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Stay of income tax demand

MANOJ (ASSISTANT) (34 Points)

24 August 2013

HOW WE GET STAY OF INCOME TAX DEMAND RAISED BY ITO AND WE HAVE ALREADY FILLED APPEAL AGAINEST THIS?

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Kiran (CA) (44 Points)
Replied 25 August 2013

Section 220(6) of the Act empowers the Assessing Officer ('AO') to use his discretion and grant the assessee a stay of demand (keep the recovery proceedings in abeyance) in cases where an appeal has been preferred by the assessee before the Commissioner of Income-tax (Appeals) [‘CIT(A)’] under section 246A of the Act. Accordingly, where an appeal has been preferred by the taxpayer, he can be granted a stay of demand by the AO till the disposal of appeal by the CIT(A) on an application made by the Assessee.

However, when no appeal is preferred by the assessee against the assessment order, there are provisions in the Act which empower the AO, upon an application made by the assessee, to extend the time for payment or allow payment by way of installments subject to certain conditions as the AO may deem fit [Section 220(3)].

Request you to note that In either case, taxpayer will be liable to interest u/s 220(2) from the day immediately following the expiry of the time period stipulated in the demand notice up to date of actual payment.