Amendment of section 220.
88. In section 220 of the Income-tax Act, in sub-section (2A), after clause (iii), the following provisos shall be inserted with effect from the 1st day of June, 2016, namely:-
“Provided that the order accepting or rejecting the application of the assessee, either in full or in part, shall be passed within a period of twelve months from the end of the month in which the application is received:
Provided further that no order rejecting the application, either in full or in part, shall be passed unless the assessee has been given an opportunity of being heard:
Provided also that where any application is pending as on the 1st day of June, 2016, the order shall be passed on or before the 31st day of May, 2017.”.
Notes on Clauses:
Clause 88 of the Bill seeks to amend section 220 of the Income-tax Act relating to when tax payable and when assessee is deemed in default.
The aforesaid section provides for an assessee to be deemed to be in default and its consequences in case of failure on the part of the assessee to pay the amount of tax due. Sub-section (2) of the said section provides for levy of interest at the rate of one per cent. for every month or part of month for the period during which the default continues. Sub-section (2A) of the said section, inter alia, empowers the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner to reduce or waive the amount of interest paid or payable under sub-section (2) of the said section.
It is proposed to amend sub-section (2A) of the said section so as to provide that an order accepting or rejecting the application of an assessee shall be passed by the concerned Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner within a period of twelve months from the end of the month in which such application is received. It is further proposed to provide that no order shall be passed without giving the assessee an opportunity of being heard. However, in respect of the applications pending as on 1st day of June, 2016, the order shall be passed on or before 31st May, 2017.
These amendments will take effect from 1st June, 2016.
