Consequences of failure to deduct or pay withholding tax Section 201– Extension of benefit in respect of payments made to non-residents
Where in case any person fails to deduct or pay the whole or any part of the tax on the sum paid or on the sum credited to the account of a person, he shall be deemed to be an assessee in default in respect of such tax.
However proviso to S. 201 states that a person shall not be considered to be an assessee in default in respect of such taxes, if the resident has furnished his return of income under Section 139, has taken into account such sum for computing income in the return of income, has paid the tax due on such income in the return of income and the person has obtained a certificate from an accountant in the prescribed form.
The benefit of the first proviso has only been provided to a person in respect of payments made to resident and the conditions mentioned in the first proviso have been fulfilled.
With a view bring more relief to assessee, the benefit of the said proviso shall also be extended in respect of payments made by persons to non- residents