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)

Kolkata Metro Rail Corporation Ltd., Kolkata vs. DCIT, (TDS), Cir-58, Kolkata

In the result, the appeal filed by the assessee, is dismissed

ITA 383/KOL/2016[2012-2013]Status: DisposedITAT Kolkata17 Jan 2018AY 2012-2013

Bench: Shri N.V. Vasudevan, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.383/Kol/2016 (िनधा"रणवष" / Assessment Year: 2012-13) Kolkata Metro Rail Vs. Dcit(Tds), Cir-58, Kolkata Corporation Ltd. 10B, Middleton Row, Kolkata – 700 016. Hrbc Office Complex, Kmrcl Bhawan, Munshi Premchand Sarani, Kolkata – 700 021. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Calko 6157 E (Appellant) .. (Respondent) Appellant By :Shri B.L. Singhai, Fca Respondent By:Shri Soumyajit Dasgupta, Addl. Cit सुनवाईकीतारीख/ Date Of Hearing : 22/11/2017 घोषणाकीतारीख/Date Of Pronouncement : 17/01/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year 2012-13, Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)–24, Kolkata, In Appeal No.1327/Cit(A)- 24/Kol/2014-15, Dated 18.01.2016, Which In Turn Arises Out Of An Order Passed By The Ao U/S.201(1)/201(1A) Of The Income Tax Act 1961 (Hereinafter Referred To As The ‘Act’), Dated 28.03.2014. 2.The Assessee Has Raised The Following Grounds Of Appeal: “1) For The Order Passed By The Ld. Cit(A)-24, Kol Is Bad In Law & As Well As Facts. 2) Further, Ld. Cit(A) Erred Not In Directing The Assessing Officer To Reduce The Demand From Rs.52,22,641/- To Rs.3,73,293/-. 3) For The Ld. Cit(A) Erred In Upholding The Demand Of Rs.3,73,293/- Without Appreciating Facts Of The Case. 4) For The Appellant Prays For The Right To Put, Add & Alter Additional Grounds At The Time Of Appeal.”

For Appellant: Shri B.L. Singhai, FCAFor Respondent: Shri Soumyajit Dasgupta, Addl. CIT
Section 201Section 201(1)