interest u/s 201(1A) and 220(2)

[ketanvyas1975]

Can both interest u/s 201(1A) and 220(2) charge on the same amount for the same period in respect of order u/s 201(1)? My understanding is that interest u/s 201(1A) will run upto the order of 201(1) and thereafter interest u/s 220(2) will commence. However, the A.O. is not agreeing to this.

There is a direct provision in respect of intimation u/s 200A by virtue of section 220(2B) w.e.f. 1-7-2012.

is there any reference/circular/judgment in the context of order u/s 201? Please provide the same.

[pawansingla]

kindly ask AO to read provisions of sec. 220(2). For example, 234B & 220(2) cannot run concurrently.

[ketanvyas1975]

Pawanji,

can you please elaborate the matter?

I referred to the provisions of section 220 but the A.O. says it only applies to intimations u/s 200A.

As per the A.O., CBDT instruction No. 1944 permits such double charging of interest.

Kindly advise

[pawansingla]

Clarification regarding charging of interest under section 201(1A) and under section 220(2)
1. The Central Board of Direct Taxes have received several representations seeking clarification about the simultaneous charging of interest under section 201(1A) and under section 220(2) of the Income-tax Act, 1961.
2. After due consideration, it is hereby clarified that for non-deduction of tax at source or failure to pay the tax after deducting the same, interest under section 201(1A) is chargeable. If the tax and/or interest is not paid within the stipulated time, then interest under section 220(2) also becomes chargeable.
Instruction : No. 1944, dated 27-8-1997.