Recovery for failure to collect tax by a withholding agent
Recovery order for failure to collect or deposit tax by a withholding agent [Section 161 (3)
As per sub-section (1) of section 161, where a withholding agent fails to collect or deduct tax or deposit tax, the withholding agent shall be personally liable to pay the amount of tax and the Commissioner may pass an order to that effect and proceed to recover the defaulted tax.
However, there was no provision to amend the order under sub-section (1) of section 161 in case where the order was prejudicial to revenue.
In Finance Act, 2019, a new sub-section has been added in section 161 which authorizes the Commissioner to amend the order under sub-section (1) of section 161 after making, or causing to be made such enquiries as deemed necessary if the Commissioner considers that the order under sub-section (1) of section 161 is erroneous in so far it is prejudicial to interest of revenue.