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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

Vivimed Labs Limited, Hyderabad vs. DCIT., Central Circle-3(4), Hyderabad

Accordingly, the appeal filed by the assessee company, being devoid and bereft of any substance, is dismissed

ITA 1236/HYD/2025[2021-22]Status: DisposedITAT Hyderabad21 Jan 2026AY 2021-22

Bench: Shri Manjunatha G. & Shri Ravish Soodआ.अपी.सं /Ita No.1236 & 1237/Hyd/2025 ("नधा"रण वष"/Assessment Year:2021-22 & 2022-23) Vivimed Labs Limited, Vs. Dcit, Hyderabad. Central Circle-3(4), Pan: Aaacv6060A Hyderabad. (Appellant) (Respondent) "नधा"रती "वारा/Assessee By: Shri P. Murali Mohan Rao, Ca राज" व "वारा/Revenue By: Shri K. Vinoth Kannan, Sr. Ar सुनवाई क" तार"ख/Date Of 05/01/2026 Hearing: घोषणा क" तार"ख/Date Of 21/01/2026 Pronouncement: आदेश / Order

For Appellant: Shri P. Murali Mohan Rao, CAFor Respondent: Shri K. Vinoth Kannan
Section 154Section 200Section 200(3)Section 201Section 201(1)Section 220(2)Section 234ESection 250Section 311

ought to have appreciated that the interest levied is not warranted since the assessee has not been treated as an assessee in default u/s 201 of the Act for any amount of non-deduction for the year. 5. The Ld. CIT(A) ought to have appreciated that due to covid ... there was no default on its part in depositing the amount of tax deducted at source (TDS) for being treated as an assessee in default under section 201 of the Act, therefore, no interest under the aforesaid statutory provision was liable to be imposed in its case

The Haryana State Coop La Bour & Construction Fed L Td, Panchkula vs. Income Tax Officer (TDS), Karnal

In the result, the appeal is partly allowed

ITA 3244/DEL/2025[2017-18]Status: DisposedITAT Delhi21 Jan 2026AY 2017-18

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 3242/Del/2025 : Asstt. Year : 2015-16 Ita No. 3243/Del/2025 : Asstt. Year : 2016-17 Ita No. 3244/Del/2025 : Asstt. Year : 2017-18 The Haryana State Cooperative Labour Vs Income Tax Officer(Tds) & Construction Federation Ltd., Aayakar Bhawan, Bay No. 23-24, Sector-2, Panchkula, Sector-12, Karnal, Haryana-134109 Haryana (Appellant) (Respondent) Pan No. Aaaft8979R Assessee By : None Revenue By : Ms. Ankush Kalra, Sr. Dr Date Of Hearing: 08.01.2026 Date Of Pronouncement: 21.01.2026 Order Per Satbeer Singh Godara: These Assessee’S Three Appeals For Assessment Years 2015-16, 2016-17 & 2017-18, Arise Against The Addl./Jcit(A)-8, Mumbai’S Din & Order Nos. Itba/Apl/S/250/2024–25/1074658982(1), 1074659438(1) & 1074660137(1) Dated 18.03.2025, In Proceedings U/S 201 Of The Income Tax Act, 1961 (In Short “The Act”), Respectively.

For Appellant: NoneFor Respondent: Ms. Ankush Kalra, Sr. DR
Section 194Section 194CSection 201Section 201(1)

vehemently argues that the lower appellate authority herein has rightly upheld the Assessing Officer’s identical action treating as the assessee/deductor as the “assessee-in-default” in section 201(1) r.w.s 201(1A) proceedings; vide the following detailed discussion: 6.1 I have gone through the facts of the case ... held the appellant in default for non-TDS on financial assistance given to the societies and accordingly, the AO held the appellant as assessee in default and accordingly raised demand of Rs.4,94,275/- under section 201(1) and interest under section 201(1A) of the Act. 6.2 The appellant

The Haryana State Coop La Bour & Construction Fed L Td, Panchkula vs. Income Tax Officer (TDS), Karnal

