If by mistake, I exceed the contribution limit to my RRSP, can I withdraw it from my RRSP, to avoid paying penalty? e.g Let us say my RRSP room is 18k, but I contributed 22k, so any contribution in excess of 2k, will be taxed at 1% per month. To avoid this, should I withdraw the excess money from my RRSP?
Overcontributions made after the calendar year are not usually a problem. This is because while contributions made in Jan and Feb can be counted towards the previous year, they do not have to be. This appears to be what has happened in your case.
If you had an RRSP limit of $18,000 for 2015, and in Jan 2016 you contributed $22,000 to your RRSP, then it is perfectly legal to claim $18,000 of that in 2015 and $4000 in 2016. The extra $4000 is never counted against your 2015 limit and so is not an overcontribution.
If your 2016 limit is going to be less than $4000 then you will eventually have an overcontribution problem in 2016, and if you think that's likely you should sort this out now. But for most people that's pretty unlikely.
Intuit has a pretty good write-up on this subject.
As you noted, you are allowed to exceed your limit by $2000 (though this overcontribution is not tax-deductible). Also, your contribution room accumulates. So, you may be able to contribute $18k for the 2015 tax year, but if you have unused space from previous tax years, you can make use of that, too.
If you discover you have indeed overcontributed, you may be eligible for a waiver. The CRA looks kindly on honest mistakes. Consider talking to a tax accountant, and then calling up the CRA and discussing it with them.
If you are not eligible for a waiver on the excess, you need the form T1-OVP. This lets you declare the excess contributions and pay the tax on it. You also need to withdraw the excess from your RRSP and may need to provide evidence of this withdrawal.
Again, strongly consider talking to an accountant and to the CRA (who are surprisingly polite and helpful on the phone). 1% penalty per month can quickly get expensive and now's the time to ensure you have your ducks in a row.