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)

Arnon Builders and Developers Private Limited, Delhi vs. Deputy Commissioner of Income Tax, Circle 73 (1), Delhi

In the result, appeal of the assessee is allowed for statistical purposes

ITA 5263/DEL/2025[2016-17]Status: DisposedITAT Delhi20 Apr 2026AY 2016-17

Bench: Shri Mahavir Singh & Shri Manish Agarwal[Assessment Year : 2016-17] Arnon Builders & Developers Vs Dcit Pvt.Ltd., Unit No.101, 1St Floor, Circle-73(1), World Mark-2, Asset -8, Laxmi Nagar, Delhi Aerocity, Igi Airport, South West Delhi, Delhi-110037. Pan- Aafca9046G Appellant Respondent Appellant By Shri Rohit Jain, Adv. & Shri Saksham Singhal, Adv. Respondent By Ms. Ankush Kalra, Sr.Dr Date Of Hearing 20.04.2026 Date Of Pronouncement 20.04.2026 Order Per Manish Agarwal, Am : The Present Appeal Is Filed By Assessee Against The Order Dated 12.06.2025 Of Ld. Commissioner Of Income Tax (A)/ Addl/Jcit (A) Bhubaneswar [“Ld. Cit(A)”] In Appeal No. Nfac/2015-16/10241971 Passed U/S 250 Of The Income Tax Act, 1961 [“The Act”] Arising Out Of Order Dated 16.08.2023 Passed U/S 201(1)/201(1A) Of The Act Pertaining To Assessment Year 2016-17. 2. Heard The Parties & Perused The Material Available On Record. It Is Observed That In The Instant Case, The Ld. Cit(A) Has Dismissed The Appeal Of The Assessee By Observing That The Same Was Withdrawn By The Assessee. Whereas The Ld. Ar Submits That No Such Prayer Was Made For Withdrawal Of The Appeal Under Reference. Under These Circumstances, We Set Aside The Order Of Ld. Cit(A) & Remand The Matter Back To The File Of Ld. Cit(A) With Direction To Decide The Appeal Of The Assessee After Providing Reasonable Opportunity Of Being Heard To The Assessee. The Assessee Is Also Directed To Participate In Proceedings Before Ld. Cit(A) & File All The Relevant Details In Support Of The Grounds Of Appeal Taken. With These Directions, All The Grounds Of Appeal Of The Assessee Are Allowed For Statistical Purposes.

Section 201(1)Section 250

Refop India Company, New Delhi vs. Deputy Commissioner of Income Tax-Circle 78(1), New Delhi

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

ITA 3649/DEL/2025[2016-17]Status: DisposedITAT Delhi16 Apr 2026AY 2016-17

Bench: Shri Mahavir Singh & Shri Manish Agarwalrefop India Company Dy. Cit, Office No.6, 2Nd Floor, Circle-78(1), Sector-B, Pocket No.7, Plot Vs. Delhi. No.11, Vasant Kunj, Delhi-110070. Pan-Aaacr3007K (Appellant) (Respondent) Shri Ankit Sahni, Adv. Assessee By Department By Ms. Ankush Kalra, Sr. Dr Date Of Hearing 09/04/2026 Date Of Pronouncement 09/04/2026 O R D E R Per Manish Agarwal, Am: This Appeal Is Filed By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), Panaji [Cit(A) In Short], Dated 19.03.2025 In Appeal No. Nfac/2015-16/10240230 Arising Out Of The Order Passed U/S 201(1)/201(1A) Of The Income Tax Act, 1961 (The Act, In Short) For Assessment Year 2016-17. 2. At The Outset, From The Perusal Of The Orders Of Ld. Cit(A), It Is Observed That Ld. Cit(A) Has Passed The Impugned Orders Ex-Parte Without Providing Sufficient Opportunities Of Being Heard To The Assessee, Thereby Confirming The Order Of The Ao. The Assessee In Ground Of Appeal No. 1 Has Challenged The Orders Of Cit(A) For Not Providing Reasonable Opportunities Of Being Heard. Refop India Company Vs. Dcit 4. We Have Heard The Parties & Considered The Facts Of The Case. From The Perusal Of The Order Of Ld. Cit(A), It Is Observed That Only Three Opportunities Were Provided By Ld. Cit(A) To File Submissions & When The Assessee Failed To File Any Written Submission, Cit(A) Proceeded To Disposed-Off The Appeal Filed By The Assessee Exparte Sand Further Confirmed The Order Of Ao On Merits Also. It Is True That Assessee Did Not Comply To Any Of Notice Issued By Ld. Cit(A) & Did Not File Requisite Details/Documents In Support Of The Claim Made In Grounds Of Appeals.

Section 201(1)