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

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)