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Home Acts & Rules Bill Bills FINANCE (No. 2) BILL, 2014 Chapters List Chapter III DIRECT TAXES This

Clause 62 - Amendment of section 220 - FINANCE (No. 2) BILL, 2014

FINANCE (No. 2) BILL, 2014
Chapter III
DIRECT TAXES
  • Contents
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Amendment of section 220

62. In section 220 of the Income-tax Act, with effect from the 1st day of October, 2014,––

          (i) after sub-section (1), the following sub-section shall be inserted, namely:––

          “(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];

          (ii) in sub-section (2),––

          (a) after the first proviso, the following proviso shall be inserted, namely:––

          “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:”;

          (b) in the second proviso, for the words “Provided further”, the words “Provided also” shall be substituted.

 



 

Notes on Clauses:

Clause 62 of the Bill seeks to amend section 220 of the Income-tax Act relating to when tax payable and when assesee deemed in default.

          The existing provision contained in sub-section (1) of the aforesaid section provides that any amount specified as payable in a notice of demand under section 156 shall be paid within thirty days of the service of notice at the place and to the person mentioned in the notice.

          It is proposed to insert a new sub-section in the said section so as to provide that 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.

          The first proviso to sub-section (2) of the said section provides 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 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.

          It is proposed to insert second proviso in the said section so as to provide 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.

          These amendments will take effect from the 1st October, 2014.

 
 
 
 

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