Income Tax Act, 2025
Section 4: Ins. by Act 10 of 2000, s. 62 (w.e.f. 12000).
4. Ins. by Act 10 of 2000, s. 62 (w.e.f. 12000).
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221. Penalty payable when tax in default.—1[(1) When an assessee is in default or is deemed to be
in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of
interest payable under sub-section (2) of section 220, be liable, by way of penalty, to pay such amount as
the 2[Assessing Officer] may direct, and in the case of a continuing default, such further amount or
amounts as the 2[Assessing Officer] may, from time to time, direct, so, however, that the total amount of
penalty does not exceed the amount of tax in arrears:
Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of
being heard:
3[Provided further that where the assessee proves to the satisfaction of the 2[Assessing Officer] that
the default was for good and sufficient reasons, no penalty shall be levied under this section.]]
4[Explanation.—For the removal of doubt, it is hereby declared that an assessee shall not cease to be
liable to any penalty under this sub-section merely by reason of the fact that before the levy of such
penalty he has paid the tax.]
(2) Where as a result of any final order the amount of tax, with respect to the default in the payment
of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the
amount of penalty paid shall be refunded.
222. Certificate to Tax Recovery Officer.—(1) 5[When an assessee is in default or is deemed to be
in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a
statement in the prescribed formspecifying the amount of arrears due from the assessee (such statement
being hereafter in this Chapter and in the Second Schedule referred to as “certificate”) and shall proceed
to recover from such assessee the amount specified in the certificate by one or more of the modes
mentioned below, in accordance with the rules laid down in the Second Schedule—]
(a) attachment and sale of the assessee’s movable property;
(b) attachment and sale of the assessee’s immovable property;
(c) arrest of the assessee and his detention in prison;
(d) appointing a receiver for the management of the assessee’s movable and immovable
properties.
6[Explanation.—For the purposes of this sub-section, the assessee’s movable or immovable property
shall include any property which has been transferred, directly or indirectly on or after the 1st day of
June, 1973, by the assessee to his spouse or minor child or son’s wife or son’s minor child, otherwise than
for adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid;
and so far as the movable or immovable property so transferred to his minor child or his son’s minor child
is concerned, it shall, even after the date of attainment of majority by such minor child or son’s minor
child, as the case may be, continue to be included in the assessee’s movable or immovable property for
recovering any arrears due from the assessee in respect of any period prior to such date.]
7[(2) The Tax Recovery Officer may take action under sub-section (1), notwithstanding that
proceedings for recovery of the arrears by any other mode have been taken.]
When an assessee is in default or is deemed to be
in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of
interest payable under sub-section
of section 220, be liable, by way of penalty, to pay such amount as
the 2[Assessing Officer] may direct, and in the case of a continuing default, such further amount or
amounts as the 2[Assessing Officer] may, from time to time, direct, so, however, that the total amount of
penalty does not exceed the amount of tax in arrears:
Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of
being heard:
3[Provided further that where the assessee proves to the satisfaction of the 2[Assessing Officer] that
the default was for good and sufficient reasons, no penalty shall be levied under this section.]]
4[Explanation.—For the removal of doubt, it is hereby declared that an assessee shall not cease to be
liable to any penalty under this sub-section merely by reason of the fact that before the levy of such
penalty he has paid the tax.]
Where as a result of any final order the amount of tax, with respect to the default in the payment
of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the
amount of penalty paid shall be refunded.
222. Certificate to Tax Recovery Officer.—
5[When an assessee is in default or is deemed to be
in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a
statement in the prescribed formspecifying the amount of arrears due from the assessee (such statement
being hereafter in this Chapter and in the Second Schedule referred to as “certificate”) and shall proceed
to recover from such assessee the amount specified in the certificate by one or more of the modes
mentioned below, in accordance with the rules laid down in the Second Schedule—]
attachment and sale of the assessee’s movable property;
attachment and sale of the assessee’s immovable property;
arrest of the assessee and his detention in prison;
appointing a receiver for the management of the assessee’s movable and immovable
properties.
6[Explanation.—For the purposes of this sub-section, the assessee’s movable or immovable property
shall include any property which has been transferred, directly or indirectly on or after the 1st day of
June, 1973, by the assessee to his spouse or minor child or son’s wife or son’s minor child, otherwise than
for adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid;
and so far as the movable or immovable property so transferred to his minor child or his son’s minor child
is concerned, it shall, even after the date of attainment of majority by such minor child or son’s minor
child, as the case may be, continue to be included in the assessee’s movable or immovable property for
recovering any arrears due from the assessee in respect of any period prior to such date.]
7[
The Tax Recovery Officer may take action under sub-section