D.—Collection and recovery

When tax payable and when assessee deemed in default.

⁷⁴220. (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 ⁷⁵[thirty] days of the service of the notice at the place and to the person mentioned in the notice :

Provided that, where the ⁷⁶[Assessing] Officer has any ⁷⁷reason to believe that it will be ⁷⁷detrimental to revenue if the full period of ⁷⁸[thirty] days aforesaid is allowed, he may, with the previous approval of the ⁷⁹[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 ⁸⁰[thirty] days aforesaid, as may be specified by him in the notice of demand.

⁸¹(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 ⁸²[⁸³[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 :]

⁸⁴[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 ⁸⁵[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 :]

⁸⁵[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.]

⁸⁶[(2A) Notwithstanding anything contained in sub-section (2), ⁸⁷[the ⁸⁸[Chief Commissioner or Commissioner] may] reduce or waive the amount of interest ⁸⁹[paid or] payable by an assessee under the said sub-section if ⁹⁰[he is satisfied] that—

           (i)  payment of such amount ⁹¹[has caused or] would cause genuine hardship to the assessee ;

          (ii)  default in the payment of the amount on which interest ⁹¹[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.]

(3) Without prejudice to the provisions contained in sub-section (2)⁹², on an application made by the assessee before the expiry of the due date under sub-section (1), the ⁹³[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 ⁹⁴[or section 246A] the ⁹⁵[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 ⁹⁵[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.