The assessee had filed an appeal before the Commissioner (Appeals), obtained a stay of demand under section 220(6) by depositing more than 20% of the disputed tax, and was consequently treated as not being in default; the Revenue could not adjust any refund due to the assessee against the stayed demand. Once the AO grants a stay and treats the assessee as not in default, the outstanding demand remains unenforceable during the subsistence of such stay. Accordingly, the adjustment of the refund for A.Y. 2024-25 against the disputed demand of A.Y. 2013-14 was impermissible, and the Revenue was directed to refund the amount so adjusted, except the amount voluntarily deposited by the assessee while seeking stay of demand. (AY. 2024-25)