notice of demand is issued u/s 156 in respect of every order passed under this act. According to said section you have to deposit the amount demanded within 30 days from the date of receipt of notice. Other wise you will be deemed to be an assessee in default. The consequences of such default are:
INTEREST U/S 220: This interest is in addition to interest u/s 234A, 234B, 234C. Interest at the rate of 1% p.m. or part of month is to be paid after the expiry of said 30 days.
PENALTY U/S 221: The Assessing Officer can levy a penalty of an amount not exceeding the amount demanded.
NOTE: It will be prudent to deposit the amount within 30 days.
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