Find
Filing an appeal does not by itself stop recovery. Without a stay or the 20% payment and stay request, CPC can adjust the refund after the intimation period.
ITR
Appeal filed but no stay: will the refund be adjusted
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Provisions
Sec 245, Income-tax Act 1961 (now Sec 438, Income-tax Act 2025); Sec 246A, Income-tax Act 1961 (now Sec 357, Income-tax Act 2025); CBDT Office Memorandum dated 31 July 2017 (stay of demand on 20% payment)
Analysis
CBDT guidance lets officers stay the demand under first appeal if 20% is paid, unless the case is exceptional. Example: demand ₹1,50,000 under appeal and refund ₹25,000. You can let the ₹25,000 adjustment count towards the 20% (₹30,000), pay ₹5,000 more, and ask for a stay on the rest. Tell CPC in the response that the appeal is pending and a stay is sought.
Close
- Work out 20% of the disputed demand
- Decide whether to let the refund count towards that 20%
- File a stay application with the jurisdictional officer
- Respond: Disagree, reason appeal filed, stay petition filed
- Keep copies of the appeal and stay request
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