Section - 221

Penalty payable when tax in default

Penalty payable when tax in default.

221. ²[(1) When an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under sub-section (2) of section 220, be liable, by way of penalty, to pay such amount as the Income-tax Officer may direct, and in case of a continuing default, such further amount or amounts as the Income-tax Officer may, from time to time, direct, so, 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 Income-tax Officer is satisfied that the default was for good and sufficient reasons, no penalty shall be levied under this section.]

* * *

(2) Where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded.

2. Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.

* Explanations to sub-sec. (1) of sec. 221 and sub-sec. (1) of sec. 222 are proposed to be insert-ed by the Taxation Laws (Amendment) Bill, 1973, as reported by the Select Committee. For text see els. 53 and 54 of the Bill.

[As amended by the Finance Act, 1975 and by the Finance Act, 1974]

Section 221

Penalty payable when tax in default

Footnotes