Tax court quashes payment order, stresses discretion, sets appeal timeline.

The court quashed the orders directing payment of the disputed amount and pre-deposit, emphasizing the need for proper exercise of discretion by tax authorities. It directed the expeditious disposal of the appeal within six months, with the petitioner's cooperation, and remitted the matter for fresh decision in accordance with legal principles. The writ petition was allowed, and pending applications were disposed of.

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Issues Involved:
1. Quashing/setting aside the order directing payment of 20% of the disputed amount.
2. Direction to not enforce and realize the outstanding demand during the pendency of the appeal.
3. Expeditious disposal of the appeal filed by the petitioner.
4. Quashing/setting aside the order directing payment of pre-deposit and monthly payments.

Issue-wise Summary:

1. Quashing/Setting Aside the Order Directing Payment of 20% of the Disputed Amount:
The petitioner sought to quash the order dated 31.01.2023 by Respondent No. 3, which directed the petitioner to pay 20% of the disputed amount for the Assessment Year 2020-21 based on the CBDT Office Memorandum dated 31.07.2017. The court noted that the Assessing Officer had not exercised discretion under Section 220(6) of the Income Tax Act and had mechanically relied on the CBDT Office Memorandum, which was contrary to the provisions of the Act and judicial precedents.

2. Direction to Not Enforce and Realize the Outstanding Demand During the Pendency of the Appeal:
The petitioner requested a writ of mandamus directing Respondent No. 2 not to enforce and realize the outstanding demand during the pendency of the appeal. The court observed that the Assessing Officer should exercise discretion judiciously and not act merely as a tax-gatherer. The court emphasized that the exercise of discretion should be based on relevant considerations like prima facie case, balance of convenience, and irreparable injury.

3. Expeditious Disposal of the Appeal Filed by the Petitioner:
The petitioner sought a direction for the expeditious disposal of the appeal filed before Respondent No. 4. The court directed that the appeal should be decided within six months from the date of the order, subject to the petitioner's cooperation in the appellate proceedings.

4. Quashing/Setting Aside the Order Directing Payment of Pre-deposit and Monthly Payments:
The petitioner challenged the order dated 24.02.2023 by Respondent No. 1, which directed the payment of Rs. 5 crores as pre-deposit and Rs. 10 lakhs per month until the disposal of the appeal. The court found that the Reviewing Authority had not applied its mind independently and had not considered the prima facie case, balance of convenience, and undue hardship. The court quashed the order and remitted the matter back to Respondent No. 3 for a fresh decision.

Conclusion:
The court quashed the orders dated 31.01.2023 and 24.02.2023, directing Respondent No. 3 to pass a fresh order on the stay application in accordance with the principles laid down. The court also directed the expeditious disposal of the appeal within six months, with the petitioner's full cooperation. The writ petition was allowed, and pending interlocutory applications were disposed of.

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