Tax Authority Cannot Demand 20% Deposit Before Hearing Stay Application Under Income Tax Act Section 220(6)

HC set aside the order requiring mandatory 20% deposit of disputed tax demand as precondition for stay application hearing. The court found this requirement violated both Income Tax Act 1961 and CBDT guidelines. Per CBDT circular, 20% deposit requirement applies only after authority determines prima facie merit for interim relief. Authority failed to consider possibility of reducing deposit percentage based on assessee's circumstances. Matter remanded for fresh consideration within 4 weeks in accordance with guidelines, requiring reasoned order on stay application merits before imposing any deposit conditions. .....

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