TDS

This query is : Resolved

CA Anurag Shukla (Querist)
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31 July 2010 HI I HAVE AN QUERY REGARDING SEC.201(1)& 201(1A)THAT IF AN EMPLOYER HAS NOT DEDUCTED TDS ACTUALLY HE HAS COMMITTED MISTAKE IN ASSESING THE INCOME TAX OF ITS EMPLOYEES REGARDING ONE ALLOWANCE WHICH RESULTED SHORT PAYMENT OF TDS HOWEVER THE EMPLOYEES HAVE DEPOSITED TAX BY SELF ASSESSMENT BUT THE AO HAS DEMANDED PENALTY U/S 201(1)& 201(1A)ON THE EMPLOYER FOR SHORT PAYMENT AND TREATED HIM AS AN ASSESSEE IN DEFAULT AND RAISED DEMAND.
SO PLEASE OFFER YOUR VIEWS THAT COULD EMPLOYER BE RESCUED FROM IT AND IF POSSIBLE THEN HOW IS THERE ANY CASE LAW OR NOTIFICATION OR CIRCULAR IN THIS BEHALF.
ANURAG SHUKLA

CA Kapil B Gupta

CA Kapil B Gupta (Expert)
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31 July 2010 When an assessee is in default in making a payment of tax, he shall be liable, by way of penalty, 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.

Provided further that where the assessee proves to the satisfaction to the Assessing Officer that the default was for good and sufficient reasons, no penalty shall be levied under this section.