Court grants stay on demand notice, directs timely appeal decision.

The High Court directed the appellate authority to decide the appeal within four months and granted a stay on the demand notice until the appeal's resolution, disposing of the petition without expressing any opinion on the merit.

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Issues:
1. Petitioner seeks quashing of orders rejecting stay of demand.
2. Assessment order passed by Assessing Officer under Income Tax Act.
3. Application for stay of demand rejected by respondent No.1 and No.2.
4. Appeal filed before Commissioner of Income Tax (Appeals).
5. Interpretation of Section 194B and Section 40(a)(ia) of the Act.
6. Guidelines for revenue authorities in dealing with stay applications.
7. Arguments regarding the stay application by both parties.
8. Payment made by petitioner towards outstanding dues.
9. Decision of the High Court.

Analysis:
1. The petitioner filed a petition under Article 226 seeking to quash orders dated 12th February, 2020, and 21st February, 2020, passed by respondent No.1 and No.2 rejecting the application for stay of demand until the appeal filed by the petitioner before the Commissioner of Income Tax (Appeals) is disposed of. The petitioner is a company engaged in online and mobile games, and the Assessing Officer applied Section 40(a)(ia) of the Income Tax Act, adding a significant amount to the total income of the assessee, leading to a demand notice of a substantial sum.

2. The petitioner appealed the assessment order before the Commissioner of Income Tax (Appeals) and simultaneously filed an application for stay of demand under Section 220(6) of the Act. Respondent No.1 rejected the application, directing the petitioner to pay 20% of the total demand, and respondent No.2 later directed the petitioner to pay 5% of the outstanding demand. The petitioner then filed a writ petition challenging these decisions.

3. The petitioner's senior counsel argued that the nature of the petitioner's business exempts it from the application of Section 40(a)(ia) and referenced guidelines laid down by the court in a previous case for revenue authorities dealing with stay applications. The counsel highlighted that the Assessing Officer's change in approach without material changes in facts or law from previous years was not considered by the respondents, indicating an oversight in their decision-making process.

4. On the other hand, the Revenue's standing counsel contended that respondent No.2 had fairly considered the stay application by directing a minimal payment of 5% of the outstanding demand. The counsel pointed out that the petitioner could seek a stay before the appellate authority, suggesting that court interference was unnecessary.

5. The High Court, without expressing any opinion on the merit, directed the first appellate authority to hear and decide the appeal within four months. The court ordered a stay of the demand notice until the appellate authority's decision, and the petition was disposed of accordingly.

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