Section 221(1) of the Income Tax Act
Income-tax Act, 2025: s.412
Section 221(1) falls under section 221 of the Income-tax Act, 1961, which corresponds to section 412 (Penalty payable when tax in default) of the Income-tax Act, 2025.
Read section 412 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 221(1) is Kartik Vijaysinh Sonavano v. DCIT (132 Taxmann.com 293), cited in 33 of the 159 judgments on BharatTax that turn on this section.
Leading authorities on Section 221(1)
The tax department cannot speculate to deny the benefit of tax deducted at source by the employer to the petitioner.
An assessee cannot be denied the credit of tax deducted at source (TDS) if they produce Form 16A, and any demand notice issued under Section 221(1) for non-payment of tax, when TDS credit is due, cannot be sustained.
Section 205 of the Income Tax Act prevents the tax department from demanding tax from an assessee who has already suffered TDS when the liability has shifted to another entity, such as a liquidator.