When tax payable and when assessee deemed in default.

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.... of thirty days is allowed. (2) Where any notice of demand has been served upon an assessee and any appeal or other proceeding, as the case may be, is filed or initiated in respect of the amount specified in the said notice of demand, then-- (a) such demand shall be deemed to be valid till the disposal of the appeal by the last appellate authority or disposal of the proceedings; and (b) any such notice of demand shall have the effect as specified in section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 (11 of 1964). ^1[(3) (a) If the amount specified in any notice of demand under section 289 is not paid within the period specified under sub-section (1),- (i) the asses....

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....),-- (a) the amount on which interest was payable under sub-section (3) had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded; and (b) if subsequent to such reduction, as a result of an order under said sections or section 377, the amount on which interest was payable is increased, the assessee shall be liable to pay interest under sub-section (3),- (i) from the day immediately following the end of the period mentioned in the first notice of demand, referred to in sub-section (1); and (ii) ending with the day on which the amount is paid. (7) Irrespective of the provisions contained in sub-section (3), the Principal Chief Commissioner or Chie....

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....be deemed to be in default as to the whole of the amount then outstanding; and (b) the other instalment or instalments shall be deemed to have been due on the same date as the instalment actually in default. (12) Where an assessee has presented an appeal under section 356 or 357, 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, till the time such appeal remains undisposed of. (13) Where an assessee has been assessed in respect of income arising outside India in a country, the laws of which prohibit ....