Section 201(1A) of the Income Tax Act

Income-tax Act, 2025: s.398

Section 201(1A) 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(1A) is GE India Technology Centre Pvt. Ltd. v. CIT (327 ITR 456), cited in 663 of the 4,608 judgments on BharatTax that turn on this section.

Leading authorities on Section 201(1A)

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.

MALPE VISHWANATH ACHARYA AND OTHERS v. STATE OF MAHARASHTRA AND ANOTHER. 365 32
9 SCC 1 · 2018 · Supreme Court
533
citing judgments
254 ITR 121 (Guj) ITO v. Gujarat Narmada Valley Fertilizers Co. Ltd.
243 ITR 435 · 2000 · High Court
173
citing judgments
247 ITR 305 (Guj) CIT v. Nestle India Ltd.
140 ITR 832 · 1983 · High Court
172
citing judgments

An employer is not in default under section 201 if they have made a bona fide estimate of employee income and deducted tax at source based on that estimate.

Jagaran Prakashan Ltd. v. DCIT
345 ITR 288 · 2012 · High Court
164
citing judgments

A deductor cannot be treated as an assessee in default for failure to deduct tax at source if the recipient has already paid the income tax directly. The onus is on the deductor to prove that the recipient has paid the tax.

Chandra Kishore Jha v. Mahavir Prasad
8 SCC 266 · 1999 · Supreme Court
163
citing judgments

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.

CIT v. Kotak Securities Ltd.
340 ITR 333 · 2012 · High Court
161
citing judgments

A deductor's bonafide belief or reliance on a Tax Residency Certificate (TRC) can influence whether they are deemed an 'assessee in default' under Section 195 for failing to deduct tax at source on payments to non-residents. The decision clarifies the due diligence required when interpreting tax treaties and TRCs for TDS compliance.

CIT vs. Nicholas Piramal India Ltd (2008) 299 ITR 0356 (BOMBAY); CIT v. Semiconductor Complex Ltd.
282 ITR 263 · 2006 · High Court
159
citing judgments

An employer making a bona fide estimate of taxable salary income is acting in accordance with established legal precedent.

Verizon Communications Singapore Pte Ltd. v. ITO
361 ITR 575 · 2014 · High Court
156
citing judgments

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.

Judgments on Section 201(1A)

Mobile Trading & Investment P.Ltd, Mumbai vs. ACIT, CPC-TDS, Ghaziabad

The appeal stands partly allowed for statistical purposes

ITA 5895/MUM/2017[2008-09]Status: DisposedITAT Mumbai26 Jul 2021AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am (Hearing Through Video Conferencing Mode) 1. आयकरअपील िं./ I.T.A. No.5895/Mum/2017 (धििाारण वर्ा / Assessment Year: 2008-09) Mobile Trading & Investment Pvt. Ltd. Acit Cpc-Tds बिाम/ 141, Mittal Tower, C-Wing Aaykar Bhavan, Sector-3, Nariman Point, Vaishali, Ghaziabad(Up) Vs. Mumbai-400 021 Pin 201010 स्थायीलेखा िं./ जीआइआर िं./ Pan/Tan Aaccm-1419-N / Mumm-27615-A (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : Assessee By : Ms. Dinkle Haria, Ld. Ar Revenue By : Shri Bharat Andhale, Ld. Sr. Dr ुनवाई की तारीख/ : 01/06/2021 Date Of Hearing घोषणा की तारीख / : 26/07/2021 Date Of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal () 1.1 Aforesaid Appeal By Assessee For Assessment Year (Ay) 2008-09 Arises Out Of The Order Of Learned Commissioner Of Income-Tax (Appeals)-59, Mumbai [Cit(A)], Appeal No. Cit(A)59/It-133/Ito(Tds)- 1(3)(4)/2015-16 Dated 30/06/2017 On Following Grounds Of Appeal: - 1. Natural Justice: 1.1 In The Facts & The Circumstances Of The Case & In Law, Commissioner Of Income-Tax Appeals - 59, Mumbai, ["The Cit(A)"] Be Held As Held As Bad & Illegal, As The Same Is Framed In Breach Of The Principals Of Natural Justice.

For Appellant: Ms. Dinkle Haria, Ld. ARFor Respondent: Shri Bharat Andhale, Ld. Sr. DR
Section 200ASection 201

Bank of India, Kirkee Branch, Pune vs. Income-Tax Officer, (TDS) -1, Pune

In the result, the appeals are allowed

ITA 892/PUN/2019[2009-10]Status: DisposedITAT Pune30 Jun 2021AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Raviआयकर अपीऱ सं. / Ita No.888/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Shukrawar Peth Vs. Dcit(Tds), Branch Pune 1412, Shewde Lane, Shukrawar Peth, Pune – 411002 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.889/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Koregaon Park Branch Vs. Dcit(Tds), Ladkat Plaza, Koregaon Park, Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.890/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Camp Branch Vs. Dcit(Tds), 8A Dr. Coyaji Road, Camp Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.891/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Kothrud Branch Vs. Ito-Tds(1), 133/1, Behde Complex, Kothrud, Pune Pune – 411038 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.892/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Kirkee Branch Vs. Ito-Tds(1), Ganga Heights, Khadki Bazar, Pune Khadki, Pune – 411003 Pan: Aaacb0472C Appellant Respondent

