# Assessee-in-default SCN reply (s.201(1)/(1A)): how to reply

TDS AO proposes an assessee-in-default order for non-deduction/non-payment of TDS

## Section and form names

- Sections: 201(1), 201(1A)

## Time limit to reply

As stated in the notice. Set by the officer or left to discretion; the date is stated in the notice.

Unverified: this time limit is to be confirmed against the notified text.

Per the SCN; unverified as a fixed day-count

## Reply form

[FORM NO. 26A: Accountant's certificate of the payee's compliance (Rule 31ACB)](https://charterai.in/notice/form/it-form26a), filed through e-Proceedings / TDS AO.

The field list is to be confirmed against the notified text.

## What the reply must include

- Form 26A / proviso to s.201(1) defence where payee compliance can be shown
- recomputed s.201(1A) interest limited to the date of the payee's own return filing, not the full period
- comparison of the recomputed interest to the demand raised
- facts: payment/credit dates and the TDS position taken

## Reply outline

The strongest available defence is often the proviso to s.201(1) via Form 26A: if the payee has already included the income and paid tax on it, the deductor cannot be treated as in default for the principal amount, only interest under s.201(1A) survives, and only up to the date the payee actually filed their own return, not the full period to the order date. Recompute interest on that basis and compare it to the demand. Where Form 26A is not yet obtained, note it as pending and reserve the point.

- Facts: Payment/credit dates and the TDS position taken.
- Legal ground: Rate applicability, exemption, or payee compliance under Form 26A (CA-certified) establishing the payee has already paid tax on the income.
- Interest computation: Recompute interest under s.201(1A) and compare to the demand raised.
- Prayer: Request the assessee-in-default order not be passed, or interest be limited to what is computed above.

## Related law

- Section 201(1), Income-tax Act, 1961
- Section 201(1A), Income-tax Act, 1961

## FAQ

### What is a Assessee-in-default SCN reply (s.201(1)/(1A))?

TDS AO proposes an assessee-in-default order for non-deduction/non-payment of TDS

### What is the time limit to reply to a Assessee-in-default SCN reply (s.201(1)/(1A))?

As stated in the notice. To be confirmed against the notified text. Set by the officer or left to discretion; the date is stated in the notice.

### How is the reply to a Assessee-in-default SCN reply (s.201(1)/(1A)) filed?

On FORM NO. 26A: Accountant's certificate of the payee's compliance (Rule 31ACB), through e-Proceedings / TDS AO.

### What should the reply include?

Form 26A / proviso to s.201(1) defence where payee compliance can be shown; Recomputed s.201(1A) interest limited to the date of the payee's own return filing, not the full period; Comparison of the recomputed interest to the demand raised; Facts: payment/credit dates and the TDS position taken.

Draft this reply: https://charterai.in/sign-up

Canonical: https://charterai.in/notice/tds-assessee-in-default-scn-reply-s-201-1-1a