2021 (8) TMI 1053

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.... 201 of the Income Tax Act, 1961 ('Act').   2. By the aforementioned order, the ITO (TDS) held that in respect of 12 development officers of LIC there was a short deduction and non-deduction of the tax in the sum of Rs. 1,50,669/- for the Financial Year 1999-2000 and that the said amount had to be paid by LIC to the Central Government. 3. The above order resulted in an attachment of the account of LIC by Income Tax Department (Department). While issuing notice in the present petition on 1st May, 2003 this Court noted the submission of counsel for the LIC that a sum more than the one sought to be recovered had already been recovered by the Department. Accordingly, he did not press for stay of the attachment. Taking note of the sai....

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.... not have come as a surprise to LIC. There is also no provision under the Act to issue a show cause prior to passing an order under Section 201 of the Act. It is further pointed out that according to Clause (i) of Section 10 (14) the special allowance or benefit, not being in the nature of a perquisite within the meaning of Section 17 (2), specifically granted to meet expenses wholly necessarily and exclusively incurred in the performance of the duties at an office or employment of profit as may be prescribed to the extent to which such expenses are actually incurred for that purpose. 7. The Department points out that the language of clause (2) of Section 17 emphasizes that (i) the expenses should have been actually incurred during the y....

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.... of exemption under Section 10 (14) of the Act. 10. No rejoinder affidavit has been filed to the counter affidavit of the Opposite Parties. 11. The short question that arises is whether LIC had a statutory obligation to deduct tax at source while paying the aforementioned allowances to its development officers? 12. The impugned orders of the ITO and the Commissioner give detailed reasons why LIC's contentions cannot be accepted. Having heard learned counsel for the parties, the Court is unable to arrive at a different conclusion. The reasons follow. 13. In support of the contention that conveyance/additional allowance are not income and therefore not liable for deduction of tax at source, LIC relies on a CBDT Circular dated 19th....