Every time an assessment order is issued under sections 143(3), 147, or 271(1)(c), the assessing officer also raises a notice of demand under section 156. Typically, this demand notice must be paid within 30 days after delivery or receipt. Assessee becomes assessee in default if they don't pay the demand within the stipulated time. Then, in accordance with section 220(2), the assessee must pay simple interest at the rate of 1% for each month or portion of a month that is included in the period that starts on the day that follows the conclusion of the time period specified in the demand notice and ends on the day that the demand is paid. Penalties under Section 271 may also apply to this default. If the demand amount, interest, and any applicable penalties are not paid within the allotted period, the AO may use coercive measures to recoup the funds, including attaching the assessee's bank account. A demand notice for any further demands made during the assessment is served when it is finished. Large demands are occasionally made against the assessee by framing very critical assessments because there is disagreement over how the law or the facts should be interpreted, or because the AO is not satisfied with the assessee's responses. For the purposes of this section, any amount that is decided to be payable by the assessee, the deductor, or the collector under sections 143(1), 200A (1), or 206CB(1) will be considered as a notice of demand in the notification under those sections. The author discusses the powers of the assessing authority in this article while staying demand and the vested rights as per Section 220 (6) of the Income Tax Act, 1961.
Keywords: Stay Income Tax Section 220(6)
Suggested Citation: Suggested Citation
Subramanian, Dr Sankar Ganesh, Powers of Assessing Officer Under Section 220(6) of Income Tax Act, 1961 – Stay of Demand – A Detailed Analysis (April 17, 2024). Available at SSRN: https://ssrn.com/abstract=4797454 or http://dx.doi.org/10.2139/ssrn.4797454
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