Notice of Demand - Section 156 - Income Tax - Ready Reckoner - Income Tax

Notice of Demand - Section 156 1. When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Income-tax Act, the Assessing Officer shall serve upon the assessee a notice of demand in specifying the sum so payable. 2. Where any sum is determined to be payable by the assessee or the deductor u/s 143(1) or section 200A , the intimation under those sub-sections shall be deemed to be notice of demand for the purpose of section 156. 3. Where the income of the assessee of any assessment year, beginning on or after the 01.04.2021, includes income of the nature specified in section 17(2)(vi) and such specified security or sweat equity shares referred to in the said clause are allotted or transferred directly or indirectly by the current employer, being an eligible start-up referred to in section 80-IAC , the tax or interest on such income included in the notice of demand referred to in section 156(1) shall be payable by the assessee within 14 days (i) after the expiry of forty-eight months from the end of the relevant assessment year; or (ii) from the date of the sale of such specified security or sweat equity share by the assessee; or (iii) from the date of the assessee ceasing to be the employee of the employer who allotted or transferred him such specified security or sweat equity share, whichever is the earliest. NOTES:- For payment of advance tax, notice of demand in Form No. 28 u/s 156 can be given by the Assessing Officer as per section 210 Recovery proceedings would be invalid if the relevant notice of demand had not been served. Section 156 provides for a vital step to be taken by the Assessing Officer without which the assessee cannot be termed as defaulter. The use of the term shall in section 156 implies that service of the notice of demand is mandatory before initiating recovery proceedings and constitutes the foundation of subsequent recovery proceedings.[ Sri Mohan Wahi Versus CIT And Others- [ 2001 (3) TMI 4- SC]