Stay of Demand Application — Draft

APPLICATION FOR STAY OF RECOVERY OF DEMAND
(Under section 220(6) of the Income-tax Act, 1961 read with CBDT
Instruction/O.M. dated 31.07.2017 as amended)

Name of Assessee   : [Name of Assessee]
PAN                : [ABCDE1234F]
Assessment Year    : [A.Y. 20__-__]
Assessment order   : u/s [143(3)/147] dated [DD/MM/YYYY], DIN [___]
Demand u/s 156     : ₹[amount] due by [DD/MM/YYYY]
Appeal status      : Appeal in Form 35 filed on [DD/MM/YYYY] before
                     CIT(A)/NFAC, Appeal No. [___] — pending
Date of application: [DD/MM/YYYY]

To,
The Assessing Officer, [Ward/Circle __] /
The Principal Commissioner of Income-tax, [___],
Income-tax Department.

Subject: Application for stay of recovery of demand of ₹[amount] for A.Y.
         [20__-__] pending disposal of first appeal — treating the
         assessee as not being in default u/s 220(6) — reg.

Respected Sir/Madam,

1.  Pursuant to the assessment order dated [DD/MM/YYYY], a demand of
    ₹[amount] has been raised under section 156 for A.Y. [20__-__]. The
    said demand arises from the following addition(s)/disallowance(s):
    [briefly list — e.g. "addition of ₹[amount] u/s 68", "disallowance of
    ₹[amount] u/s 40(a)(ia)"].

2.  The assessee, being aggrieved, has filed an appeal in Form 35 before
    the CIT(A)/NFAC on [DD/MM/YYYY] (Appeal No. [___]), which is pending
    adjudication. The additions are contested on strong grounds, and the
    assessee has a good prima facie case as detailed in the grounds of
    appeal (copy enclosed).

3.  In terms of CBDT O.M. dated 31.07.2017 (modifying Instruction No.
    1914), on payment of 20% of the disputed demand recovery of the balance
    is to be stayed till disposal of the first appeal. The assessee has
    already paid ₹[amount], being 20% of the disputed demand, vide challan
    CIN [___] dated [DD/MM/YYYY] (proof enclosed).

4.  The three well-settled tests for grant of stay are satisfied:
      (i)  Prima facie case — the additions are contrary to the evidence on
           record and binding precedents [cite, if any];
      (ii) Balance of convenience — lies in favour of the assessee, the
           demand being largely disputed and sub judice;
     (iii) Irreparable hardship — coercive recovery of ₹[amount] would
           [cripple the running business / cause severe financial hardship
           / render the appeal infructuous], as evidenced by the enclosed
           financials/cash-flow position.

5.  The assessee undertakes to co-operate in the early disposal of the
    appeal and not to alienate assets so as to defeat recovery.

PRAYER
It is respectfully prayed that the assessee be treated as "not being in
default" under section 220(6) and recovery of the balance demand of
₹[amount] be stayed until the disposal of the first appeal by the CIT(A),
and that any coercive/recovery measures (including attachment of bank
accounts under section 226) be kept in abeyance.

List of enclosures:
  1. Copy of assessment order and notice of demand u/s 156.
  2. Copy of Form 35 appeal and grounds of appeal.
  3. Challan evidencing payment of 20% of the disputed demand.
  4. Latest financial statements / cash-flow statement.

Thanking you,

Yours faithfully,

For [Name of Assessee]

______________________________
[Signature — Assessee / Authorised Representative]
Name : [Name]     PAN: [ABCDE1234F]
Place: [City]     Date: [DD/MM/YYYY]