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vipul (Querist)
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11 August 2014 Penalty ? if a person makes any default in payment of tax he may invite penalty u/s 221 equal to the amount of tax deductible but not deducted or not paid. However the penalty provisions will not apply If the payee has furnished his return and paid the due taxes and the deductor furnished a certificate of an accountant. Here what is certificate of accountant?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 August 2014 are you sure section 221 states so?

section 221 as it stand today is as provided at the link below. I dont think there is any such provision for non-applicability of penalty:

http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=e08d0f23-7bfd-444f-bf9b-f0c2e5ea5007&rdb=sec&yr=303d6389-2d18-4432-bdbf-b74822b1a6df&sec=221&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws

Rupesh Jain

Rupesh Jain (Expert)
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12 August 2014 section 221 as follows

Penalty payable when tax in default.

30221. 31[(1) When an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears32 and the amount of interest payable under sub-section (2) of section 220, be liable, by way of penalty, to pay such amount as the 33[Assessing] Officer may direct34, and in the case of a continuing default, such further amount or amounts as the 35[Assessing] Officer may, from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears :

Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard :

36[Provided further that where the assessee proves to the satisfaction of the 37[Assessing] Officer that the default was for good and sufficient reasons38, no penalty shall be levied under this section.]

39[Explanation.—For the removal of doubt, it is hereby declared that an assessee shall not cease to be liable to any penalty under this sub-section merely by reason of the fact that before the levy of such penalty he has paid the tax.]

(2) Where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded.

in above there is no certificate required.

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