- [(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 ] [Substituted by Act 42 of 1970, Section 38, for sub-Section (1) (w.e.f. 1.4.1971).][Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).] [may direct, and in the case of a continuing default, such further amount or amounts as the] [Substituted by Act 42 of 1970, Section 38, for sub-Section (1) (w.e.f. 1.4.1971).][Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).][may, from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears:] [Substituted by Act 42 of 1970, Section 38, for sub-Section (1) (w.e.f. 1.4.1971).]Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard:[Provided further that where the assessee proves to the satisfaction of the ] [Substituted by Act 46 of 1986, Section 14, for the second proviso (w.e.f. 10.9.1986).][Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).][that the default was for good and sufficient reasons, no penalty shall be levied under this section.] [Substituted by Act 46 of 1986, Section 14, for the second proviso (w.e.f. 10.9.1986).][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.] [ Inserted by Act 41 of 1975, Section 53 (w.e.f. 1.10.1975).](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.
