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“assessee in default”

TDS / TCSSection 201Section 2011,654 judgments

The decision most relied on for assessee in default is Rashmikant Kundalia v. Union of India (54 Taxmann.com 200), cited in 702 judgments on BharatTax.

Leading authorities on assessee in default

Rashmikant Kundalia v. Union of India
54 Taxmann.com 200 · 2015 · High Court
702
citing judgments

Section 234E, levying late fees for delayed filing of TDS statements under section 200(3), is constitutionally valid and constitutes a compensatory fee, not a punitive penalty. Before treating any person as an assessee-in-default, an opportunity of being heard must be provided.

Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT
293 ITR 226 · 2007 · Supreme Court
576
citing judgments

The deductor cannot be treated as an assessee-in-default under Section 201(1) if the deductee has already paid the tax or offered the impugned receipts in their return of income. However, interest under Section 201(1A) for delayed deposit of tax can still be levied up to the date of filing of the return of income by the deductee.

Earthmoving Equipment Service Corporation v. DCIT 22(2), Mumbai
84 Taxmann.com 51 · 2017 · ITAT
263
citing judgments

A penalty levied under Section 271(1)(c) for concealment of income or furnishing inaccurate particulars cannot be deleted merely due to technical defects in the penalty notice, such as not ticking the specific default, if the assessee understood the charges.

DIT v. GE Packaged Power Inc.
373 ITR 65 · 2015 · High Court
199
citing judgments

Interest under section 234B for default in payment of advance tax is not leviable when the entire income is subject to tax deduction at source under section 195, as no advance tax liability arises for the assessee in such circumstances.

247 ITR 305 (Guj) CIT v. Nestle India Ltd.
140 ITR 832 · 1983 · High Court
172
citing judgments

An employer is not in default under section 201 if they have made a bona fide estimate of employee income and deducted tax at source based on that estimate.

Jagaran Prakashan Ltd. v. DCIT
345 ITR 288 · 2012 · High Court
164
citing judgments

A deductor cannot be treated as an assessee in default for failure to deduct tax at source if the recipient has already paid the income tax directly. The onus is on the deductor to prove that the recipient has paid the tax.

CIT v. Kotak Securities Ltd.
340 ITR 333 · 2012 · High Court
161
citing judgments

A deductor's bonafide belief or reliance on a Tax Residency Certificate (TRC) can influence whether they are deemed an 'assessee in default' under Section 195 for failing to deduct tax at source on payments to non-residents. The decision clarifies the due diligence required when interpreting tax treaties and TRCs for TDS compliance.

CIT v. Idea Cellular Ltd.
325 ITR 148 · 2010 · High Court
155
citing judgments

Discounts offered to distributors under a tightly controlled relationship constitute commission and are subject to tax deduction at source under Section 194H of the Income-tax Act.

Judgments citing assessee in default

M3M India Pvt.Ltd., Gurgoan vs. JCIT OSD TDS Circle, Gurgaon

ITA 5431/DEL/2024[2017-18]Status: DisposedITAT Delhi11 Mar 2026AY 2017-18

Bench: Shri S Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Sh. S.S. Nager, CAFor Respondent: Ms. Amish S. Gupt, CIT,DR
Section 194CSection 194ISection 201(1)

/201(1A) of the Act. Pursuant to these proceedings the impugned orders were passed on 22.04.2022 treating appellant as an assessee in default for non-deduction of TDS on EDC payments u/s 194I of the Act in AY: 2017-18 and u/s 194C ... 5660/Del/2024 M/s M3M India Pvt. Ltd. (AY: 2017-18 to 2021-22) prejudice invoked provision of Section 194C of the Act to hold assessee in default but ultimately after taking into consideration the reply of the assessee held assessee to be in default for non-deduction of TDS u/s 194I

Vijay Stone Product, Sonebhadra vs. Asstt. Commissioner of Income Tax, Central Circle, Allahabad

