Section 201 of the Income Tax Act

Income-tax Act, 2025: s.398

Section 201 of the Income-tax Act, 1961 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 is Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT (293 ITR 226), cited in 576 of the 1,566 judgments on BharatTax that turn on this section.

Leading authorities on Section 201

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
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 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.

CIT v. Associated Cement Companies Ltd.
172 ITR 257 · 1988 · Supreme Court
126
citing judgments

An expenditure is classified as either capital or revenue; the 'enduring benefit' test is a key criterion for this distinction, and income tax law does not generally recognize deferred revenue expenditure unless specifically provided.

State Lotteries & Ors. (2001) 249 ITR 186 and Ahmedabad Stamp Vendors Association v. Union of India
257 ITR 202 · 2002 · High Court
121
citing judgments

Supplementary commission forional or extra services does not fall within the ambit of Section 194H of the Income Tax Act, 1961. This may affect the applicability of certificates issued under Section 197.

CIT v. NHK Japan Broadcasting Corporation
305 ITR 137 · 2008 · High Court
96
citing judgments

When no specific statutory period of limitation exists, proceedings under Section 201(1) and 201(1A) of the Income-tax Act, particularly for payments to non-residents, must be initiated within a reasonable period of four years. This limitation also applies to consequential penalty proceedings under Section 271C.

Judgments on Section 201

M/S. Shree Shyamjee Constructions Private Limited, Bagdehi vs. ITO (TDS), Sambalpur

In the result, appeal of the assessee is allowed

ITA 215/CTK/2023[2017-18]Status: DisposedITAT Cuttack23 Apr 2024AY 2017-18

Bench: Shri George Mathan & Shri Manish Agarwalआयकर अऩीऱ सं/Ita No.215/Ctk/2023 (ननधाारण वषा / Assessment Year : 2017-2018) Shree Shyamji Constructions Vs Income Tax Officer(Tds), Pvt. Ltd., Sambalpur Main Road, Bagdehi, District : Jharsuguda-768220 Pan No. :Aajcs 0480 J (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. ननधााररती की ओर से /Assessee By : Shri M.K.Kedia, Ar राजस्व की ओर से /Revenue By : Shri S.C.Mohanty, Sr. Dr सुनवाई की तारीख / Date Of Hearing : 23/04/2024 घोषणा की तारीख/Date Of Pronouncement : 23/04/2024 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Assessee Against The Order Dated 07.04.2023, Passed By The Cit(A)-2, Bhubaneswar In Din & Document No.Itba/Apl/S/91/2023-24/1051928453(1) For The Assessment Year 2017-2018 2. It Was Submitted By The Ld. Ar That The Assessee Is In Construction Business Has Purchased Cement & Bricks From Ocl India Ltd. & Shivkashi Enterprises, Respectively. It Was Submitted That The Purchases Were On For Sales Meaning That The Bill, Purchase Cost Included The Cost Of Transportation. It Was The Submission That For The Purpose Of Billing The Supplier Had Shown Freight Separately But The Assessee Has Paid Consolidated Amount For The Purchase Of The Material. The Assessee Has Not Undertaken The Transportation Of The Cement Or Bricks On Its Own. It 2 Was The Submission That The Ao On The Ground That The Assessee Has Shown The Transportation Cost As Per The Bills Separately In Its Account, Had Held That The Assessee Had Not Deducted Tds As Per The Provisions Of Section 194C Of The Act & Consequently Levied A Liability U/S.201 Of The Act. It Was The Submission That This Liability Was Upheld By The Ld. Cit(A). Ld. Ar Placed Before Us A Copies Of The Bill For The Purchases, Which Are As Follows :-

For Appellant: Shri M.K.Kedia, ARFor Respondent: Shri S.C.Mohanty, Sr. DR
Section 194CSection 201