TaxTMI 
TaxTMI 
1981 (1) TMI 100
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....Rs. 4,226 under aforesaid provision. This short deduction of tax was worked out by him on the basis that for the purpose of deducting tax at source from the salary paid to the employees, the assessee did not include the perquisite value of the electricity provided to the employees and the bungalow maintenance allowance paid to them. Accordingly, he issued a show-cause notice to the assessee as to why penalty be not levied against it for the said short deduction of Rs. 4,226 under s. 201 of the IT Act. The assessee in reply dt.9th Nov., 1979 did not accept the above stand of the ITO that there was a short deduction of the tax as alleged. According to the assessee, the provisions of s. 192 applies only in respect of the amount actually paid a....
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....view of a circular of the Board dt. 13th June, 1977. In the light of that decision and the circular of the Board it was urged that no liability to deduct tax at source was there. Penalty was, therefore, not exigible. Those arguments of the assessee have been negatived by the AAC. He has held that his earlier order was not based on a correct appreciation of the factual and the legal position as detailed in the aforesaid circular of the Board. The said circular, according to him, was illustrated and not exhausted. He further held that the free or concessional electricity provided by the assessee to its employees constituted perquisite the value whereof was includible in the salary of the employee concerned. Since the assessee had not deducted....
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.... was the case of the assessee. The assessee interpreted the aforesaid circular in the manner that the value of the said amenities provided by the assessee to its employees was not to be included in the salary of the employees concerned for the purposes of calculating tax to be deducted at the source. The assessee in this behalf was also supported by the language used in s. 192 of the Act. The said Bona fide belief was the reason for filing the earlier appeals before the AAC who upheld the said view of the assessee. The said decision, therefore, fortify the said Bona fide belief of the assessee. Penalty was not, therefore, exigible against the assessee. 5. These arguments of the assessee are controverted by the Deptl. Rep. who has relied ....
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....t.13th June, 1977 which talks only of the value of perquisite by way of free residential accommodation and motor car provided by employer to their employees. The assessee took the said provision to be exhaustive and not illustrative. The view was also possible because s. 192 laid an obligation on the assessee who was responsible for paying any income chargeable under the head salaries "that is, at the time of payment deduct income-tax on the amount payable at the average rate of income-tax..." The fact that the assessee was under the said bonafide belief is supported by its action in challenging the penalty orders of the ITO before the earlier three years under s. 201 for not deducting the tax at the source as done in the present year in re....