Penalty under section 221 for section 201(1a)

This query is : Resolved

Ashish Jain (Querist)
Follow

17 February 2012 One of my client has deposited TDS amount after a due date (maximum default involve is of 5 days).
He has paid the interest amount on the intimation raised by the department.
However now the officer issued penalty order under section 221 for default on payment of tax (being assessee in default under section 201(1)).
Please tell me what you do
Please also give me the reference of any Case law or section where i can get help
I am waiting for your response
Thanks in advance

CA Sumat Singhal

CA Sumat Singhal (Expert)
Follow

18 February 2012 Penalty : U/s. 221 of the Income-tax Act in such circumstances can be levied on such defaulter. Of course before levying any such penalty the defaulter will be given a reasonable opportunity of being heard and no penalty shall be charged, if such person/Principal Officer/Company satisfies the Assessing Officer that the failure to deduct the tax, or pay the same, was not without good and sufficient reason. The penalty leviable shall not exceed the amount of tax in arrears i.e. Tax which was deductible at source as per prescribed rate of tax so deducted but not paid to the credit of Central Government Account.