Section 278AA of ITA, 1961 : Section 278Aa: Punishment Not To Be Imposed In Certain Cases

Explanation using Example

Imagine a business owner, John, who failed to deposit the TDS (Tax Deducted at Source) within the stipulated time. The Income-tax Act, under sections 276A, 276AB, and 276B, provides for punishment for such an offence. However, due to a natural calamity, John's business records were destroyed, and he could not comply with the tax deposit deadlines. Under Section 278AA of The Income-tax Act, 1961, if John can demonstrate that the natural calamity was a 'reasonable cause' for the delay in depositing TDS, he may not be punished for this failure to comply with the tax provisions.