Refer to NOTIFICATION NO 11/2009, Dated: January 21, 2009 of CBDT 15 July, 15 October, 15 January And 15 May Consequences in the event of default:- As per section 203, of I.T.Act, if a person responsible for deduction of tax at source fails to deduct the appropriate tax or , after making the due deduction fails to deposit it to in to the government treasury , he shall deemed to be an assessee in default and shall be liable to:- (1) payment of the whole or any part of the tax as due; (2) interest at the rate of 1% per month or part of the month on the tax from the date on such tax was deductible to the daTE on which such tax is actually paid; (3) penalty which may be as high as the amount of tax in default , however, no penalty shall be charged under section 221 frm such person unless the assessing officer is satisfied that such person has , without good and sufficient reason , fails to deduct and pay the tax , and (4) prosecution – where the amount of tax which the responsible person has failed to deduct or pay exceeds rs. 1,00,000.00(one lakhs) he shall be punishable with rigorous imprisonment for for a term not less than 6 months but which may be extend to 7 years and with fine. In any other case , he shall be punished with a rigorous imprisomment of a term of not less than 3 months but which may be extended to 3 years and with fine.
Where the amount of tax has not been deposited after it is deducted , the amount of tax together with the interest shall be charge upon all the assests of person.
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