Section 201 of the Income Tax Act

Fiscal statutes mandate strict compliance with regulatory requirements, especially for claiming benefits or exemption clauses. The doctrine of substantial compliance applies only when mandatory requirements are fully met, even if some directory requirements are not.

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.

A deductor who receives Form 15H or Form 15G under Section 197A is not deemed an 'assessee in default' under Section 201(1) for non-deduction of tax, as there is no obligation to verify the payee's actual taxable income.

If a statute or law prescribes that a thing must be done in a particular manner, then it must be done in that manner alone and in no other way. This principle mandates strict adherence to statutory procedures.

An employer is not an 'assessee in default' under Section 201(1) if short or non-deduction of TDS on employee salaries or exempt income was due to a bona fide belief. The Assessing Officer must compute TDS liability based on the employee's actual income, and no interest under Section 201(1A) is leviable when such a bona fide belief exists.

Payments for the use of equipment or copyrighted articles constitute royalty income under section 9(1)(vi) of the Income-tax Act, necessitating TDS deduction under section 195 and attracting disallowance under section 40(a)(i) for non-compliance.

A deductor cannot be treated as an 'assessee in default' under Section 201 of the Income Tax Act if the payee has already included the income in their return and paid tax on it. This principle applies due to the proviso to Section 201.

An expenditure is classified as either capital or revenue; the 'enduring benefit' test is a key criterion for this distinction, and income tax law does not generally recognize deferred revenue expenditure unless specifically provided.

For the provisions of Section 194H, along with Sections 201 and 201(1A), to be invoked for tax deduction at source on commission or brokerage, a principal-agency relationship is a prerequisite; transactions that are purely sales do not attract TDS under this section as they do not constitute 'commission'.