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)

Air Transport Corporation (Assam) Private Limited, Chennai vs. ITO-TDS, W-1(3), Income Tax Office, TDS Ward

The appeal stand allowed in terms of our above order

ITA 825/CHNY/2023[2016-17]Status: DisposedITAT Chennai18 Oct 2023AY 2016-17

Bench: Hon’Ble Shri V. Durga Rao, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.825/Chny/2023 (िनधा"रण वष" / Assessment Year: 2016-17) M/S. Air Transport Corporation Ito-Tds बनाम (Assam) Pvt.Ltd. Ward-1(3), 1-D, Lakshmi Bhavan, Chennai. / Vs. No.609, Anna Salai, Chennai-600 006. "थायीलेखासं./जीआइआरसं./Pan/Tan Aaaca-5364-L / Cheao-1050-A (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओर से/ Appellant By : Shri Sunil Sharma, (Ca)-Ld.Ar ""थ" की ओर से/Respondent By : Shri P. Sajit Kumar (Jcit)-Ld.Dr सुनवाई की तारीख/Date Of Hearing : 16-10-2023 घोषणा की तारीख /Date Of Pronouncement : 18-10-2023 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Assessee For Assessment Year (Ay) 2016-17 Arises Out Of The Order Of Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Cit(A)] Dated 24-05-2023 In The Matter Of An Order Passed By Ld. Assessing Officer [Ao] U/S. 201 (1) / 201(1A) Of The Act On 21-03-2023 Raising Certain Demand Against The Assessee For Want Of Tds On Rental Payments. The Grounds Taken By The Assessee Are As Under:

For Appellant: Shri Sunil Sharma, (CA)-Ld.ARFor Respondent: Shri P. Sajit Kumar (JCIT)-Ld.DR
Section 143(3)Section 194Section 194ISection 201Section 201(1)Section 40

M/S. United India Insurance Co. Ltd., Chennai vs. ACIT TDS Circle-, Panaji

In the result, both the appeals filed by the assessee are allowed for statistical purposes

ITA 601/CHNY/2023[2014-15]Status: DisposedITAT Chennai18 Oct 2023AY 2014-15

Bench: Shri V. Durga Rao & Shri Manjunatha, G.आयकर अपील सं./I.T.A. Nos.600 & 601/Chny/2023 िनधा"रण वष"/Assessment Years: 2012-13 & 2014-15 United India Insurance Co. Limited, Vs. The Deputy Commissioner Of The Chief Manager, Cfac Department, Income Tax, Tds Circle, Head Office, United India Insurance Co. Panaji, Goa 403 001. Ltd., United India Nalanda, Door No.- 19, Ground Floor, 4Th Lane, Uthamar Gandhi Salai, Chennai 600 034. [Pan:Aaacu5552C] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : None ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 16.10.2023 घोषणा की तारीख /Date Of Pronouncement : 18.10.2023 आदेश /O R D E R Per V. Durga Rao: Both The Appeals Filed By The Assessee Are Directed Against Separate But Identical Order Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, Both Dated 17.02.2023 Relevant To The Assessment Years 2012-13 & 2014-15. 2. Both The Appeal Filed By The Assessee Are Delayed By 22 Days In Filing The Appeal, For Which, The Assessee Has Filed Petitions For 2

For Appellant: NoneFor Respondent: Shri AR V Sreenivasan, Addl. CIT
Section 133ASection 17(2)(iv)Section 201Section 201(1)

M/S. United India Insurance Co. Ltd., Chennai vs. ACIT TDS Circle-, Panaji

In the result, both the appeals filed by the assessee are allowed for statistical purposes

ITA 600/CHNY/2023[2012-13]Status: DisposedITAT Chennai18 Oct 2023AY 2012-13

Bench: Shri V. Durga Rao & Shri Manjunatha, G.आयकर अपील सं./I.T.A. Nos.600 & 601/Chny/2023 िनधा"रण वष"/Assessment Years: 2012-13 & 2014-15 United India Insurance Co. Limited, Vs. The Deputy Commissioner Of The Chief Manager, Cfac Department, Income Tax, Tds Circle, Head Office, United India Insurance Co. Panaji, Goa 403 001. Ltd., United India Nalanda, Door No.- 19, Ground Floor, 4Th Lane, Uthamar Gandhi Salai, Chennai 600 034. [Pan:Aaacu5552C] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : None ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 16.10.2023 घोषणा की तारीख /Date Of Pronouncement : 18.10.2023 आदेश /O R D E R Per V. Durga Rao: Both The Appeals Filed By The Assessee Are Directed Against Separate But Identical Order Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, Both Dated 17.02.2023 Relevant To The Assessment Years 2012-13 & 2014-15. 2. Both The Appeal Filed By The Assessee Are Delayed By 22 Days In Filing The Appeal, For Which, The Assessee Has Filed Petitions For 2

For Appellant: NoneFor Respondent: Shri AR V Sreenivasan, Addl. CIT
Section 133ASection 17(2)(iv)Section 201Section 201(1)