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)

Tcg Lifesciences Pvt. Ltd., Kolkata vs. JCIT, R-59(TDS), Kolkata

In the result, both the appeals of the assessee are dismissed

ITA 1236/KOL/2016[2011-2012]Status: DisposedITAT Kolkata20 Jun 2018AY 2011-2012

Bench: Shri P.M. Jagtap, Am & Shri A.T. Varkey, Jm] I.T.A. Nos. 1234 & 1236/Kol/2016 Assessment Years: 2011-12 & 2012-13 M/S. Tcg Lifesciences Pvt. Ltd...............................………………………............................Appellant Block – Bn, Plot – 7, Sector – V, Salt Lake Electronics Complex, Kolkata – 700 091. [Pan : Calco 3085 F] Income Tax Officer……………………………………………….............................................Respondent Ward 59(4) (Tds), Kolkata, 10B, Middleton Row, Kolkata – 700 071. Appearances By: Shri A.K. Tibrewal, Fca Appearing On Behalf Of The Assessee. Shri Sallong Yaden, Addl. Cit Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : June 04, 2018 Date Of Pronouncing The Order : June 20, 2018 Order Per P.M. Jagtap, A.M. These Two Appeals Filed By The Assessee Are Directed Against The Common Order Of Ld. Cit(A) – 24, Kolkata Dated 04.03.2016 Whereby He Upheld The Orders Passed By The Assessing Officer Under Section 201(1)/201(1A) Of The Income Tax Act, 1961 Treating The Assessee As The Assessee In Default For A.Y. 2011-12 & 2012-13. 2. The Assessee In The Present Case Is A Company. A Survey Under Section 133A Was Carried Out In The Business Premises Of The Assessee Company On 13Th September, 2013. Subsequently, From The Relevant Details Furnished By The Assessee, The Amount Of Tax Deducted From The Payments Of Various Expenses Was Verified By The A.O. On Such Verification, He Found That Payments Of Rs. 29,51,709/- & Rs. 34,00,802/- Were Made By The Assessee Company To Different

Section 133ASection 201Section 201(1)

Tcg Lifesciences Pvt. Ltd., Kolkata vs. ITO, WD-59(4) (TDS), Kolkata

In the result, both the appeals of the assessee are dismissed

ITA 1234/KOL/2016[2011-2012]Status: DisposedITAT Kolkata20 Jun 2018AY 2011-2012

Bench: Shri P.M. Jagtap, Am & Shri A.T. Varkey, Jm] I.T.A. Nos. 1234 & 1236/Kol/2016 Assessment Years: 2011-12 & 2012-13 M/S. Tcg Lifesciences Pvt. Ltd...............................………………………............................Appellant Block – Bn, Plot – 7, Sector – V, Salt Lake Electronics Complex, Kolkata – 700 091. [Pan : Calco 3085 F] Income Tax Officer……………………………………………….............................................Respondent Ward 59(4) (Tds), Kolkata, 10B, Middleton Row, Kolkata – 700 071. Appearances By: Shri A.K. Tibrewal, Fca Appearing On Behalf Of The Assessee. Shri Sallong Yaden, Addl. Cit Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : June 04, 2018 Date Of Pronouncing The Order : June 20, 2018 Order Per P.M. Jagtap, A.M. These Two Appeals Filed By The Assessee Are Directed Against The Common Order Of Ld. Cit(A) – 24, Kolkata Dated 04.03.2016 Whereby He Upheld The Orders Passed By The Assessing Officer Under Section 201(1)/201(1A) Of The Income Tax Act, 1961 Treating The Assessee As The Assessee In Default For A.Y. 2011-12 & 2012-13. 2. The Assessee In The Present Case Is A Company. A Survey Under Section 133A Was Carried Out In The Business Premises Of The Assessee Company On 13Th September, 2013. Subsequently, From The Relevant Details Furnished By The Assessee, The Amount Of Tax Deducted From The Payments Of Various Expenses Was Verified By The A.O. On Such Verification, He Found That Payments Of Rs. 29,51,709/- & Rs. 34,00,802/- Were Made By The Assessee Company To Different

Section 133ASection 201Section 201(1)