JKNP & ASSOCIATES

31. When tax, etc., payable and when assessee deemed in default.

(1) Any amount specified as payable in a notice of demand under section 30 shall be paid within [thirty days] of the service of the notice at the place and to the person mentioned in the notice:

Provided that, where the [Assessing Officer] has any reason to believe that it will be detrimental to revenue if the full period of  [thirty days] aforesaid is allowed, he may, with the previous approval of the [Joint Commissioner], direct that the sum specified in the notice of demand shall be paid within such period being a period less than the period of ¹²[thirty days] aforesaid, as may be specified by him in the notice of demand.

(2) If the amount specified in any notice of demand under section 30 is not paid 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:]

Provided that, where as a result of an order under section 23, [or section 23A,] or section 24, or section 25, or section 26, or section 27, or section 29, or section 35 [or any order of the Wealth-tax Settlement Commission under sub-section (4) of section 22D], the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded:

[Provided further that in respect of any period commencing on or before the 31st day of March, 1989, and ending after that date, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of ¹⁸[one] per cent for every month or part of a month.]

[(2A) Notwithstanding anything contained in sub-section (2), the [Chief Commissioner or Commissioner] may reduce or waive the amount of interest [paid or] payable by an assessee under the said sub-section if  [he is satisfied that]—

(3) Without prejudice to the provisions contained in sub-section (2), on an application made by the assessee before the expiry of the due date under sub-section (1), the [Assessing Officer] may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case.

(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.

(5) If in a case where payment by instalments is allowed under sub-section (3), the assessee commits default in paying any one of the instalments within the time fixed under that sub-section, the assessee shall be deemed to be in default as to the whole of the amount then outstanding, and the other instalment or instalments shall be deemed to have been due on the same date as the instalment actually in default.

(6) Where an assessee has presented an appeal under section 23 [or section 23A], the [Assessing Officer] may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of.

(7) Where an assessee has been assessed in respect of assets located in a country outside India, the laws of which prohibit or restrict the remittance of money to India, the [Assessing Officer] shall not treat the assessee as in default in respect of that part of the tax which is attributable to those assets, and shall continue to treat the assessee as not in default in respect of that part of the tax until the prohibition or restriction of remittance is removed.