G.—Interest payable to the Central Government
Interest for default in furnishing retrun of tax basis.
209. (1) Where an assessee defaults in furnishing the return of tax-bases, he shall be liable to pay simple interest at the rate of one per cent. per month, in circumstances specified in sub-section (2) for the period mentioned in sub-section (3) on the amount computed under sub-section (4).
(2) The circumstances referred to in sub-section (1) shall be -
(a) where the return of tax-bases for any financial year under sub-section (1) or sub-section (6) of section 144 or sub-section (1) of section 146 is furnished after the due date, or is not furnished;
(b) where the return of tax-bases for any financial year is required by a notice under section 159 and no return of tax-bases has been furnished for such year before the issue of such notice; or
(c) where the return of tax bases for any financial year is required by a notice under section 159 and—
(i) such notice has been issued after the determination of income under sub-section (1) of section 149 or after the completion of an assessment under section 155 or section 156 or section 159; and
(ii) such return has been furnished after the expiry of time allowed under such notice or is not furnished.
(3) The period referred to in sub-section (1) shall—
(a) in a case referred to in clause (a) or clause (b) of sub-section (2), shall commence on the date immediately following the due date and—
(i) end on the date of furnishing of the return; or
(ii) end on the date of completion of assessment under section 156 or section 159, where no return has been furnished;
(b) in a case referred to in clause (c) of sub-section (2), shall commence on the date immediately following the last date of the time allowed under the notice referred in said clause (c), and—
(i) end on the date of furnishing of the return where the return is furnished after expiry of the time allowed; or
(ii) end on the date of completion of assessment under section 159 where no return has been furnished.
(4) The amount referred to in sub-section (1),—
(a) in a case referred to in clause (a) or clause (b) of sub-section (2), shall be computed in accordance with the following formula -
A - B
Where
A = the amount of the tax on the total income determined under sub-section (1) of section 149 or on assessment made under sub-section (1) of section 155 or sub-section (1) of section 156 or under section 159, as the case may be;
B = the aggregate of —
(i) advance tax paid, if any;
(ii) any tax deducted or collected at source;
(iii) any relief of tax allowed under section 291 on account of tax paid in a country or specified territory outside India;
(iv) any deduction, from the Indian income-tax payable, allowed under section 207, on account of the tax paid in a country outside India; and
(v) any tax credit available for set-off under section 106;
(b) in a case referred to in clause (c) of sub-section (2), shall be the amount by which tax determined on reassessment exceeds the tax on the total income determined under sub-section (1) of section 149 or on the basis of the earlier assessment, as the case may be.
(5) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 147 towards the interest chargeable under this section.
(6) The interest payable under this section shall be increased or reduced, in accordance with the variation in the amount of tax on which interest was payable under this section, as a result of modification in the assessed income on account of any rectification, revision or appellate order under this Code.
(7) The Assessing Officer shall serve on the assessee a notice of demand, in such form as may be prescribed, specifying the sum payable on account of increase in the interest referred under sub-section (6) and such notice shall be deemed to be a notice under section 162 and the provisions of this Code shall apply accordingly.
(8) The excess interest paid, if any, shall be refunded in a case where the interest is reduced under sub-section (6).
