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Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default Where a high-pitched assessment was made resulting in a demand of Rs. 1,40,25,762, in view CBDT Instruction No.96, dated 21-8-1969, assessee's prayer for stay of tax was to be granted and could not be rejected on the ground that assessee had not shown any valid reason for stay of demand [Assessment year 2004-05] The petitioner applied to the first respondent under section 220(6) for stay of the demand raised by the first respondent. The first respondent rejected the same on the ground that the petitioner had no valid reason to have an order of stay of demand. Held that it was not in dispute that a high-pitched assessment had been made assessing a sum of Rs. 5,01,132,504. The CBDT Instruction No. 96, dated 21-8-1969 would squarely apply to the case of the petitioner. The mere statement in the impugned order without any factual foundation that 'no valid reason had been stated for stay of the demand' by the Assessing Officer could not be appreciated. When the petitioner had relied on the Department's own guidelines, the Assessing Officer could have rejected the circular by giving reasons for coming to the conclusion that the circular would not be applicable to the petitioner or accept the same and grant the relief as prayed for by the petitioner. Without doing so, by simply saying that the assessee had no valid reason for the grant of stay, order of Assessing Officer rejecting the assessee's prayer for stay of demand was not legally sustainable. G V. Rajan for the Petitioner. J. Naresh kumar for the Respondent. JUDGMENT K. Raviraja Pandian, J.- The writ petition is filed seeking for the relief of issuance of a writ of certiorarified mandamus to call for the records of the first respondent in Coy. WIV (1)/AACCM 5458M/500-M/ 2004-05. Stay relating to the application made by the petitioner for stay of demand under section 220(6) of the Income-tax Act, 1961, and quash the order dated March 5, 2007, rejecting the stay petition and direct the first respondent to pass orders thereon after affording opportunity of hearing and to grant stay of…

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