STAY FOR DEMAND
shammi kumar
(Querist) 19 February 2010
This query is : Resolved
I HV FILED APPEAL BUT STIL APPEAL IS PENDING BUT DEPARTMENT SENT NOTICE FOR DEMAND U/S 221(1)EITHER I HAVE TO TAKE STAY FOR THIS DEMAND OR APPEAL IS SUFFICENT PLS GUIDE
Vineet
(Expert) 19 February 2010
You have to apply to the AO to not to treat you as assessee in default in respect of the demand (commonly known as stay of demand). The AO may grant you stay or instalments depending upon the facts and precedences in your case.
Mere filing of appeal does not suo moto grant you stay of demand and department may initiate all actions for recovery.
B K Raghavendra Rao
(Expert) 19 February 2010
Filing an appeal by itself does not act as a stay order. You need to obtain specific stay order upon application.
A V Vishal
(Expert) 20 February 2010
INCOME-TAX PROVISIONS REGARDING STAY
OF DEMAND
Section 220(6) of the Act gives discretionary power to the AO to stay the demand and reads as under:
Where an assessee has presented an appeal under section 246 [or section 246A], the Assessing Officer may, in his discretion and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of.
Thus a petition lies with the AO to keep the demand stayed during the pendency of the appeal of the assessee. The discretion given is to be exercised judiciously and not arbitrarily. A petition can be filed for this purpose within 30 days of the receipt of demand notice, setting out the grounds for staying the demand. In M.L.M. Mahalingam Chettiar v. Third ITO (1967) 66 ITR 287 (Mad.), it was held that the discretion vested in the ITO under section 220(6) is not merely a naked and arbitrary power but a power coupled with a responsibility and the concerned officer should take all the circumstances into account and all the considerations that could be urged or are argued by the assessee as to why he should not be treated as not being in default, and then make such order as it appropriate to the facts of the case. In other words, a request for the exercise of the power under section 220(6) cannot be merely summarily rejected on the basis that power is there with the officer but that he is not bound to exercise it.
Kumar Thadhani
(Expert) 22 February 2010
The AO has no right to say in the matter of stay of demand it is the petitioner has to file with the commissioner of Appeals of your jurisdiction is empowered with he stay of demand by filing separate application for demand only after iling of appeal.But it is discretion to stay demand or not only after taking evidences after giving sufficient oportunity of being heard looking to the facts and circumstances of petitioner's case.
soumitra basu
(Expert) 09 March 2010
The stay petition should be filed before the CIT (A) as well as before the concerned AO. For stay of demand there is specific circular of CBDT which is available in Prithisaria Income Tax Act.
