AI Drafter 
TaxTMI 
TaxTMI 
2010 (6) TMI 826
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Act. It is submitted that in the facts and circumstances of the case, there is no default u/s. 192 of the Act and therefore provisions of section 201 are not applicable. It is submitted that the order passed by the ld. Income Tax Officer is bad in law and requires to be quashed. (2) The learned Commissioner of Income Tax(Appeals) erred in holding the provisions of rule 3(5) are applicable. It is submitted that in the facts and circumstances, the CIT(A.) ought to have considered that the facility is not provided by the employer and therefore, cannot be treated as perquisite. It be submitted that it be so held now. (3) The learned CIT(A.) erred in holding that the expenditure incurred by the employer to provide any facility is not relevant. It is submitted that since no expenditure has been incurred by the appellant, the value of perquisites, if any, ought to have been determined at Nil. It be so held now. (4) The learned CIT(A.) erred in holding that proviso to Rule 3(5) is not applicable in the present case. In the facts and circumstances value per child per month does not exceed Rs. 1000 and therefore, the present case is covered by proviso to Rule ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....institution and approved under section 12A of the Income Tax Act, 1961. The school is situated in Anand and is providing education and is considered to be a renowned educational institution in Anand. In the year 1994, the assessee gave corpus fund of Rs. 3 crores to the Anandlaya Education Society. In addition to above, the assessee provides grand-in-aid to the Society, which it provides to other charitable institutions also. Anandlaya Education Society provides concession in fees charged to employees of various organization located in Anand. The assessee does not incur any expenditure towards such concession being provided by the Society. For all these four assessment years, the Assessing Officer passed the order under section 201(1) and 201A for not deducting the tax at source on contributions made by the assessee towards tuition fee of the wards of its employees. The ITO(TDS), Anand computed the perquisite value and worked out deduction of TDS and levied interest thereon. The Assessing Officer in order under section 201(1) worked out the perquisite value, which is required to be included in the salary in each employees as under :- Class Net perquisite KG-V 960/- V....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dent to be allowed to study in the school. Therefore, the benefit has accrued to the employees on the concessional caution money payable to them. The Learned Commissioner of Income Tax(Appeals) accordingly held that the Assessing Officer rightly calculated the perquisite value to the employees. However, the Learned Commissioner of Income Tax(Appeals) took the view that the value of perquisite for the employees whose wards are studying in Class KG to Class V is Rs. 960/-. The amount being below Rs. 1,000/- is not to be treated as perquisite. The employees whose wards are studying above Class V come under within the taxable definition of perquisite and, therefore, the assessee-company should have deducted tax at source. On this basis, the Learned Commissioner of Income Tax(Appeals) directed the Assessing Officer to recompute tax under section 201 and interest under section 201(1A) of the Income Tax Act excluding the employees whose wards are studying Class KG to Class V. 7. Aggrieved by the order of Learned Commissioner of Income Tax(Appeals), the assessee is in appeal before the Tribunal. 8. At the time of hearing before us, on behalf of assessee Shri Yogesh Shah appeared and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessment years under appeal. He submitted that in respect of Class KG to Class V students, the value of perquisite computed is Rs. 960/-, which has been accepted by the Learned Commissioner of Income Tax(Appeals) and perquisite value has been excluded. In respect of Class VI to Class X, the Learned Commissioner of Income Tax(Appeals) computed the perquisite value at Rs. 1010/-. He submitted that there is no perquisite value in respect of interest on caution deposit. Therefore, Rs. 10/- should be excluded. After excluding Rs. 10/-, perquisite value is Rs. 1,000/-. In respect of Class XI and XII, the Learned Commissioner of Income Tax(Appeals) computed the perquisite value at Rs. 1510/- and worked out at page 3 of his impugned order as under :- F.Y. Class Non-sponsored fees Sponsored fees Interest on caution depreciation Value of perquisite 2002-06 KG to V 1350 400 10 960 VI-X 1400 400 10 1010 XI - XII 1500 400 10 1510 In respect of Class-XI, XII, the ld. counsel of the assessee pointed out that the ld. Learned Commissioner of Income Tax(Appeals) has mentioned incorrectly t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urpose of providing educational facilities to the children of its employees as the same relates to only the children of employees of the assessee. The legislature in its wisdom has considered that the contribution of the employer towards educational facilities provided to the children of its employees will not be considered to be perquisite provided the same does not exceed Rs. 1,000/- per month per child. Earlier to insertion of Rule 3(5), under Rule 3(e) there was no limit set out for exemption these contributions/ allowances to any extent as the whole of such contribution/ disallowance was considered to be perquisite as it existed upto 31st March, 2001. Now for the year under consideration under Rule 3(5) such contribution of employer are not considered as perquisite if the same does not exceed Rs. 1,000/- per month per child. Where such benefit is provided, it should be effectively given. The view of Assessing Officer that the contribution will become perquisite within the meaning of Rule 3(5), if it is not a free educational facility, appears to be a technical view. According to rule of interpretation the proviso is to be read with main provision. The main provision provides t....