CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · PART A — GENERAL
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · PART A — GENERAL
Section 191 — Direct payment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. The residual provision preserving the assessee's primary liability to pay tax directly.
Finance Act, 2026: No amendment. Section 191 stands on the Finance Act, 2025 base. (Sub-section (2), the ESOP/start-up deferral, was inserted by the Finance Act, 2020 w.e.f. AY 2021-22; the Explanation pre-dates it.)
Function: Provides that where the Chapter makes no provision for deduction at the time of payment, or where tax has not in fact been deducted, the income-tax is payable by the assessee direct. Sub-section (2) defers direct payment of tax on specified-security/sweat-equity perquisites allotted by an eligible start-up. The Explanation deems a defaulting deductor an “assessee in default” under s. 201(1) only where the assessee has also failed to pay directly.
Litigation profile: Heavily litigated at the s. 191/201/205 interface — chiefly on when a deductor may be treated as an assessee in default, and on the bar against recovering from the assessee tax that has already been deducted at source. Strong High Court and Tribunal authority; the Supreme Court has spoken on the core principles.
A. SECTION COMMENTARY
Section 191 is the counterpoint to section 190. While section 190 advances the point of collection through the deduction, collection and advance-payment machinery, section 191 preserves the assessee's own, primary liability for two residual situations: (i) income for which Chapter XVII makes no provision for deduction at the time of payment, and (ii) any case where income-tax has not, in fact, been deducted in accordance with the Chapter. In both, “income-tax shall be payable by the assessee direct.” The section thus confirms that the TDS regime is an alternative and vicarious mode of collection layered on the charge — it does not displace the assessee's obligation, which revives (or never recedes) wherever the deduction machinery does not in fact operate.
Sub-section (2) — deferred direct payment on start-up ESOPs
Sub-section (2), inserted by the Finance Act, 2020 with effect from assessment year 2021-22, addresses the cash-flow hardship of employees of eligible start-ups taxed on equity-based perquisites. Where the assessee's income includes a perquisite of the nature specified in clause (vi) of sub-section (2) of section 17 — specified security or sweat equity shares — allotted or transferred, directly or indirectly, by the current employer being an eligible start-up referred to in section 80-IAC, the income-tax on that perquisite is payable directly by the assessee within fourteen days of the earliest of three dates: the expiry of forty-eight months from the end of the relevant assessment year; the date of sale of the security or share; or the date the assessee ceases to be the employee of the employer who allotted it. The provision dovetails with the parallel deferral of the deduction obligation in section 192(1C); its case law is still developing, and (consistent with the candour rule) no significant judicial construction of section 191(2) has yet emerged.
The Explanation — deductor deemed an “assessee in default”
The Explanation is a deeming provision of considerable practical importance. It declares, for the removal of doubts, that a person required to deduct tax under the Act — including a principal officer of a company and an employer falling within section 192(1A) — who does not deduct, or having deducted fails to pay, or does not pay, the whole or any part of the tax, “and where the assessee has also failed to pay such tax directly”, is, without prejudice to any other consequences, deemed to be an assessee in default within the meaning of section 201(1) in respect of such tax. The conjunctive structure is decisive: the deductor's default and the assessee's failure to pay directly are cumulative conditions. It follows that a deductor cannot be treated as an assessee in default in respect of the tax itself unless and until it is shown that the payee/assessee has also failed to discharge the liability directly — the foundation of the line of authority beginning with Hindustan Coca-Cola Beverages and developed in Jagran Prakashan.
Section 191 must be read with three neighbouring provisions. Section 201 imposes the “assessee in default” consequence and the compensatory interest of section 201(1A). Section 202 confirms that deduction is “without prejudice to any other mode of recovery”, so that the existence of TDS machinery does not bar direct collection from the assessee under section 191. Section 205, conversely, bars any direct demand on the assessee “to the extent to which tax has been deducted from that income” — a bar that operates the moment deduction is established and is, on the weight of High Court authority, independent of whether the deductor has actually deposited the tax with the Government. The combined effect is a careful allocation of risk: where tax is genuinely not deducted, the assessee pays direct (s. 191); where it is deducted but not deposited, the loss is recovered from the deductor (ss. 201/201(1A)), not from the assessee (s. 205).