In the result, the appeal of the assessee is allowed

ITA 4/ALLD/2019[2011-12]Status: DisposedITAT Allahabad10 Mar 2026AY 2011-12

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y.-2011-12 Vijay Stone Product, Vs. Asstt. Commissioner Of Income Bari Dala, Sonebhadra-231001 Tax, Central Circle, Allahabad Pan: Aagfv4724J (Appellant) (Respondent) Assessee By: Sh. Praveen Godbole, C.A. Revenue By: Sh. Amalendu Nath Mishra, Cit Dr Date Of Hearing: 17.12.2025 Date Of Pronouncement: 10.03.2026 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Orders Of The Ld. Cit(A)- 3, Lucknow Dated 29.10.2018 Wherein The Ld. Cit(A) Has Confirmed A Penalty Of Rs. 1 Lac Levied By The Assessing Officer Under Section 221 Of The Act Against The Total Levy Of Rs. 27,26,200/- Made By The Assessing Officer. The Grounds Of Appeal Are As Under:- “1. That In Any View Of The Matter Order Passed U/S 221(1) Of The It Act Imposing Huge Penalty & His Action As Partly Confirmed By The Commissioner Of Income Tax (Appeal) By Maintaining Penalty Of Rs. 1,00,000/- Is Unjustified & Incorrect In The Facts & Circumstances Of The Case. 2. That In Any View Of The Matter Tax Liability On The Basis Of Assessment Order As Created Is Not Correct At All Therefore The Question Of Maintaining Penalty Of Rs. 1,00,000/- Is Unwarranted In The Facts & Circumstances Of The Case. 3. That In Any View Of The Matter In The Facts & Circumstances Of The Case Penalty Order Passed By The Assessing Officer & His Action As Partly Confirmed By The Commissioner Of Income Tax (Appeal) Is Totally Incorrect & Illegal & Hence The Question Of Maintaining Penalty Does Not Arise & Therefore So Maintained Penalty Is Liable To Be Deleted In All Fairness & In Interest Of Justice.

For Appellant: Sh. Praveen Godbole, C.AFor Respondent: Sh. Amalendu Nath Mishra, CIT DR
Section 153DSection 153D(1)(B)Section 220(2)Section 221Section 221(1)Section 276C(2)

Accordingly, he decided to impose a penalty of Rs. 27,26,200/- (being the average 10% of balance demand) by treating the assessee in default under section 220(2) of the Income Tax Act. 4. The assessee went in appeal before the ld. CIT(A). Before ... raised vide notice dated 23.03.2013 and had, after careful consideration of all factors, come to a conclusion to treat the assessee as an assessee in default. However, she pointed out that it was also incumbent upon the AO to look into the quality of additions made during the assessment

M/S Sugee Ten Developers LLP, Mumbai vs. The Income Tax Officer, TDS Ward 2(2)(4), Mumbai

In the result, appeals of the assessee bearing ITA No

ITA 8287/MUM/2025[2022-23]Status: DisposedITAT Mumbai06 Mar 2026AY 2022-23

Bench: Shri. Arun Khodpia

For Appellant: Ms. Vinita ShahFor Respondent: Shri. Sanjeev Bhagat Sr. AR
Section 133ASection 194ISection 201Section 201(1)Section 250

that the FAA did not accept the submissions of the assessee. With regard to the alternate plea that assessee cannot be treated as assessee in default on this ground, we notice that the ITR for AY 2024-25 filed by Shri PremalDayalalDoshi is submitted by the Id AR (page

M/S Sugee Ten Developers LLP, Mumbai vs. The Income Tax Officer, TDS Ward 2(2)(4), Mumbai

In the result, appeals of the assessee bearing ITA No

ITA 8286/MUM/2025[2020-21]Status: DisposedITAT Mumbai06 Mar 2026AY 2020-21

Bench: Shri. Arun Khodpia

For Appellant: Ms. Vinita ShahFor Respondent: Shri. Sanjeev Bhagat Sr. AR
Section 133ASection 194ISection 201Section 201(1)Section 250

that the FAA did not accept the submissions of the assessee. With regard to the alternate plea that assessee cannot be treated as assessee in default on this ground, we notice that the ITR for AY 2024-25 filed by Shri PremalDayalalDoshi is submitted by the Id AR (page

M/S Sugee Ten Developers LLP, Mumbai vs. The Income Tax Officer, TDS Ward 2(2)(4), Mumbai

In the result, appeals of the assessee bearing ITA No

ITA 8285/MUM/2025[2019-20]Status: DisposedITAT Mumbai06 Mar 2026AY 2019-20

Bench: Shri. Arun Khodpia

For Appellant: Ms. Vinita ShahFor Respondent: Shri. Sanjeev Bhagat Sr. AR
Section 133ASection 194ISection 201Section 201(1)Section 250

that the FAA did not accept the submissions of the assessee. With regard to the alternate plea that assessee cannot be treated as assessee in default on this ground, we notice that the ITR for AY 2024-25 filed by Shri PremalDayalalDoshi is submitted by the Id AR (page

