Amendment of section 201
60. In section 201 of the Income-tax Act, for sub-section (3), the following sub-section shall be substituted with effect from the 1st day of October, 2014, 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 seven years from the end of the financial year in which payment is made or credit is given.”.
Notes on Clauses:
Clause 60 of the Bill seeks to amend section 201 of the Income-tax Act relating to consequences of failure to deduct or pay.
The existing provisions contained in sub-section (3) of section 201 provide that 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 two years from the end of the financial year in a case where the statement referred to in section 200 has been filed, and in any other case six years from the end of the financial year in which payment is made or credit is given.
It is proposed to substitute sub-section (3) of section 201 so as to 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 seven years from the end of the financial year in which payment is made or credit is given.
This amendment will take effect from 1st October, 2014.
