Arguments by Counsel appearing for Interglobe aviation (Dated: 7 th Feb,

2023)
Page 147 Section 201- Consequences of failure to deduct or pay where any person including
principal officer, any sum, including the provisions of Act, does not deduct or pay as per this
Act, this such person shall be deemed to a defaulted assessee, penalty under Section 221.
Section 201 starts when there is person who is required to deduct and has not deducted and
this is established by assessing officer and the authorities. No appeal has been filed, so it
leads to submission as to what will be jurisdiction of act to be determined under Section 201.
Arun Kumar 286 ITR 89 SC, Page 173 Para 14 Section 172- “salary” read with Rule 3 of
the Act, must be permitted as per the Act. Section 72 of the Act can be invoked.
Concession is a jurisdictional fact for exercise of the Act and the authority cannot invoke any
liability.
Para 67- What is Concession?
Page 86 Para 78- Conclusion done.
If there is a failure and jurisdiction is taken, there was no failure. But if there is no failure, it
cannot be said that one holds jurisdiction in the matter.
Section 201- There are two aspects. Action under Section 201 can be taken even for the
purpose of enquiry.
Question of chargeability under the Act can arise in two ways- It can arise in hands of
payee. Assessment in hands of payee uses the word “chargeability.” This is determinable even
for payee.
Para 35 page 14- Submissions and findings. Case of revenue was that, the moment payment
is made to non-resident, one has to deduct it. Question of chargeability comes later.
Section 195 (1)- Chargeability not mentioned anywhere else. Obligation to deduct at source
arises only when there is provision for chargeability present.

Summing up-
Jurisdiction under section 201 can exist only when there is default.
Jurisdiction under section 201 is not independent but subservient to regular assessment,
cannot supersede that.
No power with the TDS officer to review, overrule or sit on appeal on regular assessment.
It will go against very foundational jurisprudence to give him power to go against Appellate
Authority order, when there is already a redressal mechanism present.
Section 201 is a summary procedure for a default already established, however without
prejudice.
Concerned with financial year 2011-12 corresponding with 2012-13 to Assessment year
2017-18 with 2018-19.