M/S Sugee Ten Developers LLP, Mumbai vs. The Income Tax Officer, TDS Ward 2(2)(4), Mumbai

In the result, appeals of the assessee bearing ITA No

ITA 8284/MUM/2025[2018-19]Status: DisposedITAT Mumbai06 Mar 2026AY 2018-19

Bench: Shri. Arun Khodpia

For Appellant: Ms. Vinita ShahFor Respondent: Shri. Sanjeev Bhagat Sr. AR
Section 133ASection 194ISection 201Section 201(1)Section 250

that the FAA did not accept the submissions of the assessee. With regard to the alternate plea that assessee cannot be treated as assessee in default on this ground, we notice that the ITR for AY 2024-25 filed by Shri PremalDayalalDoshi is submitted by the Id AR (page

M/S. Avm Productions, Chennai vs. ACIT, Non Corporate Circle-20(1), Chennai

In the result, appeal filed by the assessee is allowed

ITA 2359/CHNY/2025[2017-18]Status: DisposedITAT Chennai04 Mar 2026AY 2017-18

Bench: Shri Aby T. Varkey & Ms. Padmavathy. S

Section 270Section 270A

rendered himself for penalty M/s. AVM Productions :: 8 :: u/s.270A of the Act.” Accordingly, he held assessee to be an assessee in default u/s.270A of the Act for misreporting its income. We don’t countenance the action of the AO levying penalty for the simple reason that there was total failure ... part of AO to apply his mind to hold assessee to be an assessee in default u/s.270A of the Act for misreporting its income. Merely reproducing sub-section (1) to (3) of section 270A of the Act, which is relating to underreporting income, the AO is noted to have imposed

Chief Municipal Officer, Nagar Palika, Pithampur vs. ITO, Dhar

Appeal is allowed for statistical purpose

ITA 494/IND/2025[2016-17]Status: DisposedITAT Indore27 Feb 2026AY 2016-17

Bench: Shri B.M. Biyani & Shri Paresh M. Joshiassessment Year:2016-17 Chief Municipal Officer, Acit (Tds) Nagar Palika, Opposite Indore बनाम/ Bajaj Tempo, Sector No.1 Vs. Pithampur (Assessee/Appellant) (Revenue/Respondent) Tan: Bplc01981A Assessee By Ms. Nisha Lahoti, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 12.02.2026 Date Of Pronouncement 27/02/2026

Section 194JSection 201Section 201(1)Section 250Section 251

opportunity of being heard 3. On the facts and circumstances of the case and applicable law, Ld. CIT(A) erred in treating the assessee in default within the meaning of section 201(1) for short deduction of TDS u/s 194J for an amount ... facts and circumstances of the case and applicable law Ld. CIT(A) erred in treating the assessee in default within the meaning of section 201(1) for short deduction of TDS u/s/194J for an amount of Rs. 4,36,013 and thereby levying an interest

Superhouse Limited, Kanpur vs. CIT, International Taxation-3, Delhi

In the result, both appeals of the assessee are allowed

ITA 356/LKW/2024[2014-15]Status: DisposedITAT Lucknow25 Feb 2026AY 2014-15

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharyita Nos. 356 & 357/Lkw/2024 A.Ys. 2014-15 & A.Ys. 2015-16 Superhouse Limited, 150 Feet Vs. The Commissioner Of Income Tax Road, Jajmau, Kanpur-208010 International Taxation-3, Delhi Pan: Aabcs9328K (Appellant) (Respondent) Assessee By: Sh. G.C. Srivastava, Adv & Sh. Kalrav Mehrotra, Adv Revenue By: Sh. R.K. Agarwal, Cit Dr Date Of Hearing: 03.12.2025 Date Of Pronouncement: 25.02.2026 O R D E R Per Nikhil Choudhary, A.M.: These Two Appeals Have Been Filed By The Assessee Against The Orders Of The Cit, (International Taxation)-3, Delhi Passed Under Section 263 Of The Act For The A.Ys. 2014-15 & 2015-16, Both Dated 29.03.2024, Wherein The Ld. Cit Has Set Aside The Earlier Orders Of The Assessing Officer For Making Of Fresh Orders In Accordance With The Directions Issued By Her. The Grounds Of Appeal Are As Under:- “1. Because, On The Facts & Circumstances Of The Case & In Law, The Ld. Cit Has Erred In Assuming Jurisdiction Under Section 263 Of The Act & In Doing So, Has Sought To Substitute His Opinion With The Order Under Section 201(1)/201(1A) Passed After Undertaking Extensive & Detailed Consideration Of The Issue By The Ito (Tds). 2. Because, On The Facts & Circumstances Of The Case & In Law, The Ld. Cit Has Erred In Assuming The Jurisdiction Under Section 263 Of The Act Without Appreciating That The Order Under Section 201(1)/201(1A) Passed By The Ito (Tds) Was Unerring & In Consonance With The Settled Principles Of Law. 3. Because, On The Facts & Circumstances Of The Case & In Law, The Impugned Order While Premised On An Illegal Assumption Of Jurisdiction, Further Suffers From Non-Application Of Mind Since The Submissions Of The Assessee Have Not Been Considered [As Illustrated Infra]. A.Ys. 2014-15 & 2015-16

