How to get stay on income tax demand under Section 220(6)

• April 30, 2020
• CA Chandan Agarwal's Office

STAY OF DEMAND U/S 220(6) OF INCOME TAX ACT 1961

INTRODUCTION

1. Whenever assessing officer issues assessment order u/s 143(3), 147, 271(1)(c) along with it notice of demand u/s 156 is also raised. This demand notice is usually required to be paid within 30 days of service/receipt of the same. In case assessee fails to pay the demand within the required time, he/she becomes assessee in default.

2. Then as per section 220(2) assessee is required to pay simple interest at 1 % for every month or part of month comprised in the period commencing from the day immediately following the end of the period mentioned in demand notice and ending with the day on which demand is paid. This default may also accompany penalty u/s 271. In case demand amount along with interest and penalty if any is not paid within respective time, then AO may take coercive methods to recover the same such as attachment of bank account of assessee etc.

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