Consequences of failure to deduct or pay or, collect or pay-Section 398(New)/Section 201, 206C(6A)

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....of Income Tax Act,1961. Section 398 prescribes the consequences of failure to deduct or collect tax, or after deduction or collection, failure to deposit such tax with the Central Government. It also provides relief in specified cases, liability to interest, limitation for passing orders and conditions for levy of penalty. Section 398(1) - Assessee in Default Section 398(1) provides that ....

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....the payee or buyer, licensee or lessee has- • furnished the return of income; • taken the relevant amount into account while computing income; • paid the tax due on such income; and • the deductor or collector furnishes a certificate from an accountant in the prescribed form. Accordingly, the liability as an assessee in default is avoided wher....

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....ction (2), interest at 1% shall be payable only up to the date of furnishing of the return of income by the payee or buyer, licensee or lessee. Clause (d): Interest Pursuant to Assessment Order Where an order is passed under sub-section (1), the interest determined therein shall be payable by the defaulting person. Section 398(4) - Charge on Assets Where tax deducted or collected is no....

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....tion 398(6) provides that the provisions of section 286(1) and section 286(3) shall apply while computing the limitation period specified in sub-section (5). Section 398(7) - Penalty No penalty under section 412 shall be levied unless the Assessing Officer is satisfied that the person has without good and sufficient reasons failed to deduct or collect and pay the tax. Accordingly, penalty....