Deduction of tax at source.

(1) The tax payable in advance under this Act within the financial year next preceding the assessment year by any person in the employment of any Government, local authority, company, firm or other association of persons, shall be deducted in the manner prescribed by the principal officer thereon from any amount payable to such person on behalf of such Government, local authority, company, firm or other association of persons : Provided that the advance tax deductible or payable under this sub-section in respect of the total gross income of the previous year relating to the assessment year commencing from the 1st day of April, 1976 shall be deducted or paid in one installment by 30th day of March, 1976. (2) The principal officer making any deduction under sub-S. (1) shall submit to the assessing authority such returns and within such time as may be prescribed. (3) The assessing authority may take action, if he thinks fit in the manner provided by sub-S. (2) of S. 7 and by S. 8, in the case of any person in respect of whom he is satisfied that no return under sub-S. (2) has been furnished or a return furnished under that sub-section is inaccurate or deficient. (4) Where any principal officer fails to deduct any tax or after deducting fails to pay it as required by or under this Act, he shall without prejudice to any other consequences he may incur under this Act be deemed to be a person in default in respect of the tax not deducted or paid and all the provisions of S. 19 shall apply to him : Provided that the assessing authority shall not make a direction under sub-S. (2) of S. 19 for the recovery of any penalty from such person unless it is satisfied that such person has willfully failed to deduct and pay the tax.