Exercise of discretion under section 220(6) of the Income-tax Act, 1961, to treat the assessee as not being in default in respect of the amounts disputed in first appeal pending before the Deputy Commissioner (Appeals)/Commissioner (Appeals)

Revised Guidance on Section 220(6) of Income-tax Act: Assessing Officers to Consider All Factors in Default Cases.

The circular addresses the exercise of discretion under section 220(6) of the Income-tax Act, 1961, regarding whether an assessee should be treated as not in default for amounts disputed in a first appeal. It references a previous circular, stating that in certain cases, the Assessing Officer must treat the assessee as not in default. For other cases, the officer should consider all relevant factors, excluding the assessee's financial capacity, to decide if they are in default. Following representations, the Board revised the guidance to ensure all factors influencing the demand are considered, and decisions are communicated through a speaking order.