From Mary McCarthy’s The Stones of Florence:
when a prelate criticized the nude figures in ‘The Last Judgment’, Michelangelo at once added him to the fresco, showing him in hell, wearing horns, with a serpent twisted around his loins, and when the prelate complained to the pope (Paul III), the pope replied: ‘Had the painter sent you to Purgatory, I would have used my best efforts to get you released, but I exercise no influence in hell; ubi nulla est redemptio.’
The major source of the story is Giorgio Vasari’s Life of Michelangelo in his The Lives of the Most Excellent Painters, Sculptors, and Architects.
Michelagnolo had already carried to completion more than three-fourths of the work, when Pope Paul went to see it. And Messer Biagio da Cesena, the master of ceremonies, a person of great propriety, who was in the chapel with the Pope, being asked what he thought of it, said that it was a very disgraceful thing to have made in so honourable a place all those nude figures showing their nakedness so shamelessly, and that it was a work not for the chapel of a Pope, but for a bagnio or tavern. Michelagnolo was displeased at this, and, wishing to revenge himself, as soon as Biagio had departed he portrayed him from life, without having him before his eyes at all, in the figure of Minos with a great serpent twisted round the legs, among a heap of Devils in Hell; nor was Messer Biagio’s pleading with the Pope and with Michelagnolo to have it removed of any avail, for it was left there in memory of the occasion, and it is still to be seen at the present day.
But I think the Pope’s witty reply comes from another contemporary writer, Lodovico Domenichi – whose account I haven’t tried digging up.