2018 (5) TMI 431

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....f, are that the assessee is a company engaged in the business of running a hotel. During the course of assessment proceedings the Assessing Officer noted that the assessee has not deducted tax from the tips paid to the employees. From the various details furnished by the assessee, he noted that there are three types of tips i.e. (a) one which is added by the customer in the bills (b) One which is added in the credit card amount and (c) Cash given by the guest to the staff directly. He observed that out of these first two are collected by management and given to Tip In-Charge who further distributes it to the staff on points basis. This distribution is done weekly. According to the Assessing Officer the employees receive tips on account of e....

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.... tax u/s 192 on the tips of Rs. 30,47,650/- disbursed by the assessee on behalf of its guests. 3. That on facts and in law the order u/s 201(1) dated 26th March, 2013 passed by the Assessing Officer is bad in law and void ab initio. 4. That on facts and in law the order of CIT(A) [to the extent it is prejudicial] is bad in law in whole and / or in part. ITA No. 4535/Del /2015 1. That on facts and in law the CIT(A) erred in upholding the action of Assessing Officer in levying interest u/s 201(1 A) of the Act for alleged defaults u/s 192 of the Act. 2. That on facts and in law the order u/s 201 (1A) dated 26th March, 2013 passed by the Assessing Officer is bad in law and void ab initio. 3. That ....

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....t unnecessary to go into this question for the simple reason that as held in CTT v. Eli Lilly and Co. (India) P. Ltd. [2009] 15 SCC l1 at paragraph 91, interest under section 201(1 A) can only be levied when a person is declared as an assessee-in- default. Having found that the appellants in the present cases are outside section 192 of the Act, the appellants cannot be stated to be assessees-indefault and hence no question of interest therefore arises." 5. Referring to the decision of the Tribunal in assessees own case for A. Y. 2010-11 vide ITA No.379 and 380/Del/2014 order dated 11.08.2017, copy of which is placed at pages 59 to 62 of the paper book, he submitted that the Tribunal following the decision of the Hon'ble Apex Court has de....

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.... tips amounts to part of the salary. We find the Ld. CIT (A) following the decisions of the Hon'ble Jurisdictional High Court in assessee's own case upheld the action of the Assessing Officer in treating the assessees as an assessee in default and thereby liable to tax u/s 201(1) and interest u/s 201 (1A) of the Act. We find the issue has now been decided in favour of the assessee by the decision of Hon'ble Apex Court in the case of ITC Vs. CIT reported in 384 ITR 14 (SC) and the name of the assessee also mentioned there in. We find following the decision of the Hon'ble Apex Court, the coordinate bench of the Tribunal in assessee's own case has decided the issue in favour of the assessee by observing as under :- "3. It is the argum....