Section 201 - Consequences of failure to deduct or pay TDS

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....ility of deeming provision. * Any person, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- * (i) has furnished his return of income under section 139; * (ii) has taken into account such sum for computing income in such return of income; and * (iii) has paid the tax due on the income declared by him in such return of income, * and the person furnishes a certificate to this effect from a chartered accountant in such form as may be prescribed. No penalty under section 221 * No penalty shall be charged u/s 221....

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....e an assessee in default under the first proviso of section 201(1), then the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such resident. * Where the assessee failed to deduct tax u/s 194C, but it was found that the contractor had paid the advance tax and self-assessment tax over and above the tax payable, thereby not causing any loss to the revenue. Hence if the revenue is permitted to to levy interest u/s 201(1A) even if the tax is paid on due date, the revenue would derive undue benefit by getting interest on the amount of tax which had already been paid on the due date. Such position cannot be permitted. [CIT v Rishikesh Apartments Co-op. Hous....

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....nder section 201(1) where: * the deductor has deducted but not deposited the tax deducted at source, as this would be a case of defalcation of government dues, * the employer has failed to pay the tax wholly or partly, under section 192(1A), as the employee would not have paid tax on such perquisites, * the deductee is a non-resident as it may not be administratively possible to recover the tax from the non-resident. Important Notification & Circulars * Clarification regarding short deduction of TDS/TCS due to increase in rates of surcharge by Finance (No.2) Act, 2019 [ Circular No. 8/2020 Dated 13.04.2020 ] * the transaction was completed before the rates of enhanced surcharge were announced and the concerned deductee/payee is ....