Penalty for Assessee-in-Default
Nature of Default
Penalty is attracted if an assessee fails to pay tax due and is treated as an assessee-in-default. The liability to pay penalty persists even if the tax is paid before the levy of penalty. However, penalty shall not be imposed for default in payment of penalties imposed under Chapter XXI (Sections 270A to 275).
Quantum of Penalty
- The Assessing Officer may impose a penalty not exceeding the amount of tax in arrears.
- Before levying a penalty, the person must be given an opportunity of being heard.
- Penalty shall not be levied if the assessee proves reasonable cause for the failure.