Stay of demand
This query is : Resolved
03 June 2009
Hello friends
I am totally confused over law of stay of demand.Please help me in my following queries:-
1)If an assessee has taken stay of demand and files his appeal sai in CIT(A) and further loses the appeal then at what time period he has to pay demand.within 30 days of fresh demand notice or next day on which appeal is decided and in this case if he doesnt pay then from when he will be deemed as assessee in default?Will he be deemed as assessee in default during period of stay or not?
2)If he has not taken stay of demand and further wins the case will he be treated as assessee in default?
please please help
I am totally confused over law of stay of demand.Please help me in my following queries:-
1)If an assessee has taken stay of demand and files his appeal sai in CIT(A) and further loses the appeal then at what time period he has to pay demand.within 30 days of fresh demand notice or next day on which appeal is decided and in this case if he doesnt pay then from when he will be deemed as assessee in default?Will he be deemed as assessee in default during period of stay or not?
2)If he has not taken stay of demand and further wins the case will he be treated as assessee in default?
please please help
04 June 2009
Please go thro section 220(6)
04 June 2009
sir it is not clear in those sections thats why i have asked this query please provide me with a detailed answer.
25 July 2025
Sure! Here’s a clear explanation of the **law of stay of demand** and your queries:
---
### 1) **If assessee has taken stay of demand and loses the appeal before CIT(A)**
* When the Assessing Officer (AO) issues a demand and the assessee appeals to the Commissioner of Income Tax (Appeals) \[CIT(A)] **with stay of demand granted**, the assessee is **not required to pay the demand until the appeal is decided**.
* If the assessee **loses the appeal**, the CIT(A) will issue an order confirming or enhancing the demand.
* The assessee is then required to pay the demand within **30 days from the date of communication of the order by the CIT(A)**.
* If the assessee **fails to pay within 30 days**, the AO can initiate recovery proceedings and the assessee will be deemed as **assessee in default from the 31st day**.
* **During the stay period**, the assessee is **not treated as in default** because payment obligation is suspended by the stay.
---
### 2) **If assessee has NOT taken stay of demand and wins the appeal**
* If the assessee does **not take stay of demand**, the demand is payable as per the notice.
* If the assessee fails to pay the demand within the prescribed time, the assessee will be treated as **assessee in default** from the due date of payment.
* If **later on, the assessee wins the appeal**, the demand is quashed or reduced, and refund or adjustment is made accordingly.
* But, **during the pendency of the demand without stay and non-payment, the assessee is treated as in default**.
---
### Summary Table
| Scenario | Stay of Demand | Payment Status | Deemed Assessee in Default? | When? |
| --------------------------------------------- | -------------- | ---------------------------------- | --------------------------------------------- | ------------------------------- |
| Appeal filed with stay and lost | Yes | Pay within 30 days of CIT(A) order | No during stay; Yes if not paid after 30 days | After 30 days from CIT(A) order |
| Appeal filed without stay and demand not paid | No | Demand payable immediately | Yes from due date of payment notice | From due date of demand payment |
---
If you want, I can also guide on how to apply for stay of demand or provide relevant sections/circulars under the Income Tax Act.
Would you like that?
---
### 1) **If assessee has taken stay of demand and loses the appeal before CIT(A)**
* When the Assessing Officer (AO) issues a demand and the assessee appeals to the Commissioner of Income Tax (Appeals) \[CIT(A)] **with stay of demand granted**, the assessee is **not required to pay the demand until the appeal is decided**.
* If the assessee **loses the appeal**, the CIT(A) will issue an order confirming or enhancing the demand.
* The assessee is then required to pay the demand within **30 days from the date of communication of the order by the CIT(A)**.
* If the assessee **fails to pay within 30 days**, the AO can initiate recovery proceedings and the assessee will be deemed as **assessee in default from the 31st day**.
* **During the stay period**, the assessee is **not treated as in default** because payment obligation is suspended by the stay.
---
### 2) **If assessee has NOT taken stay of demand and wins the appeal**
* If the assessee does **not take stay of demand**, the demand is payable as per the notice.
* If the assessee fails to pay the demand within the prescribed time, the assessee will be treated as **assessee in default** from the due date of payment.
* If **later on, the assessee wins the appeal**, the demand is quashed or reduced, and refund or adjustment is made accordingly.
* But, **during the pendency of the demand without stay and non-payment, the assessee is treated as in default**.
---
### Summary Table
| Scenario | Stay of Demand | Payment Status | Deemed Assessee in Default? | When? |
| --------------------------------------------- | -------------- | ---------------------------------- | --------------------------------------------- | ------------------------------- |
| Appeal filed with stay and lost | Yes | Pay within 30 days of CIT(A) order | No during stay; Yes if not paid after 30 days | After 30 days from CIT(A) order |
| Appeal filed without stay and demand not paid | No | Demand payable immediately | Yes from due date of payment notice | From due date of demand payment |
---
If you want, I can also guide on how to apply for stay of demand or provide relevant sections/circulars under the Income Tax Act.
Would you like that?
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