Amendment of section 201.
77. In section 201 of the Income-tax Act,—
(A) with effect from the 1st day of July, 2012,—
(i) in sub-section (1),—
(a) before the proviso, the following proviso shall be inserted, namely:—
“Provided that any person, including the principal officer of a company, who 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 shall not be deemed to be an assessee in default in respect of such tax if such resident—-
(i) has furnished his return of income under section 139;
(ii) has taken into account such sum for computing income in such return of income; and
(iii) 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:”;
(b) in the proviso, for the words “Provided that”, the words “Provided further that” shall be substituted;
(ii) after sub-section (1A), the following proviso shall be inserted, namely:—
“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 of 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.”;
(B) in sub-section (3), in clause (ii), for the words “four years”, the words “six years” shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2010;
(C) after sub-section (4), the following Explanation shall be inserted with effect from the 1st day of July, 2012, namely:—
“Explanation.—For the purposes of this section, the expression “accountant” shall have the meaning assigned to it in the Explanation to sub-section (2) of section 288.”.
Notes on Clauses:
Clause 77 of the Bill seeks to amend section 201 of the Income-tax Act relating to consequences of failure to deduct or pay.
It is proposed to insert a new proviso in sub-section (1) of the aforesaid section 201 so as to provide that any person, including the principal officer of a company, who 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 shall not be deemed to be an assessee in default in respect of such tax if such resident --
(i) has furnished his return of income under section 139;
(ii) has taken into account such sum for computing income in such return of income; and
(iii) 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.
It is further proposed to insert a new proviso to sub-section (1A) of the aforesaid section so as to provide 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 of 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.
This amendment will take effect from 1st July, 2012.
The existing provisions of sub-section (3) of the aforesaid section 201 provide that no order shall be made under sub-section (1) of the said section 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 two years from the end of the financial year in a case in which the statement referred to in section 200 has been filed, and in any other case four years from the end of the financial year in which payment is made or credit is given.
It is proposed to amend clause (ii) of the aforesaid sub-sectionso as to extend the period of four years to six years.
This amendment will take effect retrospectively from 1st April, 2010.
It is also proposed to insert an Explanation after sub-section (4) of the aforesaid section so as to define the expression “accountant”.
This amendment will take effect from 1st July, 2012.
