If the deductor fails to deduct TDS or fails to pay TDS then he shall be considered as Assesse in default u/s 220 & 221 for interest & penalty.
This section applies only in case of default in PAYMENT and not delay in PAYMENT.
Interest u/s 201(1A) shall not be levied where defaulter is required to pay interest under this section.1st Proviso to this section states that if the defaulter fails to deduct TDS or fails to pay TDS and after that recipent/payee files his income tax return by taking into consideration the amount on which the TDS was not deducted and thus pays the tax on such income, then in this case Deductor cannot be treated as Assess in default as the amount has reached the govt. through the Recipent. But he has to pay the interest u/s 201(1A) in this case.
If TDS return has been filed, then AO can deem a person to be assesee in default under this section till 2years from the end of the FY in which such return is filed. And if No TDS return is filed then 6 years from the end of the FY in which payment is made on which default has been done.
This section applies only in case of default in PAYMENT and not delay in PAYMENT.
Interest u/s 201(1A) shall not be levied where defaulter is required to pay interest under this section.1st Proviso to this section states that if the defaulter fails to deduct TDS or fails to pay TDS and after that recipent/payee files his income tax return by taking into consideration the amount on which the TDS was not deducted and thus pays the tax on such income, then in this case Deductor cannot be treated as Assess in default as the amount has reached the govt. through the Recipent. But he has to pay the interest u/s 201(1A) in this case.
If TDS return has been filed, then AO can deem a person to be assesee in default under this section till 2years from the end of the FY in which such return is filed. And if No TDS return is filed then 6 years from the end of the FY in which payment is made on which default has been done.