In the result, the appeal is partly allowed

ITA 3243/DEL/2025[2016-17]Status: DisposedITAT Delhi21 Jan 2026AY 2016-17

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 3242/Del/2025 : Asstt. Year : 2015-16 Ita No. 3243/Del/2025 : Asstt. Year : 2016-17 Ita No. 3244/Del/2025 : Asstt. Year : 2017-18 The Haryana State Cooperative Labour Vs Income Tax Officer(Tds) & Construction Federation Ltd., Aayakar Bhawan, Bay No. 23-24, Sector-2, Panchkula, Sector-12, Karnal, Haryana-134109 Haryana (Appellant) (Respondent) Pan No. Aaaft8979R Assessee By : None Revenue By : Ms. Ankush Kalra, Sr. Dr Date Of Hearing: 08.01.2026 Date Of Pronouncement: 21.01.2026 Order Per Satbeer Singh Godara: These Assessee’S Three Appeals For Assessment Years 2015-16, 2016-17 & 2017-18, Arise Against The Addl./Jcit(A)-8, Mumbai’S Din & Order Nos. Itba/Apl/S/250/2024–25/1074658982(1), 1074659438(1) & 1074660137(1) Dated 18.03.2025, In Proceedings U/S 201 Of The Income Tax Act, 1961 (In Short “The Act”), Respectively.

For Appellant: NoneFor Respondent: Ms. Ankush Kalra, Sr. DR
Section 194Section 194CSection 201Section 201(1)

vehemently argues that the lower appellate authority herein has rightly upheld the Assessing Officer’s identical action treating as the assessee/deductor as the “assessee-in-default” in section 201(1) r.w.s 201(1A) proceedings; vide the following detailed discussion: 6.1 I have gone through the facts of the case ... held the appellant in default for non-TDS on financial assistance given to the societies and accordingly, the AO held the appellant as assessee in default and accordingly raised demand of Rs.4,94,275/- under section 201(1) and interest under section 201(1A) of the Act. 6.2 The appellant

The Haryana State Coop La Bour & Construction Fed L Td, Panchkula vs. Income Tax Officer (TDS), Karnal

In the result, the appeal is partly allowed

ITA 3242/DEL/2025[2015-16]Status: DisposedITAT Delhi21 Jan 2026AY 2015-16

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahmanita No. 3242/Del/2025 : Asstt. Year : 2015-16 Ita No. 3243/Del/2025 : Asstt. Year : 2016-17 Ita No. 3244/Del/2025 : Asstt. Year : 2017-18 The Haryana State Cooperative Labour Vs Income Tax Officer(Tds) & Construction Federation Ltd., Aayakar Bhawan, Bay No. 23-24, Sector-2, Panchkula, Sector-12, Karnal, Haryana-134109 Haryana (Appellant) (Respondent) Pan No. Aaaft8979R Assessee By : None Revenue By : Ms. Ankush Kalra, Sr. Dr Date Of Hearing: 08.01.2026 Date Of Pronouncement: 21.01.2026 Order Per Satbeer Singh Godara: These Assessee’S Three Appeals For Assessment Years 2015-16, 2016-17 & 2017-18, Arise Against The Addl./Jcit(A)-8, Mumbai’S Din & Order Nos. Itba/Apl/S/250/2024–25/1074658982(1), 1074659438(1) & 1074660137(1) Dated 18.03.2025, In Proceedings U/S 201 Of The Income Tax Act, 1961 (In Short “The Act”), Respectively.

For Appellant: NoneFor Respondent: Ms. Ankush Kalra, Sr. DR
Section 194Section 194CSection 201Section 201(1)

vehemently argues that the lower appellate authority herein has rightly upheld the Assessing Officer’s identical action treating as the assessee/deductor as the “assessee-in-default” in section 201(1) r.w.s 201(1A) proceedings; vide the following detailed discussion: 6.1 I have gone through the facts of the case ... held the appellant in default for non-TDS on financial assistance given to the societies and accordingly, the AO held the appellant as assessee in default and accordingly raised demand of Rs.4,94,275/- under section 201(1) and interest under section 201(1A) of the Act. 6.2 The appellant