Income Tax Act 1947 · 2020 Revised Edition · Part 12 · Deduction of Tax at Source
45AA. Tax deemed withheld and recoverable from person in breach of condition imposed under section 13(4)
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Subsection (1A) applies where a notification has been made under section 13(4) to exempt from tax (wholly or in part) payments made by a person to a non‑resident person under section 45 or 45A, and —
the exemption is on the basis that the firstmentioned person or a particular matter is approved by the Minister, an authorised body or a person appointed by the Minister under a section specified in the Fourth Schedule, and the approval is revoked under section 105R after any such payment has been made; or
the firstmentioned person contravenes any condition imposed by the Minister under the notification (whether a condition precedent or a condition subsequent) after any such payment has been made.
The amount of tax which, but for —
in the case of subsection (1)(a) — the approval of the firstmentioned person or the matter; or
in the case of subsection (1)(b) — the notification,would have been deductible by the firstmentioned person from that payment —
is deemed to have been deducted from that payment;
is a debt due from the firstmentioned person to the Government; and
is recoverable in the manner provided in section 89.
The amount recoverable under subsection (1A) is payable at the place stated in a notice served by the Comptroller on the person within one month after the service of the notice.
Comptroller
“Comptroller” means the Comptroller of Income Tax appointed under section 3(1) and includes, for all purposes of this Act except the exercise of the powers conferred upon the Comptroller by sections 34F(9), 37L(7), 37M(5), 67(1)(a), 95, 96, 96A and 101, a Deputy Comptroller or an Assistant Comptroller so appointed;
The Comptroller may, in his or her discretion and subject to such conditions (including the imposition of interest) as the Comptroller may impose, extend the time limit within which payment under subsection (2) is to be made.
If the amount recoverable under subsection (1A) is not paid to the Comptroller —
within the period referred to in subsection (2) or such further period as may be allowed under subsection (3), a sum equal to 5% of such amount is payable; and
within 30 days after the time specified in paragraph (a), an additional penalty of 1% of such amount is payable for each completed month that such amount remains unpaid, but the total additional penalty under this paragraph must not exceed 15% of such amount.
The penalty is recoverable in the manner provided in section 89.
The Comptroller may for any good cause remit the whole or any part of the penalty payable under subsection (4).
The Minister may, subject to such conditions as the Minister may determine, remit the whole or any part of the amount recoverable under subsection (1A).
If any condition mentioned in subsection (7) is breached, then the amount remitted is a debt due from the person granted the remission to the Government and is recoverable in the manner provided by section 89; and subsections (2) to (6) apply accordingly.