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“interest under section 201(1A)”

TDS / TCSSection 201(1A)Section 201(1A)369 judgments

The decision most relied on for interest under section 201(1A) is Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT (293 ITR 226), cited in 576 judgments on BharatTax.

Leading authorities on interest under section 201(1A)

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.

Prakash Cotton Mills Pvt. Ltd. v. CIT
201 ITR 684 · 1993 · Supreme Court
133
citing judgments

Compensatory interest or damages paid for a breach of contract, arising in the normal course of business, are allowable as a deduction under section 37(1) as wholly and exclusively incurred for business purposes. This principle extends to indirect taxes paid in the course of business, which are admissible as business expenditure.

Bharat Commerce Industries Ltd. v. CIT
230 ITR 733 · 1998 · Supreme Court
130
citing judgments

The Supreme Court holds that interest paid under Section 201(1A) of the Income-tax Act, for failure to deduct tax at source, is not an allowable business expenditure under Section 37(1) of the Act.

Lachmandas Mathura v. CIT
254 ITR 799 · 2002 · Supreme Court
119
citing judgments

Interest paid on delayed payment of statutory dues, such as sales tax, service tax, TDS, and GST, is compensatory in nature rather than penal. Consequently, such interest is an allowable deduction in computing business profits.

American Express International Banking Corporation v. CIT
258 ITR 601 · 2002 · High Court
90
citing judgments

Interest paid by banks is allowable as a deduction in computing total income. The decision distinguished the Supreme Court's ruling in Vijaya Bank regarding the deductibility of such interest.

CIT v. Chennai Properties & Investment Ltd.
239 ITR 435 · 1999 · High Court
77
citing judgments

Interest paid under section 201(1A) for delay in remitting tax deducted at source is not an allowable business expenditure and cannot be regarded as a compensatory payment. This interest takes its character from the nature of the tax levy, being a direct tax itself.

CIT v. Oriental Insurance Co. Ltd.
125 Taxmann 1094 · 2002 · High Court
77
citing judgments

Interest levied under Section 201(1A) for delayed remittance of Tax Deducted at Source (TDS) is compensatory in nature, not penal. It is a distinct provision for delayed remittance, similar to interest paid by Revenue on refunds.

Bank Ltd. (supra), Saraswat Co-op. Bank Ltd. v. ITO (TDS)
54 Taxmann.com 297 · 2015 · Reported
76
citing judgments

A multi-state cooperative bank is obligated to deduct tax at source on interest paid on fixed deposits placed by cooperative societies, as Section 194A(3)(viia) of the Income Tax Act, 1961, rather than Section 194A(3)(v), applies to cooperative banks in this context.

Judgments citing interest under section 201(1A)

Mukesh Malhotra, Shimla vs. Income Tax Officer, Shimla

In the result, appeal of the assessee is partly allowed

ITA 823/CHANDI/2024[2011-12]Status: DisposedITAT Chandigarh20 Mar 2025AY 2011-12

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

For Appellant: Shri Vishal Mohan, Sr. Advocate with Shri Parveen Sharma, AdvocateFor Respondent: Shri Ved Parkash Kalia, Sr. DR
Section 143(3)Section 147Section 148Section 194CSection 194HSection 40

charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty under section 271C

Mukesh Malhotra, Shimla vs. Income Tax Officer, Shimla

In the result, appeal of the assessee is partly allowed

ITA 822/CHANDI/2024[2010-11]Status: DisposedITAT Chandigarh20 Mar 2025AY 2010-11

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

For Appellant: Shri Vishal Mohan, Sr. Advocate with Shri Parveen Sharma, AdvocateFor Respondent: Shri Ved Parkash Kalia, Sr. DR
Section 143(3)Section 147Section 148Section 194CSection 194HSection 40

charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty under section 271C

Mukesh Malhotra, Shimla vs. Income Tax Officer, Ward-1, Shimla

In the result, appeal of the assessee is partly allowed

ITA 821/CHANDI/2024[2009-10]Status: DisposedITAT Chandigarh20 Mar 2025AY 2009-10

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

For Appellant: Shri Vishal Mohan, Sr. Advocate with Shri Parveen Sharma, AdvocateFor Respondent: Shri Ved Parkash Kalia, Sr. DR
Section 143(3)Section 147Section 148Section 194CSection 194HSection 40

charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty under section 271C

DCIT(OSD)(TDS)-2(2), Mumbai vs. Shoppers Stop Limited, Mumbai

Accordingly, all the grounds raised by the Revenue stands dismissed

ITA 708/MUM/2025[2018]Status: DisposedITAT Mumbai20 Mar 2025

Bench: Shri Anikesh Banerjee, Jm & Ms Padmavathy S, Am

For Appellant: Shri Hemant Kumar C Leuva
Section 133ASection 154Section 194CSection 201Section 201(1)

assessee as assessee in default under section 201(1) with respect to tax deducted on the following and the AO also levied interest under section 201(1A) accordingly – Particular Amount – Rs. On account of Non deduction of TDS u/s 201(1) on 37,48,172 Sokrati Technologies On account ... deleted the tax and interest levied by the AO as under –  On account of Non deduction of TDS u/s 201(1) & interest under section 201(1A) on Sokrati Technologies – The CIT(A) deleted the addition by placing reliance on the decision of his predecessor in assessee's own case

DCIT(OSD)(TDS)-2(2), Mumbai vs. Shoppers Stop Limited, Mumbai

Accordingly, all the grounds raised by the Revenue stands dismissed

ITA 707/MUM/2025[2013-14]Status: DisposedITAT Mumbai20 Mar 2025AY 2013-14

Bench: Shri Anikesh Banerjee, Jm & Ms Padmavathy S, Am

For Appellant: Shri Hemant Kumar C Leuva
Section 133ASection 154Section 194CSection 201Section 201(1)

assessee as assessee in default under section 201(1) with respect to tax deducted on the following and the AO also levied interest under section 201(1A) accordingly – Particular Amount – Rs. On account of Non deduction of TDS u/s 201(1) on 37,48,172 Sokrati Technologies On account ... deleted the tax and interest levied by the AO as under –  On account of Non deduction of TDS u/s 201(1) & interest under section 201(1A) on Sokrati Technologies – The CIT(A) deleted the addition by placing reliance on the decision of his predecessor in assessee's own case

Xcellon Education Limited, Ahmedabad vs. Addl. CIT, TDS, Ahmedabad

The appeal of the assessee is allowed

ITA 2681/AHD/2017[2016-2017]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2016-2017

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

Section 133ASection 201Section 201(1)Section 250(6)Section 271CSection 272A(2)(g)

default for total sum of Rs.31,11,556/-, for the unpaid TDS amount of Rs.26,33,867/- and Rs.4,77,689/- being interest under section 201(1A) of the Act. After considering the payment already made by the assessee, a demand of Rs.9,72,910/- was raised for the said

Xcellon Education Limited, Ahmedabad vs. Addl. CIT, TDS, Ahmedabad

The appeal of the assessee is allowed

ITA 2680/AHD/2017[2016-2017]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2016-2017

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

Section 133ASection 201Section 201(1)Section 250(6)Section 271CSection 272A(2)(g)

default for total sum of Rs.31,11,556/-, for the unpaid TDS amount of Rs.26,33,867/- and Rs.4,77,689/- being interest under section 201(1A) of the Act. After considering the payment already made by the assessee, a demand of Rs.9,72,910/- was raised for the said

Xcellon Education Limited, Ahmedabad vs. Addl. CIT, TDS, Ahmedabad

The appeal of the assessee is allowed

ITA 2679/AHD/2017[2015-2016]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2015-2016

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

Section 133ASection 201Section 201(1)Section 250(6)Section 271CSection 272A(2)(g)

default for total sum of Rs.31,11,556/-, for the unpaid TDS amount of Rs.26,33,867/- and Rs.4,77,689/- being interest under section 201(1A) of the Act. After considering the payment already made by the assessee, a demand of Rs.9,72,910/- was raised for the said

Xcellon Education Limited, Ahmedabad vs. Addl. CIT, TDS, Ahmedabad

The appeal of the assessee is allowed

ITA 2678/AHD/2017[2015-2016]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2015-2016

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

Section 133ASection 201Section 201(1)Section 250(6)Section 271CSection 272A(2)(g)

default for total sum of Rs.31,11,556/-, for the unpaid TDS amount of Rs.26,33,867/- and Rs.4,77,689/- being interest under section 201(1A) of the Act. After considering the payment already made by the assessee, a demand of Rs.9,72,910/- was raised for the said