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (Finance Act, 2025 base; unaffected by the Finance Act, 2026), is set out below.
191. (1) In the case of income in respect of which provision is not made under this Chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee direct.
(2) For the purposes of paying income-tax directly by the assessee under sub-section (1), if the income of the assessee in any assessment year, beginning on or after the 1st day of April, 2021, includes income of the nature specified in clause (vi) of sub-section (2) of section 17 and such specified security or sweat equity shares referred to in the said clause are allotted or transferred directly or indirectly by the current employer, being an eligible start-up referred to in section 80-IAC, the income-tax on such income shall be payable by the assessee within fourteen days—
(i) after the expiry of forty-eight months from the end of the relevant assessment year; or
(ii) from the date of the sale of such specified security or sweat equity share by the assessee; or
(iii) from the date of the assessee ceasing to be the employee of the employer who allotted or transferred him such specified security or sweat equity share, whichever is the earliest.
Explanation.—For the removal of doubts, it is hereby declared that if any person including the principal officer of a company,—
(a) who is required to deduct any sum in accordance with the provisions of this Act; or
(b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or after so deducting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this Act, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default within the meaning of sub-section (1) of section 201, in respect of such tax.
C. AUTHORITIES
Cluster 1 — Primary liability of the assessee; TDS is an alternative, not exclusive, mode
CIT v. Eli Lilly & Co. (India) (P) Ltd. (2009) 312 ITR 225 (SC)
Issue. Nature of the TDS scheme and the position of the assessee whose tax is, or is not, deducted.
Held. The deduction provisions form part of an integrated machinery code; TDS is a mode of collecting tax that is otherwise charged on the recipient. Where the machinery does not operate, the charge on the recipient is unaffected.
Relevance. Confirms the premise of s. 191(1): the assessee's liability under the charge survives independently of the deduction machinery and falls to be paid direct where deduction is not provided for or not made.
Transmission Corporation of A.P. Ltd. v. CIT (1999) 239 ITR 587 (SC)
Issue. Effect of the tentative character of TDS on the assessee's ultimate liability.
Held. TDS is a tentative collection subject to regular assessment; the recipient's liability is finally determined in assessment, where credit for any tax collected is given.
Relevance. Supports the s. 191 scheme that final liability rests on the assessee and is worked out in the assessment, the deduction being only an instalment against it.
ITO v. Ch. Atchaiah (1996) 218 ITR 239 (SC)
Issue. Identification of the person liable to be charged.
Held. The Assessing Officer is bound to tax the right person and the right person alone.
Relevance. Locates the “assessee” for the purposes of direct payment under s. 191(1): the liability to pay direct is that of the person on whom the charge falls.
Cluster 2 — The Explanation / s. 201: deductor not an “assessee in default” unless the payee has also failed to pay
Issue. Whether the deductor can be required to pay tax under s. 201(1) where the recipient has already paid the tax on the income.
Held. Once the deductee has paid the tax, recovery of the same tax from the deductor under s. 201(1) cannot be enforced (CBDT Circular No. 275/201/95-IT(B), 29-1-1997); the deductor's exposure is then confined to interest under s. 201(1A) up to the date of the payee's payment.
Relevance. The leading authority on the Explanation to s. 191: the deductor is not an assessee in default in respect of the tax where the assessee has discharged it directly.
Issue. Whether a deductor can be treated as an assessee in default for the tax without first establishing that the payee failed to pay directly.
Held. Reading the Explanation to s. 191 with s. 201, the deductor cannot be treated as an assessee in default “till it is found that the assessee has also failed to pay such tax directly”; the onus is on the Revenue to show the payee has not paid. A defaulting deductor is liable to interest and penalty, but not to the tax itself once the payee has paid.
Relevance. The principal High Court exposition of the Explanation; marks the “paradigm shift” in invoking s. 201(1) and is the template applied by the Tribunals.
Ramakrishna Vedanta Math v. ITO (ITAT Kolkata) (ITAT)
Issue. Order under s. 201 treating the assessee in default for non-deduction under s. 194C without enquiry into the recipients' payment of tax.
