Can hc/sc grant stay on payment of demand ?

Tax queries 759 views 2 replies

CA Shammi Prabhakar

Managing Director

2076 Points Posted on 15 September 2011

If AO has passed any demand order u/s 156, and CIT (A) and ITAT has also confirmed that order in their decision.

Now Assessee moved to HC to appeal against such case, Do the HC has power to Grant Stay on payment of that demand. Can HC start it's proceeding before assessee has deposited 100% demand to the Dept. ?

As per other rule,If assessee has not paid demand within 30 days from service of final demand order, he will be deemed to be assesse in default.

What will be the impact of being "Assessee in default" on such hearing.

Replies (2)

CA SOURAV KUMAR GANDHI

B.com (H) CA

133 Points Posted on 15 September 2011

When an assessee fails to pay the demand amount within 30 days from the service of any order under Income Tax Act, 1961, then such an assessee will be deemed to be an assessee in default. Interest u/s 220 and penalty u/s 221 will be consequence of such default:

INTEREST U/S 220: Interest at the rate of 1% p.m simple interest will be charged on the demand amount for a period commencing on the day after the expiry of such 30 days, till the date of payment. Any part of the month will be counted as 1 month. The interest u/s 220 is in addition to interest u/s 234A, 234B, and 234C.

PENALTY U/S 221: Assessing officer can levy penalty for an amount not exceeding the demand amount.

hope you got cleared about the same.

Thanks & Regards

sourav