Interest under section 220 (2) on order received u/s 245d(4)

[Guest]

As per the order u/s 245 it is mentioned as follows ' The applicant requested for installment facility in paying the balance tax demand. This is considered and the applicant is allowed to pay the demand along with interest arising on account of giving effect to this order within six months ( in six equal monthly instalments) after receipt of notice of demand '

As per the Assessment order issued in response to this order u/s 245D(4) certain demand is raised and the AO has mentioned a point saying ' The demand may be paid in 6 equal monthly installments. The last installment to be paid with interest u/s 220(2).'

Question :

1) Is interest u/s 220(2) applicable on order u/s 245D(4) even if order itself gives a relief of 6 installments ???

2) If applicable then under what circumstances can it be waived off.????

[DR.MARIAPPAN GOVINDARAJAN]

In my view the contention of the AO is correct.

AI Summary

Interest under section 220(2) can apply to demands from section 245D(4) orders despite granting instalment payment terms. Whether interest under section 220(2) applies to a demand raised by an assessment order issued pursuant to an order under section 245D(4) which permits payment in six equal monthly instalments; the Assessment Officer treated the last instalment as payable with interest under section 220(2), and the responding commentator concurred with the AO's position.