For failure to deduct tax at source where one should have as well as for failure to deposit the tax deducted at source with the treasury within the prescribed time, interest at 1 per cent per month or part thereof is payable in terms of Section 201(1A). In addition, such failure also gives rise to presumption of assessee being in default attracting a discretionary penalty not exceeding the tax in arrears in terms of Section 221 read with Section 201(1). To be sure, for good and sufficient reasons, the failure shall be condoned and interest as well as penalty as above shall not be imposed
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