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The Tax PublishersIncome Tax--TDS
Scope of Reasonable Cause For Not Levying Penalty Under Section 221 For Non Payment of TDS
CA. Nisha Bhandari
Penalty under Section 221 is levied when there is default in payment of tax. However, such penalty is discretionary and can be waived of where reasonable cause exist for such default. The present write up deals with the scope of reasonable cause for not levying penalty under Section 221.
1. Penalty when leviable under Section 221
Under sub-section (1) of Section 221, the assessing officer is empowered to impose a penalty where an assessee is in default or is deemed to be in default in payment of tax. The said penalty is leviable in addition to the amount of the arrears and the amount of interest payable under Section 220(2). Further, in the case of a continuing default, the assessing officer may direct to pay further amount or amounts by way of penalty, so however, that the total amount of penalty does not exceed the amount of tax in arrears.
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