Section 10 in The Compulsory Deposit Scheme (Income Tax Payers) Act, 1974
10. Penalty for failure to make compulsory deposit.
(1)If, in relation to an assessment year referred to in sub- section (1) of section 3, any person who is liable to make a compulsory deposit [ being a person falling under clause (a) or clause (b) of subsection (3) of section 4]-(a)has without reasonable cause failed to make] the compulsory deposit within the time allowed under section 5, or(b)has made the compulsory deposit within such time but the deposit so made falls short of the requisite amount and there is no reasonable cause for making such short payment"] 1 the Income- tax Officer may], by order in writing, direct that such person shall pay, by way of penalty, a sum-i) which, in the case referred to in clause (a), shall be equal to twenty- five per cent. of the compulsory deposit which he is liable to make; and(ii)which, in the case referred to in clause (b), shall be equal to twenty- five per cent. of the amount by which the compulsory deposit made by him falls short of the requisite amount.(2)If, in relation to an assessment year referred to in sub- section (1) of section 3, the correct income of a person falling under clause (c) of sub- section (3) of section 4, exceeds fifteen thousand rupees and such person-(a)has, without reasonable cause, failed to make"] the compulsory deposit within the time allowed under section 5, or(b)has made the compulsory deposit within such time on the basis of his own estimate but the deposit so made falls short of] seventy- five per cent. of the compulsory deposit which he would have been liable to make on the basis of his correct income and there is no reasonable cause for making such short payment"];the Income- tax Officer may"] by order in writing, direct that such person shall pay by way of penalty a sum-(i)which, in the case referred to in clause (a), shall be equal to twenty- five per cent. of the compulsory deposit calculated with reference to his correct income; and(ii)which, in the case referred to in clause (b), shall be equal to twenty- five per cent. of the amount by which the compulsory deposit made by him falls short of the compulsory deposit calculated with reference to his correct income.Explanation,- In this sub- section," correct income" has the meaning assigned to it in sub- section (2) of section 6.(3)No order imposing a penalty under this section shall be made against any person unless such person has been heard or has been given a reasonable opportunity of being heard.
