TaxTMI 
TaxTMI 
2025 (8) TMI 1104
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....-19. 2. At the outset, we observe that the appeal is time barred by 162 days. The delay of 162 days is condoned on due consideration of facts of assessee's case and owing to causing no perceptible prejudice to other side. 3. The assessee has raised the following grounds of appeal: "1. The Ld. Commissioner of Income-tax (Appeals) failed to provide an opportunity for a personal hearing via video conferencing, despite the appellant's specific request. 2. The Ld. CIT(Appeals) erred in failing to establish that the Ld. FAO's assessment was based on non-existent facts and a misinterpretation of the law. 3. The facts and circumstances of the case were not adequately considered by the Ld. Commissioner of Income-tax ....
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....o the employer, who clarified that the company paid Rs. 20,00,000/- to LIC on behalf of the assessee and grossed it up with tax of Rs. 5,87,515/-, totalling Rs. 25,87,515/- which was included as taxable salary in Form 16 issued to the assessee. Based on this, the AO held that the amount paid to LIC formed part of salary under Section 17(2)(v) of the Act, being a perquisite in the nature of a contract for an annuity. However, exemption under Section 10(10CC) was allowed only to the extent of Rs. 5,87,515/-, which was the actual tax borne by the employer. Accordingly, the AO recomputed the assessee's salary income. 5. In appeal, CIT(Appeals) dismissed the appeal of the assessee with the following observations: "6.1 The assessees s....
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....nt Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), to effect an assurance on the life of the assessee or to effect a contract for an annuity;" 6.6 In this context, reference is also drawn to a judgement of Patna High Court in the case of CIT Vs. J.G. Keshwani [1993] 202 ITR 391 (Patna). In this case, it was held that amounts spent by the company to purchase deferred annuity policies from LIC on the life of the director, was assessable as salary in the hands of the director under section 15 r.w. sections 17(1)(iv) and 17(2)(v) of the Income-Tax Act, 1961. 6.7 In view of the above, it is very clear that any sum payable by employers on behalf of emoplyee is clearly defined as perquisite in hand of the employee. The....
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.... the same income-once at the stage of employer's contribution and again at the time of actual receipt. In support of this, the assessee had earlier placed reliance on the Supreme Court judgment in CIT vs. L.W. Russel, which held that employer contributions towards annuity policies cannot be taxed in the employee's hands unless a vested right has accrued to the employee. Until such time as the employee has a vested right-i.e., the amount becomes due or receivable-no tax can be levied. Since in the present case the assessee had no such vested right in AY 2018-19, the taxability cannot arise merely because of the employer's contribution. Since the amount has not been received or become due, and will be taxed in future years when the annuity is....
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....uisite under section 17(2)(v) of the Act. Further, the Hon'ble Supreme Court in CIT vs. L.W. Russel [1964] 53 ITR 91 (SC) clarified that amounts paid by the employer towards pension/annuity schemes are not taxable in the hands of the employee unless the employee acquires a vested right in the sum so paid. In the present case, the assessee acquired no such vested right in AY 2018- 19, and the annuity payments commenced only four years thereafter. Moreover, from the records it is observed that the assessee has in fact offered to tax, on accrual/receipt basis, the annuity income received from LIC in this year under the head "Income from Salary." Therefore, taxing the employer's payment of Rs. 20,00,000/- in AY 2018-19 would amount to taxin....