised in the judgment, the arguments presented by the petitioner, and the court's directives for further proceedings in the case.

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