For Appellant: Sh. G.C. Srivastava, Adv & Sh. KalravFor Respondent: Sh. R.K. Agarwal, CIT DR
Section 201(1)Section 263Section 90

deducted tax at source. The assessee was therefore, required to show cause as to why it should not be treated as an assessee in default and in view of the above, it was required to submit; a. Copy of the relevant agreements / invoices which were the basis of remitting ... circumstances, it cannot be held that there was any infirmity in the view taken by the AO in refusing to hold the assessee in default for failure to deduct tax at source on payment of export commission to foreign commission agents. Accordingly, there does not appear to be any basis

Embassy Property Developments Private Limited, Bangalore vs. DCIT, Circle-1(1), Bangalore

ITA 1031/BANG/2025[2017-18]Status: DisposedITAT Bangalore23 Feb 2026AY 2017-18

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year : 2017-18

For Appellant: Ms. Nimashri K.A., A.RFor Respondent: Sri Shivanand H Kalakeri, D.R
Section 201Section 201(1)Section 250Section 40

Developments Private Limited, Bengaluru Page 5 of 24 Rs.58,06,03,613/-. In view of the above fact, the deductor company was held “assessee in default” and accordingly default u/s 201(1) and interest u/s 201(1A) of the Act are charged as below:- Sl.No. Particulars Amount 1. Amount ... provision which is nothing but the Expenses Payables amounting to Rs. 58,06,03,613/-, the ld DCIT (TDS) has rightly held the “assessee in default” & accordingly levied the interest also. 8. We have heard the rival submissions and perused the materials available on record. It is an undisputed fact

Naushad Ali Abdul Haq Shaik, Mumbai vs. Income Tax Officer 42(2)(4), Mumbai

ITA 7339/MUM/2025[2015-16]Status: DisposedITAT Mumbai23 Feb 2026AY 2015-16

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Mr. Akshay JainFor Respondent: Mr. Swapnil Choudhari, Sr. DR
Section 245

before the 1st day of June, 2000 and the October, 1998 but before the 1st day of June, 2000 and the assessee in default has not presented any appeal within the time assessee in default has not presented any appeal within the time assessee in default has not presented

Naushad Ali Abdul Haq Shaikh, Mumbai vs. Income Tax Officer 42(2)(4), Mumbai

ITA 7338/MUM/2025[2015-16]Status: DisposedITAT Mumbai23 Feb 2026AY 2015-16

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Mr. Akshay JainFor Respondent: Mr. Swapnil Choudhari, Sr. DR
Section 245

before the 1st day of June, 2000 and the October, 1998 but before the 1st day of June, 2000 and the assessee in default has not presented any appeal within the time assessee in default has not presented any appeal within the time assessee in default has not presented

Akansha Yogesh Deshmukh, Bpcl Staff Colony vs. ITO/DCIT International Taxation Mumbai, Income Tax Building

ITA 8949/MUM/2025[2018-19]Status: DisposedITAT Mumbai19 Feb 2026AY 2018-19

Bench: Hon’Ble Shri Sandeep Gosain & Hon’Ble Shri Prabhash Shankar

Section 115BSection 144Section 147Section 148Section 250Section 250(6)

IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & HON’BLE SHRI

DCIT, Circle-73(1), Delhi vs. Canon India Private Limited, Delhi

The appeal of the assessee is allowed

ITA 5588/DEL/2025[2013-14]Status: DisposedITAT Delhi17 Feb 2026AY 2013-14

Bench: BEFORESHRI SATBEER SINGH GODARA (Judicial Member), SHRI NAVEEN CHANDRA (Accountant Member)

