The circular of the Central Board of Revenue (No. 14 (SL-35) of 1955, dated April 11, 1955) requires the officers of the Department ‘to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs . . . In keeping note of this circular the Madras High Court held that notwithstanding the fact that the assessee may not have specifically invoked the three parameters for the grant of stay viz. prima facie case, the financial stringency faced by an assessee and the balance of convenience, it is incumbent upon the tax officer to examine the existence of a prima facie case as well as call upon the assessee to demonstrate financial stringency, if any and arrive at the balance of convenience in the matter.
In this case, the AO rejected the application for stay on the reason that the mere filing of an appeal is no valid ground for stay of collection and further required the assessee to pay 20% of demand.
In 414ITR52 the even the notices issued under section 226(3) to the assessee’s banks by the tax officer were also quashed and the attachment of the bank accounts was lifted forthwith for want of a speaking order.