TaxTMI 
TaxTMI 
2018 (5) TMI 1177
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....n respect of assessment years 2001-2001 and 2001-2002. Since the issue involved in both these tax appeals is similar, the facts are being extracted from Tax Appeal No. 894 of 2007. The appellant-assessee in both these appeals is a Cooperative Milk Marketing Federation, having its dairy at Anand. It had filed its return for A.Y 2000-2001 and 2001- 2002 on 30th September 2005. The Assessing Officer upon verification of return of income noticed that the assessee has not treated amount paid towards part payment of tuition fees of children of its employees made to Anandalaya Education Society, which imparts education and therefore, it amounts to perquisite to that extent in the hands of the employees of the assessee, as per provision of Secti....
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....nth. This reply did not find favour with the AO, who ordered issuance of demand notice in the sum of Rs. 1,65,868/= and interest thereon under Section 201 [1A] of the Act. This gave rise to filing of first appeal before the CIT [A]. Before the Commissioner [Appeals], it was pointed out by the assessee that the AO had presumed that appellant had contributed amounts to Anandalaya Education Society for the purpose of meeting educational expenses in respect of children of its employee, whereas, the fact being that the contributions were made for recouping deficiency which the Institute suffered for providing educational facilities to the wards of employees of the appellant-assessee. And therefore, in no way, such amounts paid to Anandalaya co....
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....ty and penal interest under Section 201 [1] and 201 [1A] of the Act by holding that the contribution made by the appellant to the Anandalaya Education Society towards the deficit of education expenses of children of appellant's employees is perquisite in the hands of the employees pursuant to the provisions of Section 17 [2](iii) and (iv) of the Income Tax Act read with Rule 3 of the Income Tax Rules, 1962 ?" We have heard learned counsel for the respective parties and perused the record. Learned counsel Shri BS Soparkar appearing for the appellant-assessee submitted that the Tribunal has erred in upholding the order of CIT [A] and in dismissing the appeal of the assessee. He contended that the Tribunal has committed an error in holding ....
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....ards deficit of education expenses of children of appellant's employees is not perquisite in the hands of the employees, pursuant to provisions of Sections 17 [2] (iii) and (iv) of the Act read with Rule 3 of the Rules. Counsel lastly contended to set aside the order of the Tribunal in confirming the order of levy of penalty and penal interest under Section 201 [1] and 201 [1A] of the Act. On the other hand, learned counsel for the Revenue besides supporting the order passed by the CIT [A] as well as the Tribunal, relied on the decision of Commissioner of Income-tax [TDS] vs. Director, Delhi Public School, reported [2011] 14 taxmann.com 45 [P&H]. Counsel for the Revenue submitted that the assessee had made payment of part of fees of child....
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....e, submissions made by learned counsel for the respective parties, it appears from the record that as per the chart below, assessee has shown its income and expenditure in detail. Financial Year of Deficit No. Of Students Total Deficit Contributed Contributed per student per month 1999-2000 55 Rs.5,91,030 Rs. 896 2000-2001 62 Rs. 6,43,126 Rs. 864 2001-2002 58 Rs. 6,36,202 Rs. 914 2002-2003 63 Rs. 6,72,903 Rs. 890 2003-2005 61 Rs. 7,32,122 Rs. 1000 If we peruse the aforesaid chart, it is not in dispute that the children of the employees of appellant-assessee are studying in Anandalaya Education Society and are paying fees at a subsidized rate. It is equally true that the recurring deficit of the Society is bein....