Section 194ASection 201Section 201(1)Section 201(3)

Bank of India, Kothrud Branch, Pune vs. Income-Tax Officer, TDS (1), Pune

In the result, the appeals are allowed

ITA 891/PUN/2019[2009-10]Status: DisposedITAT Pune30 Jun 2021AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Raviआयकर अपीऱ सं. / Ita No.888/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Shukrawar Peth Vs. Dcit(Tds), Branch Pune 1412, Shewde Lane, Shukrawar Peth, Pune – 411002 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.889/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Koregaon Park Branch Vs. Dcit(Tds), Ladkat Plaza, Koregaon Park, Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.890/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Camp Branch Vs. Dcit(Tds), 8A Dr. Coyaji Road, Camp Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.891/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Kothrud Branch Vs. Ito-Tds(1), 133/1, Behde Complex, Kothrud, Pune Pune – 411038 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.892/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Kirkee Branch Vs. Ito-Tds(1), Ganga Heights, Khadki Bazar, Pune Khadki, Pune – 411003 Pan: Aaacb0472C Appellant Respondent

Section 194ASection 201Section 201(1)Section 201(3)

Bank of India, Camp Branch, Pune vs. Deputy Commissioner of Income-Tax, (TDS), Pune

In the result, the appeals are allowed

ITA 890/PUN/2019[2009-10]Status: DisposedITAT Pune30 Jun 2021AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Raviआयकर अपीऱ सं. / Ita No.888/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Shukrawar Peth Vs. Dcit(Tds), Branch Pune 1412, Shewde Lane, Shukrawar Peth, Pune – 411002 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.889/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Koregaon Park Branch Vs. Dcit(Tds), Ladkat Plaza, Koregaon Park, Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.890/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Camp Branch Vs. Dcit(Tds), 8A Dr. Coyaji Road, Camp Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.891/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Kothrud Branch Vs. Ito-Tds(1), 133/1, Behde Complex, Kothrud, Pune Pune – 411038 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.892/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Kirkee Branch Vs. Ito-Tds(1), Ganga Heights, Khadki Bazar, Pune Khadki, Pune – 411003 Pan: Aaacb0472C Appellant Respondent

Section 194ASection 201Section 201(1)Section 201(3)

Bank of India, Koregaon Park Branch, Pune vs. Deputy Commissioner of Income-Tax, (TDS), Pune

In the result, the appeals are allowed

ITA 889/PUN/2019[2009-10]Status: DisposedITAT Pune30 Jun 2021AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Raviआयकर अपीऱ सं. / Ita No.888/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Shukrawar Peth Vs. Dcit(Tds), Branch Pune 1412, Shewde Lane, Shukrawar Peth, Pune – 411002 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.889/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Koregaon Park Branch Vs. Dcit(Tds), Ladkat Plaza, Koregaon Park, Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.890/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Camp Branch Vs. Dcit(Tds), 8A Dr. Coyaji Road, Camp Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.891/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Kothrud Branch Vs. Ito-Tds(1), 133/1, Behde Complex, Kothrud, Pune Pune – 411038 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.892/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Kirkee Branch Vs. Ito-Tds(1), Ganga Heights, Khadki Bazar, Pune Khadki, Pune – 411003 Pan: Aaacb0472C Appellant Respondent

Section 194ASection 201Section 201(1)Section 201(3)

Bank of India, Shukrawar Peth, Pune vs. Deputy Commissioner of Income-Tax, (TDS), Pune

In the result, the appeals are allowed

ITA 888/PUN/2019[2009-10]Status: DisposedITAT Pune30 Jun 2021AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Raviआयकर अपीऱ सं. / Ita No.888/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Shukrawar Peth Vs. Dcit(Tds), Branch Pune 1412, Shewde Lane, Shukrawar Peth, Pune – 411002 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.889/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Koregaon Park Branch Vs. Dcit(Tds), Ladkat Plaza, Koregaon Park, Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.890/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Camp Branch Vs. Dcit(Tds), 8A Dr. Coyaji Road, Camp Pune Pune – 411001 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.891/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India –Kothrud Branch Vs. Ito-Tds(1), 133/1, Behde Complex, Kothrud, Pune Pune – 411038 Pan: Aaacb0472C Appellant Respondent आयकर अपीऱ सं. / Ita No.892/Pun/2019 निर्धारण वषा / Assessment Year : 2009-10 Bank Of India – Kirkee Branch Vs. Ito-Tds(1), Ganga Heights, Khadki Bazar, Pune Khadki, Pune – 411003 Pan: Aaacb0472C Appellant Respondent

Section 194ASection 201Section 201(1)Section 201(3)