When tax payable and when assessee deemed in default 2
Any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under section 156 shall be paid within thirty days of the service of the notice at the place and to the person mentioned in the notice Provided that, where the Assessing Officer has any reason to believe that it will be detrimental to revenue if the full period of thirty days aforesaid is allowed, he may, with the previous approval of the Deputy Commissioner, direct that the sum specified in the notice of 999999. -- or sub- section 2 of section 212 an estimate or a revised estimate of the advance tax payable by him, he shall be deemed to be an assessee in default in respect of such instalment or instalments. 3 Notwithstanding anything contained in sub- section 1 or sub- section 2 , an assessee shall not be deemed to be in default in respect of any amount of which the payment is deferred under section 213 until after the date communicated by him to the income- tax Officer under that section. 1. Prior to the omission, the proviso, as inserted by the Finance Act, 1968, w. e. f. 1- 4- 1968, read as under Provided that where, before the completion of the regular assessment, a provisional assessment is made under section 141A, the credit shall be given also in such provisional assessment. 3. Substituted for thirty- five by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. 4. Substituted for Income- tax, ibid, w. e. f. 1- 4- 1988. 5. Substituted for thirty- five, ibid, w. e. f. 1- 4- 1989. 6. Substituted for Inspecting Assistant, ibid, w. e. f. 1- 4- 1988. demand shall be paid within such period being a period less than the period of thirty days aforesaid, as may be specified by him in the notice of demand.
Substituted by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. Prior to the substitution, sub- section 2 read as under 2 The Assessing Officer may issue a certificate under sub- section 1 notwithstanding that proceedings for recovery of the arrears by any other mode have been taken. The italicised word was substituted for Income- tax by the Direct Tax Laws Amendment Act, 1989, w. r. e. f. 1- 4- 1988.
If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub- section 1 , the assessee shall be liable to pay simple interest at one and one- half per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub- section 1 and ending with the day on which the amount is paid Provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264 or an order of the Settlement Commission under sub- section 4 of section 245D, the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded Provided further that in respect of any period commencing on or before the 31st day of March, 1989 , and ending after that date, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of one and one- half per cent for every month or part of a month.
2A Notwithstanding anything contained in sub- section 2 , the Chief Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by an assessee under the said sub- section if he is satisfied that- i payment of such amount has caused or would cause genuine hardship to the assessee ii default in the payment of the amount on which interest has been paid or was payable under the said sub- section was due to circumstances beyond the control of the assessee and iii the assessee has co- operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him. 1. Substituted for thirty- five by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. 3. Substituted for fifteen per cent per annum from the day commencing after the end of the period mentioned in sub- section 1 by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. 4. Inserted by the Finance Act, 1963, w. r. e. f. 1- 4- 1962. 5. Inserted by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. 6. Ibid. 7. Inserted by the Taxation Law Amendment Act, 1984, w. e. f. 1- 10- 1984. 8. Substituted for the Board may by the Taxation Laws Amendment and Miscellaneous Provisions Act, 1986, w. e. f. 1- 4- 1987. 9. Substituted for Commissioner by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1988. 10. Inserted by the Taxation Laws Amendment and Miscellaneous Provisions Act, 1986, w. r. e. f. 1- 10- 1984. 11. Substituted for, on the recommendation made by the Commissioner in this behalf, it is satisfied, ibid, w. e. f. 1- 4- 1987. 12. Inserted, ibid, w. r. e. f. 1- 10- 1984. 13. Ibid.
payment of such amount has caused or would cause genuine hardship to the assessee
default in the payment of the amount on which interest has been paid or was payable under the said sub- section was due to circumstances beyond the control of the assessee and
the assessee has co- operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him. 1. Substituted for thirty- five by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. 3. Substituted for fifteen per cent per annum from the day commencing after the end of the period mentioned in sub- section 1 by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. 4. Inserted by the Finance Act, 1963, w. r. e. f. 1- 4- 1962. 5. Inserted by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. 6. Ibid. 7. Inserted by the Taxation Law Amendment Act, 1984, w. e. f. 1- 10- 1984. 8. Substituted for the Board may by the Taxation Laws Amendment and Miscellaneous Provisions Act, 1986, w. e. f. 1- 4- 1987. 9. Substituted for Commissioner by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1988. 10. Inserted by the Taxation Laws Amendment and Miscellaneous Provisions Act, 1986, w. r. e. f. 1- 10- 1984. 11. Substituted for, on the recommendation made by the Commissioner in this behalf, it is satisfied, ibid, w. e. f. 1- 4- 1987. 12. Inserted, ibid, w. r. e. f. 1- 10- 1984. 13. Ibid.
