Section 220 - When tax payable and when assessee deemed in default - Income-tax Act, 1961

D.-Collection and recovery When tax payable and when assessee deemed in default. 220. (1) Any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under section 156 shall be paid within 1 [thirty] days of the service of the notice at the place and to the person mentioned in the notice : Provided that, where the 2 [Assessing] Officer has any reason to believe that it will be detrimental to revenue if the full period of 3 [thirty] days aforesaid is allowed, he may, with the previous approval of the 4 [Joint Commissioner], direct that the sum specified in the notice of demand shall be paid within such period being a period less than the period of 5 [thirty] days aforesaid, as may be specified by him in the notice of demand. 23 [(1A) Where any notice of demand has been served upon an assessee and any appeal or other proceeding, as the case may be, is filed or initiated in respect of the amount specified in the said notice of demand, then, such demand shall be deemed to be valid till the disposal of the appeal by the last appellate authority or disposal of the proceedings, as the case may be, and any such notice of demand shall have the effect as specified in section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964.[ 11 of 1964]] (2) 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 6 [ 7 [one] 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 :] 8 [ 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 9 [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 :] 24 [ Provided further that where as a result of an order under sections specified in the first proviso, the amount on which interest was payable under this section had been reduced and subsequently as a result of an order under said sections or section 263, the amount on which interest was payable under this section is increased, the assessee shall be liable to pay interest under sub-section (2) from the day immediately following the end of the period mentioned in the first notice of demand, referred to in sub-section (1) and ending with the day on which the amount is paid:] 10 [ 25 [ Provided also] 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.] 11 [(2A) Notwithstanding anything contained in sub-section (2), 12 [the 13 [ 26 [Principal Chief Commissioner or] Chief Commissioner or 26 [Principal Commissioner or] Commissioner] may] reduce or waive the amount of interest 14 [paid or] payable by an assessee under the said sub-section if 15 [he is satisfied] that- ( i ) payment of such amount 16 [has caused or] would cause genuine hardship to the assessee ; ( ii ) default in the payment of the amount on which interest 17 [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.] 28 [ Provided that the order accepting or rejecting the application of the assessee, either in full or in part, shall be passed within a period of twelve months from the end of the month in which the application is received: Provided further that no order rejecting the application, either in full or in part, shall be passed unless the assessee has been given an opportunity of being heard: Provided also that where any application is pending as on the 1st day of June, 2016, the order shall be passed on or before the 31st day of May, 2017.] 22 [ (2B) Notwithstanding anything contained in sub-section (2), where interest is charged under sub-section (1A) of section 201 on the amount of tax specified in the intimation issued under sub-section (1) of section 200A for any period, then, no interest shall be charged under sub-section (2) on the same amount for the same period. ] 27 [ (2C) Notwithstanding anything contained in sub-section (2), where interest is charged under sub-section (7) of section 206C on the amount of tax specified in the intimation issued under sub-section (1) of section 206CB for any period, then, no interest shall be charged under sub-section (2) on the same amount for the same period. ] (3) 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 18 [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. (4) 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. (5) If, in a case where payment by instalments is allowed under sub-section (3), the assessee commits defaults 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. (6) Where an assessee has presented an appeal under section 246 19 [or section 246A] the 20 [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. (7) 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 21 [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 form. ----------------------- Notes :- 1. Substituted for thirty-five by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 2. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3. Substituted for thirty-five by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 4. Substituted for the Deputy Commissioner by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier Deputy Commissioner was substituted for Inspecting Assistant Commissioner by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5. Substituted for thirty-five by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 6. 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. 7. Substituted for one and one-fourth by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003. Earlier one and one-fourth was substituted for one and one-half by the Finance Act, 2001, w.e.f. 1-6-2001. 8. Inserted by the Finance Act, 1963, w.r.e.f. 1-4-1962. 9. Inserted by the Taxation Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 10. Inserted by the Taxation Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 11. Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. 12. Substituted for the Board may by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1987. 13 . Substituted for Commissioner by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 14. Inserted by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986, w.r.e.f. 1-10-1984. 15. Substituted for , on the recommendation made by the Commissioner in this behalf, it is satisfied by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1987. 16. Inserted by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986, w.r.e.f. 1-10-1984. 17. Inserted by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986, w.r.e.f. 1-10-1984. 18. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 19. Inserted by the Finance Act, 2000, w.e.f. 1-6-2000. 20 . Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 21. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 22. Inserted vide Finance Act, 2012, w.e.f. 01-07-2012. 23. Inserted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of October, 2014. 24. Inserted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of October, 2014. 25. Substituted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of October, 2014 , before it was read as, Provided further 26 . Inserted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of June, 2013 27. Inserted vide THE FINANCE ACT, 2015 w.e.f. 1st day of June, 2015 28. Inserted vide THE FINANCE ACT, 2016 w.e.f. 01-06-2016