Inguz Sbi Ifmr Capital 2016, Mumbai vs. ACIT (OSD) (TDS), Cir-1(2), Mumbai

In the result, appeal of the assessee is allowed

ITA 6189/MUM/2024[2019-20]Status: DisposedITAT Mumbai06 Mar 2025AY 2019-20

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: Shri Niraj Sheth, ARFor Respondent: Shri Mahesh Pamnani (Sr. DR)
Section 194LSection 201Section 201(1)

amount of excess interest spread paid by the Appellant to the originator. Ground No 3: Levy of interest under section 201(1A) of the Act The CTT(A) erred on facts and in law in levying interest under section 201(1A) of the Act. 3. Brief facts of the case

Deputy Commissioner of Income Tax(International Taxation) Circle-2(2) Bengaluru, Bangalore vs. U L India Private Limited, Bangalore

In the result, the appeals filed by the assessee are allowed for statistical purposes and the appeal filed by revenue stands dismissed

ITA 29/BANG/2024[2012-13]Status: DisposedITAT Bangalore03 Mar 2025AY 2012-13

Bench: Shri Waseem Ahmed & Shri Prakash Chand Yadav

For Appellant: Sri Ketan Ved, A.RFor Respondent: Ms. Neera Malhotra, D.R
Section 195Section 201(1)Section 250

judicial precedents which have similar factual matrix, instead disregarded them on the basis that the facts are completely different. Erroneous levy of interest under section 201(1A) of the Act 18. The Learned AO and CIT(A) has erred in levying interest under section 201(1A) of the Act amounting

M/S. Ul India Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, (International Taxation), Circle-2(2), Bengaluru

In the result, the appeals filed by the assessee are allowed for statistical purposes and the appeal filed by revenue stands dismissed

ITA 1136/BANG/2023[2012-13]Status: DisposedITAT Bangalore03 Mar 2025AY 2012-13

Bench: Shri Waseem Ahmed & Shri Prakash Chand Yadav

For Appellant: Sri Ketan Ved, A.RFor Respondent: Ms. Neera Malhotra, D.R
Section 195Section 201(1)Section 250

judicial precedents which have similar factual matrix, instead disregarded them on the basis that the facts are completely different. Erroneous levy of interest under section 201(1A) of the Act 18. The Learned AO and CIT(A) has erred in levying interest under section 201(1A) of the Act amounting

The H.P.State Co-Operative Bank Ltd., Sirmour vs. ITO(TDS), Solan

In the result, all the above appeals filed by the Assessee are allowed

ITA 127/CHANDI/2020[2018-19]Status: DisposedITAT Chandigarh27 Feb 2025AY 2018-19

Bench: This Tribunal. The Assesseee Is Aggrieved By The Common Order Bearing Number Itba/Apl/M/250/2019- 20/1021304437(1) Dt. 25/11/2019 Of Cit(A) Shimla, H.P. Passed U/S 250 Of The Act Which Is Hereinafter Referred To As The “Impugned Order”. The Relevant Assessment Year Is 2016-17 & The Corresponding Previous Year Period Is From 01/04/2015 To 31/03/2016. 2. At The Outset The Registry Has Pointed Out That The Above Appeals Are Barred By Limitation By 02 Days.

For Appellant: Shri Sachin Doger, C.AFor Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR
Section 194ASection 194A(3)(i)Section 194A(3)(v)Section 19iSection 201Section 201(1)Section 246ASection 250Section 253

Appeals) in holding that the assessee is not an assessee in default under section 201(1) of the Act and consequently interest under section 201(1A) of the Act also cannot be levied Similar view were held by Hon'ble ITAT Pune bench "A", in case of Abhyudaya

The H.P.State Co-Operative Bank Ltd., Sirmour vs. ITO(TDS), Solan

In the result, all the above appeals filed by the Assessee are

ITA 126/CHANDI/2020[2017-18]Status: DisposedITAT Chandigarh27 Feb 2025AY 2017-18
For Appellant: Shri Sachin Doger, C.AFor Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR
Section 194ASection 194A(3)Section 194A(3)(v)Section 19iSection 201Section 201(1)Section 246ASection 250Section 253