Held. Following Jagran Prakashan, non-payment of tax by the recipient is a condition precedent to invoking s. 201(1); the onus is on the Assessing Officer to establish it, and the deductor need only furnish the information about the recipients that it is obliged to maintain under law.
Relevance. Tribunal-level application of the Explanation to s. 191, showing how the burden operates in assessment practice.
Cluster 3 — Section 205 bar: no direct demand on the assessee for tax deducted at source (even if the deductor has not deposited it)
Issue. Whether tax deducted by an employer but not deposited with the Government can be recovered from the employee.
Held. Section 205 prevents double taxation: once tax is deducted at source, the assessee cannot be called upon to pay it again; the bar operates as soon as deduction is established and is wholly irrelevant whether the deducted tax was paid into the Treasury. The Revenue's remedy lies against the deductor under ss. 201/221/276B.
Relevance. Defines the s. 191/205 boundary: where tax has actually been deducted, direct payment under s. 191 cannot be demanded of the assessee.
Issue. Credit/recovery where an airline-employer deducted TDS from a pilot's salary but failed to deposit it.
Held. Section 205 bars demand on the employee to the extent tax was deducted; its operation does not depend on credit being given under s. 199 — what matters is that the amount was deducted from the income. The Department must proceed against the employer under s. 201.
Relevance. Recent, squarely-on-point reaffirmation that the s. 205 bar shields the assessee from direct payment under s. 191 once deduction is shown.
Issue. Whether credit must be given, and direct demand withdrawn, where the deductor issued Form 16/16A but defaulted in depositing the TDS.
Held. Where the deductor has deducted tax and issued the certificate, the deductee must be given credit and cannot be denied it, or subjected to demand, on account of the deductor's default; the s. 205 bar applies.
Relevance. Reinforces, with the certificate as the trigger, that the s. 191 direct-payment liability does not extend to amounts already deducted at source.
Issue. Demand under s. 221(1) raised on a deductee for TDS deducted by the employer but not reflected/deposited.
Held. In view of s. 205, the deductee who produces the TDS certificate cannot be denied credit or saddled with demand for the deducted tax; any default in deposit or reporting is to be pursued against the deductor.
Relevance. Adds to the consistent High Court line that the s. 205 bar caps the reach of direct payment under s. 191.
Sub-section (2), the Finance Act, 2020 deferral for specified-security/sweat-equity perquisites from eligible start-ups, has generated little reported litigation to date. The provision operates mechanically with section 192(1C) (deferred deduction) and section 156(2) (deferred demand). Pending judicial construction, advisers should apply the statutory trigger dates strictly — fourteen days from the earliest of the forty-eight-month outer limit, sale of the security, or cessation of employment.
Practice note
The recurring practical question is the correct respondent for an unpaid TDS amount. The settled position is: (a) if tax was not deducted at all and the payee has not paid, the deductor may be treated as an assessee in default under the Explanation to s. 191 read with s. 201(1) — but only after the Revenue shows the payee has not paid (Jagran Prakashan; Ramakrishna Vedanta Math); (b) if tax was deducted but not deposited, the loss is recovered from the deductor under ss. 201/201(1A)/221, and the assessee is protected by s. 205 (Yashpal Sahni; Sonavane; Devarsh Patel; Sumit Rajani); and (c) where the payee has already paid the tax, it cannot be collected again from the deductor, whose liability is then limited to interest (Hindustan Coca-Cola). Section 191(1) operates only in the residual space these rules leave open — genuine non-deduction where the assessee's own liability is undischarged.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the Income-tax Act, 1961 as amended by the Finance Act, 2025 (no Finance Act, 2026 amendment to Part A of Chapter XVII). Citations have been web-verified; readers should consult the official reports before relying on any authority in proceedings.
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · PART A — GENERAL
Section 191 — Direct payment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. The residual provision preserving the assessee's primary liability to pay tax directly.
Finance Act, 2026: No amendment. Section 191 stands on the Finance Act, 2025 base. (Sub-section (2), the ESOP/start-up deferral, was inserted by the Finance Act, 2020 w.e.f. AY 2021-22; the Explanation pre-dates it.)
