Section 194A

Section 194A — the law in short

What the courts have decided on section 194A, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Ghaziabad Development Authority v Union of India High CourtCuts both ways
  I failed to deduct TDS and the department has raised a demand on me for the tax itself plus surcharge under section 201. Can it do that?
  No, not on this judgment. The Allahabad High Court held that section 201 by itself imposes only interest under sub-section (1A) and penalty under sub-section (1); it carries no provision letting an income-tax authority demand the amount of TDS, or the tax, from a person who failed to deduct, unless the case answers section 201(2), where tax was deducted but not paid over. Surcharge on a TDS amount was struck down as well, tax deductible at source being different from tax on total income. What survives is interest under section 201(1A), from the date the tax was deductible to the date the tax was actually paid.
• Madhu Transport Co P Ltd v ITO ITATHelps taxpayerValidity unconfirmed
  I never filed Form 26A, but my payee did include the amount in its return and pay tax. Is the s.40(a)(ia) disallowance still good?
  No, on these facts. The Tribunal deleted the disallowance where the recipient had offered the interest in its return and paid tax on it, applying Hindustan Coca-Cola, and held that the absence of Form 26A could not defeat the claim for a year before rule 31ACB and Form 26A existed at all.
• Meridian Telesoft Ltd v ACIT ITATHelps taxpayerValidity unconfirmed
  What proof do I need that my payee declared the income and paid tax, to get the disallowance deleted?
  A chartered accountant's certificate showing the payee included the amount in its return and paid tax on it was accepted as sufficient. Once the payer is not deemed an assessee in default under the first proviso to s.201(1), s.40(a)(ia) is deemed to have been complied with and the disallowance goes.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.