How to avail stay of demand from A.O
How to avail stay of demand from A.O
This write up deals with the way in which stay of demand can be obtained. Stay of demand is basically provided when you appeal against the order of A.O to higher forum. Its a prerogative of A.O to grant stay of demand. Read below so as to ensure that A.O is duty bound to grant stay in your case.
Agreed….You have received income tax notice. You have also appealed to a higher forum against the order of Assessing Officer. But what about demand notice that you received along with assessment order of A.O. Will you be required to first pay tax and then go for appeal against the assessment order? Is there any remedy by which stay of demand can be availed?
Yes...There is a way out in which appeal can be filed and you wont be required to pay tax demand till disposal of appeal. Such power is given under Section 220(6) of Income Tax Act, 1961.
Section 220(6) allows A.O to grant stay of demand till appeal is disposed off by CIT(A).
How to avail stay of demand under Sec 220(6)?
The moment appeal is filed with jurisdictional CIT(A), then you are required to simultaneously make an application of stay of demand. The application of stay of demand will be made to A.O who passed the assessment order. It must be reiterated here again that stay will not be automatically granted just because you have filed an appeal to CIT(A). Making of application to A.O for stay of demand is must.
But, are there situations where A.O will definitely grant stay of demand? Yupe….There are some judicial precedents in favour of assessee. These precedents enumerate instances where stay will be granted if your case is fairly squared among those instances. For that read article “Cases in which A.O is bound to grant stay of demand”.
In case A.O does not grant stay then what?
Then you can make the said application to same CIT(A) with whom your appeal lies. In most of the cases CIT(A) will grant the stay of demand.
Now you might be thinking, what if CIT(A) also refuses??
Then the last resort is to file writ petition with H.C. The power to file writ petition is given by Article 226 of the Constitution of India.
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