CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 218 - When Assessee Deemed to be in Default
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Live. The deemed-default provision for advance tax demanded by an Assessing Officer's order.
Finance Act, 2026: No amendment.
Mechanism: An assessee who fails to pay advance tax required by an order under section 210(3)/(4) on the section 211 date, and does not invoke section 210(5)/(6), is deemed to be in default - opening the recovery machinery (sections 220-232) and penalty under section 221.
Litigation profile: Narrow and procedural; tied to the Assessing Officer's order. Sparse independent authority; candour rule observed.
A. SECTION COMMENTARY
Section 218 fixes the point at which an assessee becomes 'deemed to be in default' in respect of advance tax. It operates only in relation to advance tax required to be paid in pursuance of an order of the Assessing Officer under section 210(3) or (4): if the assessee does not pay an instalment so required on the date specified in section 211(1), and does not (where he claims a lower liability) send the intimation under section 210(5), and does not (where his liability is higher) pay under section 210(6), he is deemed to be an assessee in default in respect of that instalment or instalments. The deeming is the gateway to recovery: an assessee in default is exposed to the recovery machinery of sections 220 to 232 and to penalty under section 221.
Confined to the Assessing Officer's order
A point easily missed is that section 218 fastens default only where advance tax is payable under an Assessing Officer's order (section 210(3)/(4)). Where the assessee is paying of his own accord under section 210(1), a failure to pay an instalment does not make him an assessee in default under section 218; instead, the consequence is compensatory interest under sections 234B/234C. Section 218 thus has a narrow operation - it is the default-and-recovery counterpart of the Assessing Officer's residual power to demand advance tax, and it is invoked only in those comparatively rare cases.
Consequences of the deeming
Once an assessee is deemed in default under section 218, the advance tax demanded becomes recoverable as if it were tax in default: the Tax Recovery Officer's powers under the Second Schedule, the interest under section 220(2) (where applicable to the post-assessment demand), and the penalty under section 221 may follow. The section is procedural and is rarely the subject of independent merits litigation; disputes, when they arise, concern the validity of the underlying section 210(3)/(4) order and notice of demand rather than the deeming in section 218 itself.
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
218. If any assessee does not pay on the date specified in sub-section (1) of section 211, any instalment of the advance tax that he is required to pay by an order of the Assessing Officer under sub-section (3) or sub-section (4) of section 210 and does not, on or before the date on which any such instalment as is not paid becomes due, send to the Assessing Officer an intimation under sub-section (5) of section 210 or does not pay on the basis of his estimate of his current income the advance tax payable by him under sub-section
(6) of section 210, he shall be deemed to be an assessee in default in respect of such instalment or instalments.
C. AUTHORITIES
Section 218 is a narrow, procedural default provision tied to an Assessing Officer's order under section 210(3)/(4); independent merits authority is sparse and the candour rule is observed. The authorities below fix the scheme of which it forms part. All citations have been web-verified.
Cluster 1 - Default, recovery and the limits of the deeming
Section 218 is invoked only where advance tax is demanded by an Assessing Officer's order; self-payment defaults attract interest, not section 218 default. Direct authority is sparse.
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Relevance: Explains the scheme of advance-tax payment and credit (sections 207-219) within which section 218 operates, and the place of the Assessing Officer's order under section 210 that section 218 enforces.
Use: Locates section 218 in the collection scheme of the Chapter.
CIT v. Anjum M. H. Ghaswala (2001) 252 ITR 1 (SC) [Constitution Bench]
Relevance: Confirms that for non-payment of advance tax of one's own accord the consequence is mandatory interest under sections 234B/234C - the route distinct from the section 218 'deemed default' that attends an Assessing Officer's order.
Use: Marks the boundary between the interest consequence (self-payment) and the deemed-default consequence (order-based payment).
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 218 - When Assessee Deemed to be in Default
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Live. The deemed-default provision for advance tax demanded by an Assessing Officer's order.
Finance Act, 2026: No amendment.
Mechanism: An assessee who fails to pay advance tax required by an order under section 210(3)/(4) on the section 211 date, and does not invoke section 210(5)/(6), is deemed to be in default - opening the recovery machinery (sections 220-232) and penalty under section 221.
Litigation profile: Narrow and procedural; tied to the Assessing Officer's order. Sparse independent authority; candour rule observed.
A. SECTION COMMENTARY
Section 218 fixes the point at which an assessee becomes 'deemed to be in default' in respect of advance tax. It operates only in relation to advance tax required to be paid in pursuance of an order of the Assessing Officer under section 210(3) or (4): if the assessee does not pay an instalment so required on the date specified in section 211(1), and does not (where he claims a lower liability) send the intimation under section 210(5), and does not (where his liability is higher) pay under section 210(6), he is deemed to be an assessee in default in respect of that instalment or instalments. The deeming is the gateway to recovery: an assessee in default is exposed to the recovery machinery of sections 220 to 232 and to penalty under section 221.
Confined to the Assessing Officer's order
A point easily missed is that section 218 fastens default only where advance tax is payable under an Assessing Officer's order (section 210(3)/(4)). Where the assessee is paying of his own accord under section 210(1), a failure to pay an instalment does not make him an assessee in default under section 218; instead, the consequence is compensatory interest under sections 234B/234C. Section 218 thus has a narrow operation - it is the default-and-recovery counterpart of the Assessing Officer's residual power to demand advance tax, and it is invoked only in those comparatively rare cases.
Consequences of the deeming
Once an assessee is deemed in default under section 218, the advance tax demanded becomes recoverable as if it were tax in default: the Tax Recovery Officer's powers under the Second Schedule, the interest under section 220(2) (where applicable to the post-assessment demand), and the penalty under section 221 may follow. The section is procedural and is rarely the subject of independent merits litigation; disputes, when they arise, concern the validity of the underlying section 210(3)/(4) order and notice of demand rather than the deeming in section 218 itself.
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
218. If any assessee does not pay on the date specified in sub-section (1) of section 211, any instalment of the advance tax that he is required to pay by an order of the Assessing Officer under sub-section (3) or sub-section (4) of section 210 and does not, on or before the date on which any such instalment as is not paid becomes due, send to the Assessing Officer an intimation under sub-section (5) of section 210 or does not pay on the basis of his estimate of his current income the advance tax payable by him under sub-section
(6) of section 210, he shall be deemed to be an assessee in default in respect of such instalment or instalments.
C. AUTHORITIES
Section 218 is a narrow, procedural default provision tied to an Assessing Officer's order under section 210(3)/(4); independent merits authority is sparse and the candour rule is observed. The authorities below fix the scheme of which it forms part. All citations have been web-verified.
Cluster 1 - Default, recovery and the limits of the deeming
Section 218 is invoked only where advance tax is demanded by an Assessing Officer's order; self-payment defaults attract interest, not section 218 default. Direct authority is sparse.
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Relevance: Explains the scheme of advance-tax payment and credit (sections 207-219) within which section 218 operates, and the place of the Assessing Officer's order under section 210 that section 218 enforces.
Use: Locates section 218 in the collection scheme of the Chapter.
CIT v. Anjum M. H. Ghaswala (2001) 252 ITR 1 (SC) [Constitution Bench]
Relevance: Confirms that for non-payment of advance tax of one's own accord the consequence is mandatory interest under sections 234B/234C - the route distinct from the section 218 'deemed default' that attends an Assessing Officer's order.
Use: Marks the boundary between the interest consequence (self-payment) and the deemed-default consequence (order-based payment).
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.