LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Outstanding tax demand

Joy (Student Others) (27 Points)

05 July 2015

Hi All,

I got an outstanding amount of Rs:2100 for the AY 2009-10 under section 1431a and I paid that amount by submitting challan280 last month.

Now when I open the income tax site it is showing another outstanding amount of Rs1500 under section 220(2) for the same assesment year. I am clueless why it showing another amout.

As I dont have much knowledge on this. Could anyone please help me out on what do i need to do?

Thanks & Regards,

Joyanta

Reply
Follow
Share

7 Replies

Z ( ) (2960 Points)
Replied 05 July 2015

S.220(2) If the amount specified in any notice of demand under section 156 is not paid

[Note that intimation u/s 143(1) is deemed to be as notice of demand ]

within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid :

Joy (Student Others) (27 Points)
Replied 05 July 2015

Hi,

Thanks for your qucik response. Just to clarify my understanding, so this amount is the simple interest of the outstanding demand of Rs 2100(AY 2009-10) which i paid.The demand was raised on July 2010, so they have calculated interest for 5 years.Am I right?

If so, how do I need to pay this amount ? Same way how I paid outstanding demand of Rs 2100 by submitting Challan280 under (400)TAX ON REGULAR ASSESSMENT.

Regards,

Joyanta

Z ( ) (2960 Points)
Replied 05 July 2015

Yes, since demand was raised and it was not paid voluntarily.

Joy (Student Others) (27 Points)
Replied 05 July 2015

Hi,

I have two more doubts.

1. Is there also interest applicable to the amount(Rs 1500) showing under section 220(2) if I am paying late?

2. Do I need to pay this amount by submitting chalan or since I am expecting some refund amount in the current AY 2015-16 after tax filling, so this amount will be automatically adjusted with that refund?

Thank you so much for clearing my doubts. It is really helpful for me.

Regards,

Joyanta

Z ( ) (2960 Points)
Replied 06 July 2015

Rather pay immediately via challan and claim refund later, otherwise its a lengthy procedure , they will have to issue notice u/s 245 for refund adjustment and then again you will be given some time (30 days) to pay the arrears and if you dont pay in that time and if no further time is provided to you, then the refund is adjusted. This whole thing can take more than a month.

No more interest, but if you do not pay within time limit you may be treated as assessee in default for which there is penalty. Penalty is levied by AO and not paid voluntarily. Pay immediately.

S.220(4) If the amount is not paid within the time limited under sub-section (1) or extended under sub-section (3), as the case may be, at the place and to the person mentioned in the said notice the assessee shall be deemed to be in default.

221. (1) When an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under sub-section (2) of section 220, be liable, by way of penalty, to pay such amount as the Assessing Officer may direct, and in the case of a continuing default, such further amount or amounts as the Assessing Officer may, from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears :

Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard :

1 Like