Application for Stay of Tax Demand — Template

To,
The Assessing Officer,
[Ward / Circle], Income Tax Department,
[City]
(copy to the Principal Commissioner of Income-tax, [Charge])

Date: [__________]

PAN            : [ABCDE1234F]
Name           : [Name of Assessee]
Assessment Year: [2024-25]
Demand Notice  : u/s 156 dated [date], Demand ₹[__,__,___]

Subject: Application for stay of demand and to treat the assessee as
         "not in default" u/s 220(6) pending disposal of appeal.

Respected Sir/Madam,

1. Consequent to the assessment order u/s [143(3)] dated [date], a
   demand of ₹[__,__,___] has been raised vide notice u/s 156. The
   demand arises mainly from the addition of ₹[______] u/s [68/section],
   which is wholly disputed by the assessee.

2. The assessee has filed an appeal before the CIT(A) / NFAC on [date]
   vide Form 35, appeal No. [____] (copy enclosed). The appeal is
   pending and involves a substantial question with high likelihood of
   success, as the addition is contrary to [state ground / case law].

3. In terms of CBDT Office Memorandum No. 404/72/93-ITCC dated
   29.02.2016 (as modified on 31.07.2017), recovery of the disputed
   demand is to be stayed on payment of 20% of the demand pending
   first-appeal disposal. The assessee has already paid ₹[______]
   (being [20]% of the disputed demand) vide challan dated [date]
   (BSR [___], challan [___]) — copy enclosed at Annexure-A.

4. The balance demand of ₹[______] causes genuine hardship because
   [e.g. it would cripple working capital / attach the only bank
   account / the addition is prima facie unsustainable]. The three
   factors of prima facie case, balance of convenience and irreparable
   injury are all in the assessee's favour.

5. It is therefore prayed that Your Honour may kindly:
   (a) treat the assessee as "not in default" u/s 220(6) in respect of
       the balance demand of ₹[______];
   (b) stay the recovery / keep the demand in abeyance until disposal
       of the pending appeal by the CIT(A); and
   (c) direct that no coercive measures (bank attachment u/s 226(3),
       adjustment of refunds u/s 245) be taken in the meantime.

Enclosures:
  Annexure-A : Challan for 20% pre-deposit
  Annexure-B : Copy of Form 35 / appeal acknowledgement
  Annexure-C : Copy of assessment order and demand notice u/s 156
  Annexure-D : Financial statements / cash-flow showing hardship

Thanking you,
Yours faithfully,

[Name of Assessee / Authorised Representative]
PAN: [ABCDE1234F]
Date: [__________]   Place: [__________]