Where the assessee, a charitable society, challenged the assessment order and consequential penalty notice under sections 274 read with section 271F and filed an appeal before the CIT(A) along with an application for stay of recovery, the stay application was rejected solely on the ground that the assessee had not deposited 20% of the disputed demand as per the CBDT Office Memorandum dated 31-7-2017. Allowing the writ petition, the High Court held that the Income-tax Act does not prescribe any statutory requirement of pre-deposit for grant of stay and that executive instructions may supplement the statute but cannot impose a condition contrary to it. The Court observed that discretion in stay matters must be exercised reasonably and judiciously, particularly where the assessee had raised a substantive challenge to the assessment and serious prejudice was likely to be caused by coercive recovery. Since the Department itself had treated the case as non-priority and the appeal was fixed for hearing after several months, exemption from pre-deposit ought to have been granted. Accordingly, the order refusing stay was set aside and the operation of recovery and penalty notices was stayed by High Court. SLP of revenue dismissed.  (AY. 2015-16)