Section 194Section 201(1)

which is incidentally sister concern of M/s Ambience Developers & Infrastructure Pvt Ltd. d) M/s Canon India Pvt. Ltd. is Assessee-in-default: In view of the above discussion, it is evidently clear that the payments in the nature of common area maintenance which are essentially part of rental activity ... expenses, As CAM expenses are squarely covered under the provisions of section of 194-1, therefore the assessee is treated as an assessee in default within the meaning of section 201(1) of the 1. T. Act, 1961, for failing to appropriately deduct tax on payment as required

State Bank of India Local Head Office Chandigarh, Chandigarh vs. Addl Commissioner of Income Tax(TDS) Chandigarh, Chandigarh

In the result, appeal filed by the Assessee is dismissed

ITA 991/CHANDI/2025[2016-17]Status: DisposedITAT Chandigarh11 Feb 2026AY 2016-17

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: NoneFor Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR
Section 10(5)Section 133(6)Section 192Section 271C

available only in respect of travel to any place in India and not for foreign travel. Accordingly, the assessee was treated as an assessee in default under sections 201(1) and 201(1A) of the Act for non-deduction of tax at source, resulting in demand of tax and interest

Raiganj Central Co-Operative Bank Ltd., Raiganj, Uttar Dinajpur vs. D, C, I.T., Circle - 2, Jalpaiguri

In the result, the appeal filed by the Revenue in ITA No

ITA 975/KOL/2024[2013-2014]Status: DisposedITAT Kolkata11 Feb 2026AY 2013-2014

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115Section 143(3)Section 250Section 36(1)(viia)Section 40

accordance with the provisions of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, then, for the purpose of this sub- clause, it shall be deemed that the assessee has deducted

Raiganj Central Co-Operative Bank Ltd., Raiganj, Uttar Dinajpur vs. D.C.I.T., Circle - 2, Jalpaiguri

ITA 974/KOL/2024[2012-2013]Status: DisposedITAT Kolkata11 Feb 2026AY 2012-2013

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115Section 143(3)Section 250Section 36(1)(via)Section 36(1)(viia)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT

Raiganj Central Co-Operative Bank Ltd., Raiganj, Uttar Dinajpur vs. JCIT (TDS), Range - 6, Siliguri

ITA 2237/KOL/2024[2013-2014]Status: DisposedITAT Kolkata11 Feb 2026AY 2013-2014

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115Section 143(3)Section 250Section 36(1)(via)Section 36(1)(viia)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT

Assistant Controller F&A Directorate of Industries, Shimla vs. Income Tax Officer (TDS), Ward Shimla

ITA 98/CHANDI/2025[2017-18]Status: DisposedITAT Chandigarh09 Feb 2026AY 2017-18

Bench: the Ld. CIT(A) came to be dismissed without adjudication on merits, primarily on the ground that there was delay in filing of the appeal and that the assessee failed to respond to the notices issued by the Ld. CIT(A).

For Appellant: Shri Vishal Mohan, Sr. Advocate with Shri Abhinav Bijwaria, AdvocateFor Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR
Section 194CSection 201Section 201(1)Section 271C

same and maintainable. 2. That in the facts and circumstances of the case, the learned Authorities below are not justified in treating the assessee in default and thereby creating a demand of Rs. 86,74,688/- against the assessee and also not allowing the benefit of the provision ... deposited by HPSIDC and the same stood reflected in its returns of income. Therefore, the assessee could not be treated as an assessee in default under section 201(1) of the Act. 12. Without prejudice, it was argued that even assuming there was a technical default, a penalty under section

Gomti Research and Pharmachem Private Limited, Bengaluru vs. Income Tax Officer, Ward-3(1)(1), Bangalore

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1517/BANG/2025[2018-19]Status: DisposedITAT Bangalore09 Feb 2026AY 2018-19

Bench: Shri Laxmi Prasad Sahu & Shri Soundararajan K.Assessment Year : 2018-19

For Appellant: Ms. Suhana T.H.M, AdvocateFor Respondent: Shri Balusamy .N, JCIT-DR
Section 142(1)Section 156Section 201(1)Section 234ASection 250Section 40Section 40a

assessee in their income and based on that, the computation was made. Therefore the assessee requested the AO not to treat the assessee in default u/s. 201(1) of the Act and therefore the deduction of 30% as per section 40(a)(ia) would not arise in their case ... accordance with the provisions of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, then, for the purpose of this sub-clause, it shall be deemed that the assessee has deducted