TaxTMI 
TaxTMI 
2016 (10) TMI 167
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....enditure ('CMRE' for short) and uniform allowance to the petitioner, which was not reflected in the salary certificate issued by the employer, nor ONGC had deducted tax at source on such amounts. Pursuant to such notice, the Assessing Officer passed the assessment order dated 10.12.2010, under section 143(3) of the Act read with section 147, levying tax on 20% of CMRE and 100% on the uniform reimbursement expense. In fact, in this order, the Assessing Officer proceeded on the offer of the assessee to suffer such disallowance to the above extent. He accordingly added a sum of Rs. 7720/- towards disallowance of CMRE amount and Rs. 21,422/- towards uniform reimbursement. 3. The case of the petitioner is that on such benefits, the employer ONGC has paid fringe benefit in terms of section 115WA and that therefore, there was no liability for the employee to pay tax on such amounts as part of his salary. On such basis, the petitioner filed a revision petition before the Commissioner. Before the Commissioner, the petitioner raised multiple contentions including that the employer had treated the benefit as fringe benefit and paid tax accordingly. Once this is done, the employee c....
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.... of the Act. Revenue has not questioned this stand of the ONGC in this respect and accepted the FBT from the employer. We must, therefore, proceed on the basis that even as per the Revenue it was a fringe benefit for the purpose of section 115WA during the period when the FBT regime was in force. If that be so, immediate question would be, can the employee also be asked to pay tax on such amounts treating them as salary. 9. As is well known, the FBT regime survived for a short time. It was introduced under chapter XIIH under the Finance Act, 2005 with effect from 01.04.2006. Section 115W contained in chapter XIIH contained definitions. Section 115WA provided the charge of tax on fringe benefits and read as under: Charge of fringe benefit tax. 115WA. (1) In addition to the incometax charged under this Act, there shall be charged for every assessment year commencing on or after the 1st day of April, 2006, additional incometax (in this Act referred to as fringe benefit tax) in respect of the fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year at the rate of thirty percent on the value of such fringe ben....
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....er fringe benefit or amenity as may be prescribed. In other words, any fringe benefit or amenity which is prescribed under the rules would form part of the perquisite. During the period when the fringe benefit was being separately taxed under section 115WA, this definition of perquisite consciously referred to an exclusion providing that term 'perquisite' would include the value of any other fringe benefit or amenity as may be prescribed, excluding the fringe benefits chargeable to tax under chapter XIIH. In plain terms therefore in case of fringe benefit chargeable to tax under chapter XIIH, the same benefit would not form part of a perquisite of an employee in terms of section 17(2) of the Act. The statutory provisions were thus, so framed in a manner as to avoid the same benefit suffering the taxation at two ends. If a benefit paid by an employer to an employee is treated as a fringe benefit liable to tax under section 115WA of the Act, the employer alone shall suffer tax at a prescribed rate. Such benefit would not form part of the perquisite of the employee, subjecting him to further tax as additional income. The CBDT also in its circular no.9 of 2007 dated 20.12.2007,....
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....t liable to deduct tax at source u/s.192 on such amounts. Accordingly, the order passed by the A.O. For these two years is quashed." 15. This issue in one form or the other, reached the High Court in three separate proceedings. In case of Commissioner of Incometax (TDS) v. Oil & Natural Gas Corporation (India) Ltd., reported in [2013] 38 taxmann.com 187 (Gujarat), (hereinafter to be referred to as 'ONGC1'), a Division Bench of this Court confirmed the decision of the Tribunal, in which, the Tribunal had upheld the stand of the ONGC treating CMRE allowance paid to the employees as nontaxable income. It was also a case where the Revenue had questioned the ONGC for not deducting tax at source on such payments. 16. In case of Commissioner of Incometax v. Oil & Natural Gas Corporation (India) Ltd., reported in [2015] 61 taxmann.com 105 (Gujarat), (hereinafter to be referred to as 'ONGC2'), a Division Bench considered the question whether the Tribunal was right in holding that the payment of uniform allowance to the employees by ONGC incurred FBT and failed to consider that the payment of uniform allowance was nothing but an additional salary. The Division Bench con....