Section 201(1) of the Income Tax Act

Income-tax Act, 2025: s.398

Section 201(1) falls under section 201 of the Income-tax Act, 1961, which corresponds to section 398 (Consequences of failure to deduct or pay or, collect or pay) of the Income-tax Act, 2025.

Read section 398 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 201(1) is Kourani v. Union OF India (83 Taxmann.com 137), cited in 1,708 of the 3,835 judgments on BharatTax that turn on this section.

Leading authorities on Section 201(1)

Kourani v. Union OF India
83 Taxmann.com 137 · 2017 · High Court
1,708
citing judgments

The fee under Section 234E for late filing of TDS/TCS statements cannot be levied retrospectively by processing an intimation under Section 200A for defaults occurring before the amendment allowing such processing.

Fateh Raj Singhvi & Ors. v. UOI
289 CTR 602 · 2016 · High Court
844
citing judgments

A fee under Section 234E cannot be levied or adjusted in an intimation under Section 200A for TDS statements pertaining to periods prior to June 1, 2015, as the enabling amendment to Section 200A(1)(c) came into effect only from that date.

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.

GE India Technology Centre Pvt. Ltd. v. CIT
327 ITR 456 · 2010 · Supreme Court
663
citing judgments

Tax must be deducted at source from payments made to a non-resident under Section 195 only if such payment is chargeable to tax in India. The Assessing Officer bears the onus to establish that the payments made are indeed chargeable to tax under the Income Tax Act.

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.

Gajanan Constructions v. DCIT
74 Taxmann.com 6 · 2016 · ITAT
465
citing judgments

Late fees under section 234E can only be levied prospectively from June 1, 2015. Levying late fees for periods prior to this date is not permissible.

Dundlod Shikshan Sansthan v. Union of India
63 Taxmann.com 243 · 2015 · High Court
397
citing judgments

The imposition of fees for late filing of TDS/TCS returns prior to the Finance Act, 2015 amendments was not illegal, and the Rajasthan High Court found no justification to interfere with such compensatory fees.

CIT v. Ansal Land Mark Township (P) Ltd.
377 ITR 635 · 2015 · High Court
369
citing judgments

The second proviso to Section 40(a)(ia), introduced by the Finance Act, 2012, is curative and applies retrospectively from April 1, 2005. Consequently, if the recipient of a payment has filed their return and paid taxes on the amount from which tax was not deducted at source, the payer's expenditure cannot be disallowed under Section 40(a)(ia).

Sree Narayana Guru Smaraka Sangam Upper Primary School v. Union of India and Others
392 ITR 457 · 2017 · High Court
217
citing judgments
137 (Guj.) IV. Qatalys Software Technologies (P.) Ltd. v. UOI
115 Taxmann.com 345 · 2020 · High Court
178
citing judgments

The Madras High Court has upheld the validity of the levy of fees under Section 234E and penalties under Section 271H, finding the charging provision to be Section 234E, with the power to levy existing from 01/07/2012.

Judgments on Section 201(1)

Bharat Sanchar Nigam Limited, Bhavnagar vs. DCIT, TDS Circle, Ahmedabad

In the result, appeal of the assessee is dismissed

ITA 2595/AHD/2017[2009-10]Status: DisposedITAT Ahmedabad01 May 2019AY 2009-10

Bench: Shri Rajpal Yadav & Shri Pradip Kumar Kediaआयकर अपील सं./ Ita No. 2595/Ahd/2017 "नधा"रण वष"/Assessment Year: 2009-10 Bharat Sanchar Nigam Ltd. Dcit, Tds Circle C/O. U.C. Maheshwari & Co. Vs Ahmedabad. Doshi Chamber Mehta Market Surendranagar 363 001 Tan : Ahmbo 3197 F अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : None Revenue By : Shri S.K. Dev, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 01/05/2019 घोषणा क" तार"ख /Date Of Pronouncement : 01/05/2019 O R D E R Per Rajpal Yadav: Assessee Is In Appeal Before The Tribunal Against Order Of The Ld.Cit(A)-8, Ahmedabad Dated 11.9.2017 Passed For The Asstt.Year 2009-10 Challenging Order Passed Under Section 201(1)/201(1A) Of The Income Tax Act, 1961. 2. None Appeared On Behalf Of The Assessee. Appeal Was Presented On 24.11.2017. Appeal Was Listed For Hearing On Two Occasions. However, None Remained Present On Behalf Of The Assessee. Assessee Has Not Filed Any Adjournment Application Nor Intimated About Reasons For His Non-Appearance In The Matter. In View Of This, It Is Presumed That The Assessee Is Not Interested In Prosecuting The Appeal Before The Tribunal, Therefore, Appeal Of The Assessee Stand Dismissed For Want Of Prosecution Following Decision Of The Itat, Delhi Bench In Cit Vs. Multiplan India Pvt. Ltd., 38 Itd 320 (Delhi).

For Appellant: NoneFor Respondent: Shri S.K. Dev, Sr.DR
Section 201(1)