Tax Court Grants Relief, Quashes Rejection of Stay on Disputed Demand

The court granted relief to the petitioner in a case concerning disputed tax demands. It quashed the rejection of stay on the balance disputed demand by Respondent No.1, directing an expedited decision by the Commissioner of Income Tax (Appeals) and a stay on recovery until appeal disposal. The court also ruled against Respondent No.2's directive to pay 50% of the balance disputed demand, emphasizing compliance with CBDT guidelines. It invalidated impugned orders and provided ad-interim relief, cost coverage, and any other suitable relief. The court stayed the impugned orders' effect during the petition hearing to safeguard the petitioner's interests.

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Issues:
1. Stay of balance disputed demand rejection by Respondent No.1
2. Direction to pay 50% of balance disputed demand by Respondent No.2
3. Validity of impugned orders by Respondent No.1 and No.2
4. Expedite proceedings before CIT(A)-26
5. Stay of impugned orders during petition hearing
6. Ad-interim relief
7. Cost of the petition
8. Any other relief deemed fit under law and equity

Stay of Balance Disputed Demand Rejection by Respondent No.1:
The petitioner filed a petition under Article 226 seeking a writ of Mandamus to quash the impugned order dated 05.12.2019 by Respondent No.1 rejecting the stay of balance disputed demand. The petitioner had deposited 20% of the disputed tax demand in compliance with CBDT's memorandum. Despite this, the Assessing Officer insisted on payment of 50% of the disputed tax amount. The court ruled that it was unjustified for the revenue authority to seal the petitioner's bank accounts, causing hindrances in his daily activities. The court directed that the appeal pending before the Commissioner of Income Tax (Appeals) be decided expeditiously within three months and ordered a stay on the recovery of the balance amount until the appeal's disposal. The court also directed the resealing of the petitioner's bank accounts.

Direction to Pay 50% of Balance Disputed Demand by Respondent No.2:
The petitioner also sought relief against the impugned orders dated 14.06.2019 and 22.11.2019 by Respondent No.2, directing the petitioner to pay 50% of the balance disputed demand. The court considered the nature of the assessment proceedings and the significant amounts involved under Sections 68 and 69 of the Income Tax Act. Despite the revised CBDT memorandum requiring 20% payment for stay of demand, the Assessing Officer demanded more than 20% from the petitioner. The court extended the same treatment as in the case of another individual, directing a stay on the recovery of the balance amount until the appeal's disposal.

Validity of Impugned Orders by Respondent No.1 and No.2:
The court found that the impugned orders passed by Respondent No.1 and No.2 were invalid in light of the petitioner's compliance with the CBDT memorandum by depositing 20% of the disputed tax demand. The court emphasized the need for a fair and just treatment, especially when the petitioner's appeal was pending before the first appellate authority.

Expedite Proceedings Before CIT(A)-26:
The court ordered the Commissioner of Income Tax (Appeals) Mumbai-26 to expedite the proceedings of the appeal filed by the petitioner, ensuring a decision within three months from the date of the court's order. This direction aimed to provide timely resolution to the petitioner's case.

Stay of Impugned Orders During Petition Hearing:
During the pendency of the petition, the court granted a stay on the effect, implementation, and operation of the impugned orders dated 05.12.2019, 14.06.2019, and 22.11.2019. This interim relief was essential to protect the petitioner's interests until the final disposal of the petition.

Ad-Interim Relief, Cost of the Petition, and Other Relief:
The court granted ad-interim relief as requested by the petitioner, directing the necessary actions to address the issues raised in the petition. Additionally, the court awarded the cost of the petition to the petitioner and granted any other relief deemed fit under the law and equity in the circumstances and facts of the case.

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