Application for Stay of Tax Demand — Template
Ready-to-use draft reply template for stay of outstanding tax demand pending appeal under the Income Tax Act. Includes format, legal references, and compliance notes. Illustrative only — customize based on your specific case facts and professional advice.
Response Deadline: As specified in the notice (typically 15-30 days)
Filing: E-filing portal (incometax.gov.in) → Pending Actions → Response to Notices
When Do You Receive This Notice?
stay of outstanding tax demand pending appeal is issued by the Assessing Officer / CPC when Section 220(6) / CBDT Instruction provisions are triggered. You must respond within the time specified in the notice — failure to respond can result in best judgment assessment, penalty, and prosecution.
Draft Reply
To,
The Assessing Officer / CIT(A) / ITAT
[Jurisdiction]
Subject: Application for Stay of Demand under Section 220(6) — PAN: [PAN] — AY [Year] — Outstanding Demand Rs. [Amount]
Respected Sir/Madam,
The undersigned has filed appeal against the assessment order dated [Date] for AY [Year]. The appeal is pending before [CIT(A)/ITAT].
Pre-deposit paid: Rs. [Amount] (20% of disputed demand) vide Challan No. [Number] dated [Date].
Grounds for stay:
1. The appeal has strong merits — [brief summary of strong grounds].
2. Payment of full demand will cause genuine hardship — [financial position details].
3. CBDT Instruction No. 1914 dated 21.03.1996 and Office Memorandum F.No.404/72/93-ITCC dated 29.02.2016 provide that demand should be stayed if 20% is paid and appeal is filed.
I/we request stay of the balance demand of Rs. [Amount] (i.e., Rs. [Total] minus Rs. [20% paid]) till disposal of the appeal.
[Name] | [PAN] | Date: [Date]
Key Compliance Notes
Key: (a) Pay 20% of disputed demand BEFORE applying for stay. (b) CBDT instruction: if 20% is paid and appeal is filed, AO SHOULD grant stay (not must — but courts have held AO must consider). (c) If AO refuses stay: apply to CIT(A)/PCIT. (d) If all refuse: apply to ITAT under Section 254(2A). (e) High Court writ petition as last resort. (f) AO cannot attach property or bank account while stay application is pending.
Documents to Attach
| # | Document | Purpose |
|---|---|---|
| 1 | Copy of the notice received | Reference |
| 2 | Copy of ITR filed for the relevant AY | Proof of filing |
| 3 | Computation of income with supporting schedules | Substantiation |
| 4 | All documentary evidence supporting your position | Evidence |
| 5 | Bank statements, Form 26AS, AIS for the relevant period | Verification |