Appeals) in holding that the assessee is not an assessee in default under section 201(1) of the Act and consequently interest under section 201(1A) of the Act also cannot be levied Similar view were held by Hon'ble ITAT Pune bench "A", in case of Abhyudaya

The H.P.State Co-Operative Bank Ltd., Sirmour vs. ITO(TDS), Solan

In the result, all the above appeals filed by the Assessee are

ITA 125/CHANDI/2020[2016-17]Status: DisposedITAT Chandigarh27 Feb 2025AY 2016-17
For Appellant: Shri Sachin Doger, C.AFor Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR
Section 194ASection 194A(3)Section 194A(3)(v)Section 19iSection 201Section 201(1)Section 246ASection 250Section 253

Appeals) in holding that the assessee is not an assessee in default under section 201(1) of the Act and consequently interest under section 201(1A) of the Act also cannot be levied Similar view were held by Hon'ble ITAT Pune bench "A", in case of Abhyudaya

DCIT 5(1)(1), Mumbai vs. Air India Ltd, Mumbai

In the result, the appeals filed by the assessee

ITA 4484/MUM/2018[2012-13]Status: DisposedITAT Mumbai21 Feb 2025AY 2012-13

Bench: Shri Baskaran Br, Accountat Member & Shri Pavan Kumar Gadale

For Appellant: Shri Madhur Agrawal.ARFor Respondent: Smt Sailaja Rai, CIT DR
Section 143(2)Section 14ASection 250Section 44A

interest paid on any other sums apart from profits or gains earned in business. In the instant case, the assessee had paid interest under section 201(1A) on delayed payment of TDS. The said TDS represented the taxes paid on behalf of the payees to the credit

Servier India Private Limited, Mumbai vs. Assistant Commissioner of Income-Tax, OSD, TDS Circle 2(2), Mumbai

ITA 5775/MUM/2024[2022-23]Status: DisposedITAT Mumbai04 Feb 2025AY 2022-23

Bench: Shri Narender Kumar Choudhry, Jm & Ms Padmavathy S, Am

For Appellant: Shri M. P Lihia, ARFor Respondent: Shri Surendra Meena, Sr. DR
Section 133(6)Section 201Section 201(1)Section 37Section 40

deduction of tax at source. Accordingly, the AO levied a sum of Rs. 1,89,98,646/- towards TDS default and interest under section 201(1A). 3. Aggrieved the assessee filed further appeal before the CIT(A). The assessee furnished additional evidences before the CIT(A) to substantiate the claim ... held the assessee to be an assessee in default under section 201(1) and levied interest under section 201(1A) for the reason that the assessee failed to deduct tax at source on the provision created towards various expenses as of 31.03.2022. The CIT(A) upheld the order

Cognizant Technology Solutions India Private Limited, Chennai vs. Deputy Commissioner of Income Tax, TDS Circle 1(1), Chennai

In the result, all the appeals filed by the assessee are partly allowed and the Stay Applications filed by the assessee are dismissed

ITA 2215/CHNY/2024[2019-20]Status: DisposedITAT Chennai22 Jan 2025AY 2019-20

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. Nos.2201 & 2202, 2203 & 2204, 2205, 2209, 2211 & 2212, 2213 & 2214 & 2215/Chny/2024 िनधा"रण वष"/Assessment Years: 2016-17, 2017-18, 2020-21, 2021-22, 2015- 16, 2018-19 & 2019-20 & S.A. Nos. 65, 66, 67, 68, 69, 70, 71, 72, 73, 74 & 75/Chny/2024 [In I.T.A. Nos.2201, 2202, 2203, 2204, 2205, 2209, 2211, 2212, 2213, 2214 & 2215/Chny/2024] Cognizant Technology Solutions India Vs. The Deputy Commissioner Of Private Limited, No. 5/535, Okkiyam Income Tax, Thoraipakkam, Old Mahabalipuram Circle 1(1), Road, Chennai 600 097. Chennai. [Pan:Aaacd3312M] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri N.V. Balaji, Advocate ""थ" की ओर से/Respondent By : Shri C. Murugesan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 27.11.2024 & 03.12.2024 घोषणा की तारीख /Date Of Pronouncement : 22.01.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: These Eleven Appeals Filed By The Assessee Are Directed Against Separate, But, Identical Orders Passed By The Ld. Commissioner Of Income Tax (Appeals)-18, Chennai For The Assessment Years Mentioned Hereinabove. Out Of The Above Appeals, The Appeals In Ita Nos. 2201/Chny/2024, 2203/Chny/2024, 2205/Chny/2024, 2209/Chny/2024