Without prejudice to the provisions contained in sub- section 2 , on an application made by the assessee before the expiry of the due date under sub- section 1 , the Assessing Officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case.
If the amount is not paid within the time limited under sub- section 1 or extended under sub- section 3 , as the case may be, at the place and to the person mentioned in the said notice the assessee shall be deemed to be in default.
If, in a case where payment by instalments is allowed under subsection 3 , the assessee commits default in paying any one of the instalments within the time fixed under that sub- section, the assessee shall be deemed to be in default as to the whole of the amount then outstanding, and the other instalment or instalments shall be deemed to have been due on the same date as the instalment actually in default.
Where an assessee has presented an appeal under section 246, the Assessing Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of.
Where an assessee has been assessed in respect of income arising outside India in a country the laws of which prohibit or restrict the remittance of money to India, the Assessing Officer shall not treat the assessee as in default in respect of that part of the tax which is due in respect of that amount of his income which, by reason of such prohibition or restriction, cannot be brought into India, and shall continue to treat the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removed. Explanation.- For the purposes of this section, income shall be deemed to have been brought into India if it has been utilised or could have been utilised for the purposes of any expenditure actually incurred by the assessee outside India or if the income, whether capitalised or not, has been brought into India in any for. Penalty payable when tax in default 1 221 Penalty payable when tax in default 1
When an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under sub- section 2 of section 220, be liable, by way of penalty, to pay such amount as the Assessing Officer may direct, and in the case of a continuing default, such further amount or amounts as the 4 Assessing Officer may, from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard Provided further that where the assessee proves to the satisfaction of the Assessing Officer that the default was for good and sufficient reasons, no penalty shall be levied under this section. Explanation.- For the removal of doubt, it is hereby declared that an assessee shall not cease to be liable to any penalty under this sub- section merely by reason of the fact that before the levy of such penalty he has paid the tax.
Where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded. 2. Substituted by the Taxation Laws Amendment Act, 1970, w. e. f. 1- 4- 1971 3. Substituted for Income- tax by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1988. 4. Ibid. 5. Substituted by the Taxation Laws Amendment and Miscellaneous Provisions Act, 1986, w. e. f. 10- 9- 1986. Prior to the substitution, the second proviso substituted as a part of sub- section 1 by the Taxation Laws Amendment Act, 1970, read as under Provided further that where the Income- tax Officer is satisfied that the default was for good and sufficient reasons, no penalty shall be levied under this section. 6. Substituted for Income- tax by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1988. 7. Inserted by the Taxation Laws Amendment Act, 1975, w. e. f. 1- 10- 1975. 222. Certificate to Tax Recovery Officer 1 1 2 When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a statement in the prescribed form 3 specifying the amount of arrears due from the assessee such statement being hereafter in this Chapter and in the Second Schedule referred to as certificate and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule- a attachment and sale of the assessee s movable property b attachment and sale of the assessee s immovable property c arrest of the assessee and his detention in prison d appointing a receiver for the management of the assessee s movable and immovable properties. 4 Explanation.- For the purposes of this sub- section, the assessee s movable or immovable property shall include any property which has been transferred, directly or indirectly on or after the 1st day of June, 1973, by the assessee to his spouse or minor child or son s wife or son s minor child, otherwise than for adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid and so far as the movable or immovable property so transferred to his minor child or his son s minor child is concerned, it shall, even after the date of attainment of majority by such minor child or son s minor child, as the case may be, continue to be included in the assessee s movable or immovable property for recovering any arrears due from the assessee in respect of any period prior to such date. 2 5 The Tax Recovery Officer may take action under sub- section 1 , 2. Substituted for When an assessee is in default or is deemed to be in default in making a payment of tax, the Assessing Officer may forward to the Tax Recovery Officer a certificate under his signature specifying the amount of arrears due from the assessee, and the Tax Recovery Officer on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule- by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. The italicised word was substituted for Income- tax by the Direct Tax Laws Amendment Act, 1989, w. r. e. f. 1- 4- 1988. 4. Inserted by the Taxation Laws Amendment Act, 1975, w. e. f. 1- 10- 1975. 5. Substituted by the Direct Tax Laws Amendment Act, 1987, w. e. f. 1- 4- 1989. Prior to the substitution, sub- section 2 read as under 2 The Assessing Officer may issue a certificate under sub- section 1 notwithstanding that proceedings for recovery of the arrears by any other mode have been taken. The italicised word was substituted for Income- tax by the Direct Tax Laws Amendment Act, 1989, w. r. e. f. 1- 4- 1988. notwithstanding that proceedings for recovery of the arrears by any other mode have been taken.