When any sum is payable as a result of any order passed under the Act, then the Assessing Officer shall serve upon the assessee a notice of demand U/s 156 specifying the sum so payable.
Whereas Section 143 (1) is itself deemed as notice of demand & demand notice U/s 156 need not to be attached with notice U/s 143 (1).
If the amount specified in any notice of demand under section 156 is not paid within 30 days of the service of notice, then he shall be deemed to be an ASSEESSEE IN DEFAULT for the amount remaining unpaid. The assessee shall be liable to pay simple interest U/s 220 at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid. In addition to interest U/s 220, he shall be liable to pay a penalty U/s 221 which the Assessing Officer may levy. However such penalty shall not exceed the amount in arrears.
As per the Finance Act, 2012 Section 201(1) shall apply if assessee does not deduct whole or part of TDS. Also this section applies where assessee after deducting TDS fails to pay the whole or part of TDS. Section 201(1) shall not apply if there is a delay in deduction or delay in payment of TDS.
Provided that any person who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid/credited to a resident shall not be deemed to be an assessee in default in respect of such tax if such resident-
1. has furnished his return of income under section 139;
2. has taken into account such sum for computing income in such return of income; and
3. has paid the tax due on the income declared by him in such return of income,
and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed.
Finance Act, 2012 also clarifies that interest U/s 201(1A) shall be levied even where proviso to section 201(1) applies.
In addition to above, the employer who is responsible to pay tax on non monetary perquisites provided to the employee but fails to pay whole or any part of the tax on such non monetary benefit.
Author Shrawani Trivedi can be reached at trivedishrawani9@gmail.com
This article needs correction.
Clause 1A provisio states
“Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident but is not deemed to be an assessee in default under the first proviso to sub-section (1), the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such resident.”
Thus, The Finance Act, 2012 also clarifies that interest U/s 201 (1A) shall be levied even where proviso to section 201 (1) applies.