For Appellant: Shri N.V. Balaji, AdvocateFor Respondent: Shri C. Murugesan, Addl. CIT
Section 133ASection 201Section 201(1)

assessee as “assessee in default” under section 201(1) of the of the Income Tax Act, 1961 [“Act” in short] and levying interest under section 201(1A) of the Act in the facts and circumstances of the case. 5. Brief facts relating to the case are that the assessee ... liable to deduct TDS. The Assessing Officer and the ld. CIT(A) correctly held that the “assessee is in default” and imposed interest under section 201(1A) of the Act. He placed reliance on the order of the ld. CIT(A) and prayed to dismiss the grounds of appeal raised

Cognizant Technology Solutions India Private Limited, Chennai vs. Deputy Commissioner of Income Tax, International Taxation 1(1), Chennai

In the result, all the appeals filed by the assessee are partly allowed and the Stay Applications filed by the assessee are dismissed

ITA 2214/CHNY/2024[2018-19]Status: DisposedITAT Chennai22 Jan 2025AY 2018-19

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. Nos.2201 & 2202, 2203 & 2204, 2205, 2209, 2211 & 2212, 2213 & 2214 & 2215/Chny/2024 िनधा"रण वष"/Assessment Years: 2016-17, 2017-18, 2020-21, 2021-22, 2015- 16, 2018-19 & 2019-20 & S.A. Nos. 65, 66, 67, 68, 69, 70, 71, 72, 73, 74 & 75/Chny/2024 [In I.T.A. Nos.2201, 2202, 2203, 2204, 2205, 2209, 2211, 2212, 2213, 2214 & 2215/Chny/2024] Cognizant Technology Solutions India Vs. The Deputy Commissioner Of Private Limited, No. 5/535, Okkiyam Income Tax, Thoraipakkam, Old Mahabalipuram Circle 1(1), Road, Chennai 600 097. Chennai. [Pan:Aaacd3312M] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri N.V. Balaji, Advocate ""थ" की ओर से/Respondent By : Shri C. Murugesan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 27.11.2024 & 03.12.2024 घोषणा की तारीख /Date Of Pronouncement : 22.01.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: These Eleven Appeals Filed By The Assessee Are Directed Against Separate, But, Identical Orders Passed By The Ld. Commissioner Of Income Tax (Appeals)-18, Chennai For The Assessment Years Mentioned Hereinabove. Out Of The Above Appeals, The Appeals In Ita Nos. 2201/Chny/2024, 2203/Chny/2024, 2205/Chny/2024, 2209/Chny/2024

For Appellant: Shri N.V. Balaji, AdvocateFor Respondent: Shri C. Murugesan, Addl. CIT
Section 133ASection 201Section 201(1)

assessee as “assessee in default” under section 201(1) of the of the Income Tax Act, 1961 [“Act” in short] and levying interest under section 201(1A) of the Act in the facts and circumstances of the case. 5. Brief facts relating to the case are that the assessee ... liable to deduct TDS. The Assessing Officer and the ld. CIT(A) correctly held that the “assessee is in default” and imposed interest under section 201(1A) of the Act. He placed reliance on the order of the ld. CIT(A) and prayed to dismiss the grounds of appeal raised

Cognizant Technology Solutions India Private Limited, Chennai vs. Deputy Commissioner of Income Tax, TDS Circle 1(1), Chennai

ITA 2213/CHNY/2024[2018-19]Status: DisposedITAT Chennai22 Jan 2025AY 2018-19
For Appellant: Shri N.V. Balaji, AdvocateFor Respondent: Shri C. Murugesan, Addl. CIT
Section 133ASection 201Section 201(1)

assessee as “assessee in default” under section 201(1) of the of the Income Tax Act, 1961 [“Act” in short] and levying interest under section 201(1A) of the Act in the facts and circumstances of the case. 5. Brief facts relating to the case are that the assessee ... liable to deduct TDS. The Assessing Officer and the Id. CIT(A) correctly held that the “assessee is in default” and imposed interest under section 201(1A) of the Act. He placed reliance on the order of the Id. CIT(A) and prayed to dismiss the grounds of appeal raised