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2014 (1) TMI 1428 - ITAT BANGALOREDemand u/s 201(1) of the Act - Leviability of Interest u/s 201(1A) of the Act - Liability to deduct TDS on medical allowance – Scope of definition of perquisites u/s 17(2)(v) of the Act – Held that:- Exemption in respect of medical expenditure and leave travel is considered after collecting and verifying the details and evidences furnished by the employees in this regard as per the policies and controls put in place to ensure that the requirement of Rule 2B are fulfilled - The details filed before the Assessing Officer for TDS explains the policies adopted to ensure fulfilment of the requirement of Rule 2B and the process adopted in considering the exemption / deduction under the proviso (iv) to section 17(2) of the Act - the assessee has put in place internal controls to discharge the statutory obligation under section 192 of the Act and it would appear that every effort is made to comply with the requirements of section 192 by making a bona fide estimate of taxable salary in the process of making TDS there under - By allowing the employee to claim exemption, the assessee is not benefited - the orders passed by the Assessing Officer under section 201(1) and 201(1A) is unsustainable in law and has rightly been cancelled by the learned CIT(Appeals). The liability of the person deducting tax at source cannot be greater than the liability of the person on whose behalf tax at source is deducted - The Assessing Officer has ignored this aspect and has proceeded to pass the orders under section 201(1) and 201(1A) of the Act. Opportunity of being heard u/s 250(1) and 250(2) of the Act - Held that:- The learned CIT (Appeals) had only called for the break-up of the figures relating to medical reimbursement which was actually paid to employees and that which was considered not forming part of salary by the employees on production of evidence by the employee - These figures are the same figures on the basis of which the Assessing Officer passed orders under sections 201(1) and 201(1A) of the Act – Decided against Revenue. Exemption u/s 17(2) of the Act –As regards the grievance regarding finding that there was no dispute that the assessee has satisfied itself that the employees were entitled to exemption / relief under proviso (iv) to section 17(2) of the Act, nothing has been brought on record before us to demonstrate that the Assessing Officer disputed these facts – Decided against Revenue.
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