Function: Provides that where the Chapter makes no provision for deduction at the time of payment, or where tax has not in fact been deducted, the income-tax is payable by the assessee direct. Sub-section (2) defers direct payment of tax on specified-security/sweat-equity perquisites allotted by an eligible start-up. The Explanation deems a defaulting deductor an “assessee in default” under s. 201(1) only where the assessee has also failed to pay directly.
Litigation profile: Heavily litigated at the s. 191/201/205 interface — chiefly on when a deductor may be treated as an assessee in default, and on the bar against recovering from the assessee tax that has already been deducted at source. Strong High Court and Tribunal authority; the Supreme Court has spoken on the core principles.
A. SECTION COMMENTARY
Section 191 is the counterpoint to section 190. While section 190 advances the point of collection through the deduction, collection and advance-payment machinery, section 191 preserves the assessee's own, primary liability for two residual situations: (i) income for which Chapter XVII makes no provision for deduction at the time of payment, and (ii) any case where income-tax has not, in fact, been deducted in accordance with the Chapter. In both, “income-tax shall be payable by the assessee direct.” The section thus confirms that the TDS regime is an alternative and vicarious mode of collection layered on the charge — it does not displace the assessee's obligation, which revives (or never recedes) wherever the deduction machinery does not in fact operate.
Sub-section (2) — deferred direct payment on start-up ESOPs
Sub-section (2), inserted by the Finance Act, 2020 with effect from assessment year 2021-22, addresses the cash-flow hardship of employees of eligible start-ups taxed on equity-based perquisites. Where the assessee's income includes a perquisite of the nature specified in clause (vi) of sub-section (2) of section 17 — specified security or sweat equity shares — allotted or transferred, directly or indirectly, by the current employer being an eligible start-up referred to in section 80-IAC, the income-tax on that perquisite is payable directly by the assessee within fourteen days of the earliest of three dates: the expiry of forty-eight months from the end of the relevant assessment year; the date of sale of the security or share; or the date the assessee ceases to be the employee of the employer who allotted it. The provision dovetails with the parallel deferral of the deduction obligation in section 192(1C); its case law is still developing, and (consistent with the candour rule) no significant judicial construction of section 191(2) has yet emerged.
The Explanation — deductor deemed an “assessee in default”
The Explanation is a deeming provision of considerable practical importance. It declares, for the removal of doubts, that a person required to deduct tax under the Act — including a principal officer of a company and an employer falling within section 192(1A) — who does not deduct, or having deducted fails to pay, or does not pay, the whole or any part of the tax, “and where the assessee has also failed to pay such tax directly”, is, without prejudice to any other consequences, deemed to be an assessee in default within the meaning of section 201(1) in respect of such tax. The conjunctive structure is decisive: the deductor's default and the assessee's failure to pay directly are cumulative conditions. It follows that a deductor cannot be treated as an assessee in default in respect of the tax itself unless and until it is shown that the payee/assessee has also failed to discharge the liability directly — the foundation of the line of authority beginning with Hindustan Coca-Cola Beverages and developed in Jagran Prakashan.
Interface with sections 201, 202 and 205
Section 191 must be read with three neighbouring provisions. Section 201 imposes the “assessee in default” consequence and the compensatory interest of section 201(1A). Section 202 confirms that deduction is “without prejudice to any other mode of recovery”, so that the existence of TDS machinery does not bar direct collection from the assessee under section 191. Section 205, conversely, bars any direct demand on the assessee “to the extent to which tax has been deducted from that income” — a bar that operates the moment deduction is established and is, on the weight of High Court authority, independent of whether the deductor has actually deposited the tax with the Government. The combined effect is a careful allocation of risk: where tax is genuinely not deducted, the assessee pays direct (s. 191); where it is deducted but not deposited, the loss is recovered from the deductor (ss. 201/201(1A)), not from the assessee (s. 205).
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (Finance Act, 2025 base; unaffected by the Finance Act, 2026), is set out below.
191. (1) In the case of income in respect of which provision is not made under this Chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee direct.
