Kerala HC Rules That SBI Not in Default under Income-Tax Act for Non-Deduction of TDS While Obeying Court’s Interim Order

The Kerala High Court held that when a bank (SBI) acts under an interim judicial order, it cannot be treated as a defaulting taxpayer merely because it did not deduct TDS. The judgment clarifies that compliance with court orders must be respected over administrative compliance, and penal or default notices under Income-Tax Act (e.g. under Section 201) cannot be automatically imposed in such circumstances. The ruling offers relief to institutions caught between conflicting orders — balancing judicial obedience and tax compliance obligations.