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)

Punjab National Bank, New Shimla vs. DCIT(TDS), Panchkula

The appeal stand allowed

ITA 397/CHANDI/2024[2012-13]Status: DisposedITAT Chandigarh21 Apr 2025AY 2012-13

Bench: Hon’Ble Shri Rajpal Yadav & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./ Ita No.397/Chandi/2024 (िनधा"रणवष" / Assessment Year: 2012-13) Punjab National Dcit (Tds) Bankbramta Bhawan, Sector 2, बनाम/ Vs. Sector 1 Himachal Pradesh- Haryana. 171009. "थायीलेखासं./जीआइआरसं./Tan/Gir No. Ptlpl-2970-G (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Rakesh Kumar (Ca) – Ld. Ar ""थ"कीओरसे/Respondent By : Dr. Ranjit Kaur (Addl. Cit) – Ld. Sr.Dr सुनवाईकीतारीख/Date Of Hearing : 09-04-2025 घोषणाकीतारीख /Date Of Pronouncement : 21-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Assessee For Assessment Year (Ay) 2012-13 Arises Out Of An Order Of Learned Addl. / Joint Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Pune [Cit(A)] Dated 15-02-2024 Confirming Certain Demand Raised By Ld. Ao Against The Assessee-Bank U/S 201(1) / 201(1A) Of The Act Vide Order Dated 09-10-2018. 2. Upon Perusal Of Order Of Ld. Ao, It Could Be Seen That The Assessee Paid Interest To Certain State Government Entities Viz. Hp

For Appellant: Sh. Rakesh Kumar (CA) – Ld. ARFor Respondent: Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr.DR
Section 194ASection 194A(3)(iii)Section 201Section 201(1)

Archanaben Rajendrasingh Deval, Ahmedabad vs. The Income Tax Officer, TDS Ward-1, Ahmedabad

In the result, the appeal filed by the assessee is allowed, as indicated

ITA 1465/AHD/2024[2015-16]Status: DisposedITAT Ahmedabad02 Apr 2025AY 2015-16

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokarआयकर अपील सं/Ita No.1465/Ahd/2024 निर्धारण वर्ष / Assessment Year : 2015-16 Archanaben Rajendrasingh Deval बनाम / V/S. The Income Tax Officer Tds Ward-1, Ahmedabad – 380 014 42, Tirth Bhumi Co-Op. Society Near Dhara Soap Factory Nikol Gam Road, Nikol, Ahmedabad – 382 350 स्थायी लेखा सं./Pan: Ahzpd 2745 D (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) Assessee By : Shri Jaimin Shah, Ar Revenue By : Shri B.P. Srivastava, Sr.Dr सुनवाई की तारीख /Date Of Hearing : 01/04/2025 घोषणा की तारीख / Date Of Pronouncement: 02/04/2025 आदेश/Order Per Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee Against The Order Dated 30.03.2023 Passed By The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As “Ld. Cit(A)"], Under Section 250 Of The Income Tax Act, 1961 [Hereinafter Referred To As "The Act"], For The Assessment Year (Ay) 2015–16. The Appeal Arises From The Order Of The Income Tax Officer, Tds Ward-1, Ahmedabad

For Appellant: Shri Jaimin Shah, ARFor Respondent: Shri B.P. Srivastava, Sr.DR
Section 194ISection 201Section 201(1)Section 250