(2) For the purposes of paying income-tax directly by the assessee under sub-section (1), if the income of the assessee in any assessment year, beginning on or after the 1st day of April, 2021, includes income of the nature specified in clause (vi) of sub-section (2) of section 17 and such specified security or sweat equity shares referred to in the said clause are allotted or transferred directly or indirectly by the current employer, being an eligible start-up referred to in section 80-IAC, the income-tax on such income shall be payable by the assessee within fourteen days—
(i) after the expiry of forty-eight months from the end of the relevant assessment year; or
(ii) from the date of the sale of such specified security or sweat equity share by the assessee; or
(iii) from the date of the assessee ceasing to be the employee of the employer who allotted or transferred him such specified security or sweat equity share, whichever is the earliest.
Explanation.—For the removal of doubts, it is hereby declared that if any person including the principal officer of a company,—
(a) who is required to deduct any sum in accordance with the provisions of this Act; or
(b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or after so deducting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this Act, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default within the meaning of sub-section (1) of section 201, in respect of such tax.
C. AUTHORITIES
Cluster 1 — Primary liability of the assessee; TDS is an alternative, not exclusive, mode
CIT v. Eli Lilly & Co. (India) (P) Ltd. (2009) 312 ITR 225 (SC)
Issue. Nature of the TDS scheme and the position of the assessee whose tax is, or is not, deducted.
Held. The deduction provisions form part of an integrated machinery code; TDS is a mode of collecting tax that is otherwise charged on the recipient. Where the machinery does not operate, the charge on the recipient is unaffected.
Relevance. Confirms the premise of s. 191(1): the assessee's liability under the charge survives independently of the deduction machinery and falls to be paid direct where deduction is not provided for or not made.
Transmission Corporation of A.P. Ltd. v. CIT (1999) 239 ITR 587 (SC)
Issue. Effect of the tentative character of TDS on the assessee's ultimate liability.
Held. TDS is a tentative collection subject to regular assessment; the recipient's liability is finally determined in assessment, where credit for any tax collected is given.
Relevance. Supports the s. 191 scheme that final liability rests on the assessee and is worked out in the assessment, the deduction being only an instalment against it.
ITO v. Ch. Atchaiah (1996) 218 ITR 239 (SC)
Issue. Identification of the person liable to be charged.
Held. The Assessing Officer is bound to tax the right person and the right person alone.
Relevance. Locates the “assessee” for the purposes of direct payment under s. 191(1): the liability to pay direct is that of the person on whom the charge falls.
Cluster 2 — The Explanation / s. 201: deductor not an “assessee in default” unless the payee has also failed to pay
Hindustan Coca-Cola Beverages (P) Ltd. v. CIT (2007) 293 ITR 226 (SC)
Issue. Whether the deductor can be required to pay tax under s. 201(1) where the recipient has already paid the tax on the income.
Held. Once the deductee has paid the tax, recovery of the same tax from the deductor under s. 201(1) cannot be enforced (CBDT Circular No. 275/201/95-IT(B), 29-1-1997); the deductor's exposure is then confined to interest under s. 201(1A) up to the date of the payee's payment.
Relevance. The leading authority on the Explanation to s. 191: the deductor is not an assessee in default in respect of the tax where the assessee has discharged it directly.
Jagran Prakashan Ltd. v. DCIT (TDS) (2012) 345 ITR 288 (Allahabad HC)
Issue. Whether a deductor can be treated as an assessee in default for the tax without first establishing that the payee failed to pay directly.
Held. Reading the Explanation to s. 191 with s. 201, the deductor cannot be treated as an assessee in default “till it is found that the assessee has also failed to pay such tax directly”; the onus is on the Revenue to show the payee has not paid. A defaulting deductor is liable to interest and penalty, but not to the tax itself once the payee has paid.
Relevance. The principal High Court exposition of the Explanation; marks the “paradigm shift” in invoking s. 201(1) and is the template applied by the Tribunals.
Ramakrishna Vedanta Math v. ITO (ITAT Kolkata) (ITAT)
Issue. Order under s. 201 treating the assessee in default for non-deduction under s. 194C without enquiry into the recipients' payment of tax.
Held. Following Jagran Prakashan, non-payment of tax by the recipient is a condition precedent to invoking s. 201(1); the onus is on the Assessing Officer to establish it, and the deductor need only furnish the information about the recipients that it is obliged to maintain under law.
