Court directs detailed submission to Commissioner for Income Tax, orders status quo on recovery pending decision.

The court set aside the assessing officer's mechanical rejection of the petitioner's stay petition, directing a detailed petition to be submitted to the Principal Commissioner of Income Tax. The Principal Commissioner was instructed to consider the prima facie case, financial stringency, and balance of convenience, and make a decision within two weeks. The court ordered maintenance of the status quo on recovery pending the decision on the stay petitions, ultimately disposing of the writ petitions without costs.

---

---

Issues Involved:
1. Validity of the assessment orders for the years 2010-11 to 2013-14.
2. Legitimacy of the petitioner's request for a stay on the recovery of disputed tax demands.
3. Compliance with Central Board of Direct Taxes (CBDT) circulars and guidelines regarding the stay of tax demands.
4. Proper exercise of discretion by the assessing officer in rejecting the stay petition.

Issue-wise Detailed Analysis:

1. Validity of the assessment orders for the years 2010-11 to 2013-14:
The petitioner, an assessee, challenged the assessment orders dated 29.12.2017 for the assessment years 2010-11 to 2013-14 before the Commissioner of Income Tax (Appeals) [CIT(A)] on 30.01.2018. The appeals were partially heard and pending disposal. The petitioner claimed that the assessment orders were "high pitched and biased to the interest of the revenue," as the additions made were sixty times the returned income.

2. Legitimacy of the petitioner's request for a stay on the recovery of disputed tax demands:
The petitioner filed stay petitions on 04.10.2018, seeking to stay the recovery of the disputed demands, citing that the assessment was substantially higher than the returned income. The petitioner relied on CBDT Instruction No. 95 of 1969, which suggests that the collection of tax should be held in abeyance if the assessed income is significantly higher than the returned income.

3. Compliance with Central Board of Direct Taxes (CBDT) circulars and guidelines regarding the stay of tax demands:
The petitioner referred to CBDT circulars and instructions, including Instruction No. 1914 and subsequent modifications, which outline the guidelines for staying tax demands. These guidelines emphasize the need for a prima facie case, financial stringency, and balance of convenience. The assessing officer is required to consider these factors and pass a speaking order.

4. Proper exercise of discretion by the assessing officer in rejecting the stay petition:
The assessing officer rejected the stay petition with a non-speaking order, stating, "Petition is rejected. AO to collect 20% as per Board's Circular ASAP." The court observed that the rejection was mechanical and lacked application of mind. The assessing officer failed to consider the conditions precedent for granting a stay and did not pass a reasoned order.

Conclusion:
The court set aside the impugned order dated 11.10.2018, deeming it mechanical and passed without proper consideration. The court directed the petitioner to appear before the Principal Commissioner of Income Tax on 05.03.2019 with a detailed stay petition covering the three aspects: prima facie case, financial stringency, and balance of convenience. The Principal Commissioner was instructed to pass appropriate orders within two weeks from the personal hearing. Until the disposal of the stay petitions, the status quo regarding recovery was to be maintained. Consequently, the writ petitions were disposed of, and miscellaneous petitions were closed with no costs.

---