TDS default under section 201 was rejected where tax was not deductible or had already been deducted and paid.

The Tribunal found that tax was not required to be deducted in several instances and, where deduction was required, the tax had already been deducted and paid to the Central Government. It also accepted that supporting electronic responses and issue-wise explanations were already on record, and declined to remand the matter for fresh verification because the factual material was complete and the dispute was old. The assessee was therefore not liable to be treated as an assessee in default, and the demand under section 201(1) and section 201(1A) was annulled.

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Issues: Whether the assessee could be treated as an assessee in default under section 201(1) and section 201(1A) of the Income-tax Act, 1961 for the alleged non-deduction of tax at source, and whether the order making such demand deserved to be annulled.

Analysis: The material placed before the Tribunal showed issue-wise explanations supported by the paper book. The Tribunal found that in several instances tax at source was not required to be deducted, and where deduction was required, the tax had in fact been deducted and paid to the credit of the Central Government. The Tribunal also accepted that the lower appellate record reflected filing of supporting electronic responses covering the disputes raised in the demand order. In view of the complete factual material already on record and the age of the matter, the Tribunal declined to remand the case for fresh verification.

Conclusion: The assessee was held not liable to be treated as an assessee in default, and the order passed under section 201(1) and section 201(1A) of the Income-tax Act, 1961 was annulled.

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