Relevance. Tribunal-level application of the Explanation to s. 191, showing how the burden operates in assessment practice.
Cluster 3 — Section 205 bar: no direct demand on the assessee for tax deducted at source (even if the deductor has not deposited it)
Yashpal Sahni v. Rekha Hajarnavis, ACIT (2007) 293 ITR 539 (Bombay HC)
Issue. Whether tax deducted by an employer but not deposited with the Government can be recovered from the employee.
Held. Section 205 prevents double taxation: once tax is deducted at source, the assessee cannot be called upon to pay it again; the bar operates as soon as deduction is established and is wholly irrelevant whether the deducted tax was paid into the Treasury. The Revenue's remedy lies against the deductor under ss. 201/221/276B.
Relevance. Defines the s. 191/205 boundary: where tax has actually been deducted, direct payment under s. 191 cannot be demanded of the assessee.
Kartik Vijaysinh Sonavane v. DCIT (2022) 440 ITR 11 (Gujarat HC)
Issue. Credit/recovery where an airline-employer deducted TDS from a pilot's salary but failed to deposit it.
Held. Section 205 bars demand on the employee to the extent tax was deducted; its operation does not depend on credit being given under s. 199 — what matters is that the amount was deducted from the income. The Department must proceed against the employer under s. 201.
Relevance. Recent, squarely-on-point reaffirmation that the s. 205 bar shields the assessee from direct payment under s. 191 once deduction is shown.
Devarsh Pravinbhai Patel v. ACIT (2018) 102 taxmann.com 26 (Gujarat HC)
Issue. Whether credit must be given, and direct demand withdrawn, where the deductor issued Form 16/16A but defaulted in depositing the TDS.
Held. Where the deductor has deducted tax and issued the certificate, the deductee must be given credit and cannot be denied it, or subjected to demand, on account of the deductor's default; the s. 205 bar applies.
Relevance. Reinforces, with the certificate as the trigger, that the s. 191 direct-payment liability does not extend to amounts already deducted at source.
Sumit Devendra Rajani v. ACIT (2014) 49 taxmann.com 31 (Gujarat HC)
Issue. Demand under s. 221(1) raised on a deductee for TDS deducted by the employer but not reflected/deposited.
Held. In view of s. 205, the deductee who produces the TDS certificate cannot be denied credit or saddled with demand for the deducted tax; any default in deposit or reporting is to be pursued against the deductor.
Relevance. Adds to the consistent High Court line that the s. 205 bar caps the reach of direct payment under s. 191.
Candour note — section 191(2) (start-up ESOP deferral)
Sub-section (2), the Finance Act, 2020 deferral for specified-security/sweat-equity perquisites from eligible start-ups, has generated little reported litigation to date. The provision operates mechanically with section 192(1C) (deferred deduction) and section 156(2) (deferred demand). Pending judicial construction, advisers should apply the statutory trigger dates strictly — fourteen days from the earliest of the forty-eight-month outer limit, sale of the security, or cessation of employment.
Practice note
The recurring practical question is the correct respondent for an unpaid TDS amount. The settled position is: (a) if tax was not deducted at all and the payee has not paid, the deductor may be treated as an assessee in default under the Explanation to s. 191 read with s. 201(1) — but only after the Revenue shows the payee has not paid (Jagran Prakashan; Ramakrishna Vedanta Math); (b) if tax was deducted but not deposited, the loss is recovered from the deductor under ss. 201/201(1A)/221, and the assessee is protected by s. 205 (Yashpal Sahni; Sonavane; Devarsh Patel; Sumit Rajani); and (c) where the payee has already paid the tax, it cannot be collected again from the deductor, whose liability is then limited to interest (Hindustan Coca-Cola). Section 191(1) operates only in the residual space these rules leave open — genuine non-deduction where the assessee's own liability is undischarged.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the Income-tax Act, 1961 as amended by the Finance Act, 2025 (no Finance Act, 2026 amendment to Part A of Chapter XVII). Citations have been web-verified; readers should consult the official reports before relying on any authority in proceedings.