TaxTMI 
TaxTMI 
2005 (9) TMI 527
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....2. The facts of the case are that during the course of survey, it was found that there was a short deduction of tax on payment to employees as the employer had considered reimbursement of expenses/actual expenses paid to the employees on account of HRA, LTA, attire allowances, medical claim, conveyance allowance etc. The Assessing Officer treated various allowances/expenses paid by the employer to the employees as taxable for the purpose of TDS. He then worked out short deduction of tax and consequential levy of interest as under :- Assessment year Total amount disallowed Rs. Tax short deducted u/s 201(1) Interest u/s 201(1A) 1998-99 8,02,506 2,40,752 1,21,580 1999-2000 15,33,941 4,59,332 2,14,080 2000-01 19,80,933 6,53,708 ....
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.... 12-2-1991 and notification dated 15-9-1999 conferring powers upon the prescribed authorities receiving returns of TDS to conduct survey and issue summons for production of books and documents. This would not be irrelevant to mention that the appellant had admittedly filed annual returns of salary in form No. 24 with ITO, TDS. In other words, the appellant had accepted the jurisdiction of ITO, TDS by its conduct of filing annual return of salary. The CBDT as well as CCIT are vested with powers under section 120 of the Act to authorise any authority other than the Assessing Officer (who make assessment of income) to deal with the matters relating to deduction of tax at source. In view of the aforesaid facts I hold that the ITO, TDS had prope....
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....the question of jurisdictions of ITO (TDS) is concerned, we are unable to accept the contention of the assessee that ITO (TDS) did not have jurisdiction. We confirm the decision of CIT(A) on this ground, as there is no other material contrary to this. However, on merits, we find that payment from the employer for the shortfall of TDS is un-called for. The employer is only required to have broad picture of the estimated income to be subjected to TDS. The employer is expected to act honestly and fairly. Where estimate made by the employer was honest and bona fide, the mere fact that such income is incorrect, the employer should not be treated as in default. For this proposition, we rely on the decision of Eicher Goodearth Ltd. v. ITO [1998] 9....
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....loyer to make up the short fall in TDS on account of certain expenses considered by the employer as non-taxable but ITO considered the same as taxable. None of the items on which short fall in TDS has been demanded is one where there cannot be two opinions as to whether they would be exempt under section 10(14) or not. Once two opinions are possible over taxability of an item and the employer has chosen one in favour of his employee, no fault can be found with him. 9. There is another aspect of the issue, section 201 can be applied to employer who fails to pay the tax as required by the provisions of the Act. It is not applicable where tax is found to be short deducted without any mala fide. For this proposition, we derive support from the....