Refer Office Memorandum [F.No. 404/72/93-ITCC] dated 29-2-2016 issued by CBDT whereby the AO is to grant stay recovery of demand on on deposit of 15% of the demand ( Which has been increased to 20% by Office Memorandum F.No.404/72/93-lTCC dated 31.7.2017) unless:
A. The AO is of the view that payment of a sum higher than 15% is warranted eg. when the addition on same issue is confirmed by the appellate authorities for earlier years or the decision of the Suprem e Court or jurisdictional High Court is in favour of the Revenue or addition is based on credible evidence collected during search or survey operation. or
B. The AO is of the view that payment of a sum lower than 15% is warranted eg. when addition on the same issue is deleted by appellate authorities for earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, the AO shall refer the matter to the administrative PCIT/CIT, who after considering all relevant facts shall decide the application.
C. If the assessee is aggrieved on the decision of the AO to stay the demand but upon payment of 15% of the demand, he may approach the jurisdictional administrative Pr. CIT/CIT for a review of the decision of the Pr.CIT/CIT.
D. The AO shall dispose of the stay petition within a period of two weeks of filing the petition. If the reference or the review application is made to PCIT/CIT as above, the same shall also be disposed of within two weeks.
This O.M makes it amply clear that even if the jurisdictional High Court has passed an order in favour of an assessee on the same issue for an earlier year, there is no obligation on the AO to grant an unconditional stay of demand, and he may refer the matter to the Pr. CIT/CIT and he in turn may grant a partial stay of demand on the lower side being less than 15% of the demand. The words used are `sum lower than 15% is warranted` making it amply clear that there is no need to grant an unconditional stay of demand.
So, you may submit an application for stay of demand and release of bank account attached on deposit of 20% of demand if you have prefrred an appeal before the CIT(A), you may use the following format that may modified as per your requirement:
Sub:- Application in terms of section 220(6) of the IT Act,1961 for Stay of Regular Income Tax Demand raised in case of 1961 in case of Shri XXXXX XXXX PAN XXXXXXXXX for the Assessment Year and for releasing our bank account attched.
Ref.:- Your Assessment Order for assessment year XXXXXX passed under section 148/143(3).... of the Income Tax Act, 1961, dated XXXXXX
With reference to above, it is very humbly submitted that:
1. The assessment in above case was completed on XXXXXXXX u/s 148/143(3) by your good office raising a total demand of Rs. XXXXXXX/-. .
2. The assessee has filed an online appeal in prescribed form before the Commissioner of Appeals vide e-filing acknowledgement number vide acknowledgement no. _______________on _______ before the Commissioner (Appeals- )______ against the same as per law within the time allowed and a copy of the appeal as furnished online is enclosed hereto for your records.
3. The issue in the above appeal are in relation to partly rejection of exemption/deduction claimed by the assessee u/s 54F and charging of interest u/s 234B which is not justified in the facts and law of the case, hence, the assessee is expecting full relief in the appeal based upon the grounds taken in the appeal.
4. The assessee has deposited a sum of Rs. /- against above demand vide CIN on (Copy enclosed). Thus in terms of recent revised guidelines of CBDT, the assessee has complied with general requirement of depositing 20% of demand for seeking stay of the remaining demand till disposal of the First appeal.
It is therefore most respectfully prayed that please be kind enough to grant stay of the remaining demand in above case till the disposal of our appeal and oblige You are also very humbly requested to release our Bank Account attached by you vide your Order/Letter No (Copy enclosed) and oblige.
(Nam of Assessee)
Acknowledgement of Form No. 35
1. Copy of Form No.35
2. Copy of Challan of Rs. /-
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