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TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 766
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....ar 1992-93. The appeal was admitted on 11.7.2007 on the questions of law as follows:- "(i) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law, that the assessee should not be treated as assessee in default in terms of Section 201 of the Income Tax Act, 1961? (ii) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting interest u/s 201 (1A) of the Act, which is automatic and mandatory under the provisions of the Act? (iii) Whether the Tribunal could draw adverse inference against the Department on the so called discussion between the assessee and the I.T.O. (TDS) which was never took place in coming to the conclusion that the assessee was under bonafi....
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....Tax Officer (TDS) on 22/27.1.1993 on which the assessee was advised that the conveyance allowance was not taxable. No written intimation was issued by ITO (TDS). The letter of the assessee dated 29.1.1993 addressed to the Income Tax Officer, Saharanpur referring to the discussions held with him, could not be relied upon in proof of any such information or assurance given to the assessee that the conveyance allowance was not liable to be included for the purpose of deduction of tax at source. 6. The ITAT, allowed the appeal. It accepted the explanation of the assessee to be bonafide and recorded its findings as follows:- "10. We have considered the rival submissions in the light of the material placed before us and precedents relied upon. ....
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.... sole question that now stands to be decided is as to whether the assessee company had bonafide belief that the conveyance allowance payment to its employees was not the subject matter of deduction of tax at source or not. The issue as to whether the conveyance allowance is taxable or not, is not the subject matter of adjudication before us. But we are confined only to the point as to whether the assessee should be deemed to be in default for non-deduction of tax at source on conveyance allowance paid to its employees or not. Admitted facts are that upto January, 1993 the assessee had been deduting tax at source on conveyance allowance paid to its staff. Thereafter on meeting held by the representatives of the assessee company with the then....
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.... 11. In the result, the assessee's appeal is allowed and that of the revenue's stand dismissed." 7. Shri R.K. Upadhyay appearing for the revenue submits that the assessee was deducting tax on the estimated income of the employees including the travelling allowance upto January, 1993. For a period of two months, the assessee stopped deducting the amount on the ground that he held discussions with the Income Tax Officer. There was no proof of any discussion or advice given by the Income tax Officer that the amount of travelling allowance is not taxable and thus the tax may not be deducted on such amount. He submits that if the amount of tax is not deducted in accordance with Section 192, Section 201 is attracted as a consequence would have ....
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....e employer under Section 192 (1) is based on bonafide estimation and in the absence of any specific direction by the assessing officer, if the conduct of the assessee was not malafide, the assessee cannot be treated as assessee in default. In this case also the assessee company dealing in computer hardware did not deduct the tax on an amount of conveyance allowance paid to its employees. The Court found that there is no specific format and guidelines issued by the CBDT for obtaining relevant details to perform that the journey has actually been performed by the employees. The computation of taxable salary income was found to be in order with reference to deduction availed by the employees. Relying upon P.V. Rajgopal v. Union of India 233 IT....
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....idence to show that its employee (s) had actually utilized the amount (s) paid towards Leave Travel Concession (s)/Conveyance Allowance? It may be noted that the beneficiary of exemption under Section 10 (5) is an individual employee. There is no circular of Central Board of Direct Taxes (CBDT) requiring the employer under Section 192 to collect and examine the supporting evidence to the Declaration to be submitted by an employee (s). For the above reasons there is no merit in the Civil Appeals and the same are dismissed with no order as to costs." 12. In the present case also we find that though the assessee was deducting the tax on the conveyance allowance upto January, 1993, a bonafide doubt was felt as to whether the tax is to be ded....