Answer

1. F

   Facts

   A notice of demand under Sec 156 is the formal bill for tax, interest or penalty that an order has found payable. It is not a new case by itself. It follows an order such as an intimation, an assessment or a penalty order.

2. P

   Provisions and law

   • Sec 156, Income-tax Act 1961 (now Sec 289)When tax, interest, penalty or other sum is payable after an order, the officer serves a notice of demand.
   • Sec 220, Income-tax Act 1961A demand is payable within 30 days of service of the notice of demand; simple interest of 1% a month runs after that; the officer may allow more time or instalments, and may treat you as not in default while an appeal is pending (2025 Act number to be confirmed).
3. A

   Analysis

   For AY 2026-27 and earlier years the demand is under the 1961 Act, so it cites Sec 156, now Sec 289 of the 2025 Act. Read the order that came with it to see why the tax is payable. If the demand is ₹46,300 after a scrutiny order adding ₹1,50,000 of income, the question is whether that addition is right. The notice also gives the date by which to pay, usually 30 days.

4. C

   Conclusion

   1. 1Find the order that the demand notice is attached to.
   2. 2Note the amount, assessment year and Demand Reference Number.
   3. 3Check the due date, normally 30 days from service.
   4. 4Decide whether to pay, rectify, or appeal.
   5. 5Respond on the portal before the due date.

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