Amendment of section 201.
65. In section 201 of the Income-tax Act,
(a) in sub-section (1A), for the words "the quarterly statement for each quarter", the words "the statement" shall be substituted with effect from the 1st day of October, 2009;
(b) after sub-section (2), the following sub-sections shall be inserted with effect from the 1st day of April, 2010, namely:
''(3) No order shall be made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of
(i) two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed;
(ii) four years from the end of the financial year in which payment is made or credit is given, in any other case:
Provided that such order for a financial year commencing on or before the 1st day of April, 2007 may be passed at any time on or before the 31st day of March, 2011.
(4) The provisions of sub-clause (ii) of sub-section (3) of section 153 and of Explanation 1 to section 153 shall, so far as may, apply to the time limit prescribed in sub-section (3).''.
Notes on Clauses:
Clause 65 of the Bill seeks to amend section 201 of the Income tax Act which relates to consequences of failure to deduct or pay.
Vide clause 63 of the Bill proposes to amend section 200, specifying that any person deducting any sum on or after the 1st day of April, 2005 in accordance with the provisions of Chapter XVII-B, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed in each financial year and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed.
It is, therefore, proposed to make consequential amendment to section 201 of the Income-tax Act.
This amendment will take effect from 1st October, 2009.
Sub-clause (b) of clause 65 seeks to provide time limit for passing of order under sub-section (1) of section 201 in case of resident tax payers. It provides that no order shall be made under subsection(1) of section 201, deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax in the case of a person resident in India, at any time after the expiry of two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed. It further provides that in any other case such order shall not be made at any time after four years from the end of the financial year in which payment is made or credit is given. It further provides that such order for a financial year commencing on or before 1st day of April, 2007 may be passed at any time on or before the 31st day of March, 2011. The sub clause also provides that the provisions of sub-clause (ii) of sub-section (3) of section 153 and of Explanation 1 to section 153 shall, so far as may apply to the time limit prescribed in proposed sub-section (3) of section 201.
This amendment will take effect from 1st April, 2010.
