Stay Granted for Tax Recovery, Petitioner to Appeal Within 3 Weeks

The Court granted a stay against tax recovery, allowing time for the Petitioner to appeal the tax demand. The Petitioner was directed to pursue an appeal under the Income Tax Act within three weeks. Withdrawal of the petition was contingent upon the Commissioner of Income Tax (Appeals)'s decision. The Court declined to grant a stay on recovery but allowed a brief period without coercive actions by the Revenue post an adverse decision on the stay application. The Revenue assured the Court of expeditious disposal of the appeal by the CIT(A) within six months, leading to the petition being disposed of as withdrawn.

---

---

Issues:
1. Challenge to tax demand and direction to pay without allowing time for appeal.
2. Availability of efficacious alternate remedy under the Income Tax Act.
3. Withdrawal of petition and prosecution of appeal before CIT(A).
4. Stay on recovery till appeal disposal by CIT(A).
5. Direction for expeditious disposal of appeal by CIT(A).

Issue 1: Challenge to Tax Demand and Direction to Pay Without Allowing Time for Appeal
The Petitioner challenged the action of the Assessing Officer in raising a tax demand of a significant amount and directing immediate payment without allowing time for appeal. The Court noted the unsustainable nature of the order and the violation of the Petitioner's right to approach the Appellate Authority before enforcement of the tax demand. Stay against tax recovery was granted considering the peculiar facts of the case and the need to assess the prima facie case of the Petitioner.

Issue 2: Availability of Efficacious Alternate Remedy under the Income Tax Act
The Petitioner invoked the extraordinary jurisdiction of the Court, arguing the absence of an efficacious alternate remedy under the Income Tax Act. The Respondents pointed out the availability of an appeal under section 246A to the Commissioner (Appeals), contrary to the Petitioner's claim. The Court directed the Petitioner to file an appeal within three weeks, allowing the Commissioner of Income Tax (Appeals) to determine the appeal's maintainability under section 246A. Withdrawal of the petition was contingent upon the Commissioner's decision, emphasizing that it would not restrict the Petitioner from challenging other orders under the Act.

Issue 3: Withdrawal of Petition and Prosecution of Appeal Before CIT(A)
The parties informed the Court that the appeal against the Assessing Officer's order was maintainable before the Commissioner of Income Tax (Appeals). The Petitioner sought to withdraw the petition and proceed with the appeal before the CIT(A), given the substantial demand involved. The Petitioner requested directions to prevent coercive proceedings by the Revenue until appeal disposal and for expeditious handling of the appeal by the CIT(A).

Issue 4: Stay on Recovery Till Appeal Disposal by CIT(A)
The Petitioner sought a stay on recovery until the CIT(A) disposed of the appeal, citing a precedent from the Delhi High Court. However, the Revenue did not commit to refraining from enforcement during the appeal process. The Court highlighted the Petitioner's ability to seek stay under Section 220(6) of the Act and decided not to grant a stay on recovery. It allowed the Petitioner to take necessary measures for obtaining a stay order and directed a brief period of no coercive actions by the Revenue post an adverse decision on the stay application.

Issue 5: Direction for Expeditious Disposal of Appeal by CIT(A)
The Court noted the Revenue's assurance that the CIT(A) would expedite the appeal's disposal, aiming for completion within six months. Consequently, the direction sought for expeditious disposal of the appeal did not require further intervention. The petition was disposed of as withdrawn, with the Court providing guidance on the appeal process and stay of recovery pending appeal resolution.

---