The assessee made payments to its employees without deduction of tax pursuant to an interim order of the High Court directing such payments to be made without TDS. The High Court held that section 201 can be invoked only where a person, despite being liable to deduct tax, fails to do so. Since the assessee was restrained by the interim order from deducting tax and had complied with the directions of the Court, it could not be treated as an assessee in default. The liability of the payees to discharge the tax liability could not be ignored after dismissal of the writ petition. Consequently, neither section 201(1) nor interest under section 201(1A) was applicable. (AY. 2016-17)