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)

Vansh Project Services, Kolkata vs. ITO, (TDS) 3(3), Kolkata

Appeal is dismissed

ITA 2297/KOL/2016[2007-08]Status: DisposedITAT Kolkata05 Oct 2018AY 2007-08

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2007-08 Vansh Project Services, V/S. Income Tax Officer 73, Purna Das Road, (Tds) Ward-3(3), 10B, Kolkata-29 Middleton Row, [Pan No.Aadfv 9729 L] Kolkata-71 .. अपीलाथ" /Appellant ""यथ"/Respondent Shri K.K. Goswami, Advocate अपीलाथ" क" ओर से/By Appellant Shri A. Bhattacherjee, Addl. Cit-Dr ""यथ" क" ओर से/By Respondent 09-07-2018 सुनवाई क" तार"ख/Date Of Hearing -10-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee’S Appeal For Assessment Year 2007-08 Arises Against The Commissioner Of Income Tax (Appeals)-24, Kolkata’S Order Dated 24.11.2015, Passed In Case No.659/Cit(A)-24/Kol/2011-12, In Proceedings U/S. 201(1)/201(1A) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Assessee’S Sole Substantive Ground Pleaded In The Instant Appeal Challenges Correctness Of The Cit(A)’S Action Partly Affirming The Assessing Authority’S Findings Holding It To Be An Assessee In Default For Short Deduction Of Tds Of ₹9,48,336/- Along With Interest Of ₹4,55,207;Totalling To ₹14,03,527/-; Respectively 201(1) & 201(1A) As Follows:- “4. The Ao Has Record The Short Deduction Of Tax Us. 194I Of R.9,48,336/ & Interest Thereon Of Rs.4,55,207/- Aggregating To Rs.14,03,537/-. The Order Was Passed Ex- Parte As The Appellant Did Not Respond To The Ao'S Notice. In Appeal The Grounds Have Been Raised Against The Said Levy Of Tax & Interest. The Submissions Contained In Sof Enclosed To Form No.35 On The Point Is As Under:-

Section 194Section 194CSection 194ISection 201(1)

Rnb Digitronix Pvt. Ltd., Kolkata vs. ITO (TDS), WD-59(1), Kolkata

ITA 1077/KOL/2016[2011-2012]Status: DisposedITAT Kolkata28 Sept 2018AY 2011-2012

Bench: Shri S.S.Godara & Shri, M. Balaganeshassessment Year :2011-12 Rnb Digitronix Pvt. Ltd., V/S. Income Tax Officer 53A, Free School Street, (Tds) Kolkata-16 Ward-59(1), Kolkata [Pan No.Calro 7433G] .. अपीलाथ" /Appellant ""यथ"/Respondent Shri Natban Lal Jha, Fca अपीलाथ" क" ओर से/By Appellant Shri P.K. Monda, Addl. Cit-Dr ""यथ" क" ओर से/By Respondent 28-08-2018 सुनवाई क" तार"ख/Date Of Hearing 28-09-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee’S Appeal For Assessment Year 2011-12 Is Directed Against The Commissioner Of Income Tax (Appeals)-24, Kolkata’S Order Dated 09.03.2016 Passed In Case No.4/Cit(A) 24/Kol/2014-15 U/S 154 Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. It Emerges At The Outset That The Cit(A)’S Has Passed His Lower Appellate Order Ex Part Whilst Affirming The Assessee’S Action Treating The Assessee To Be An Assessee In Default Qua Royalty Paid In The Relevant Previous Year Amounting To ₹24,97,318/- Liable For Tds Deduction @ 10% Coming To ₹2,49,732/-. He Has Coumputed Sec. 201(1) & 201(1A) Interest Of ₹2,49,732/- & ₹1.19,872/-; Respectively. Suffice To Say, Both The Learned Representatives Take Us To Cit(A)’S Order Para-4 Indicating The Assessee To Have Sought Adjournment On 18.02.2006 Followed By Similar Such

Section 154Section 201(1)Section 250(6)