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2019 (2) TMI 793 - AT - Income TaxTDS u/s 192 - Assessee in Default u/s 201(1) - KPTCL paid “Cash equivalent of unutilized leave at the time of their retirement” to its employees with no deduction of tds - Consequences for failure to deduct or pay - Held that:- The obligation of the Assessee u/s.192 is only to make bonafide estimate of income of his employee under the head salaries. Such obligation cannot be tested on the parameters laid down on exercise of power by authorities under the Act exercising powers u/s.132 or u/s.147 of the Act. Apart from the above, we have already set out the circumstances under which belief was formed by the Assessee while deducting tax at source on salary paid to its employees in the earlier order of the Tribunal which is extracted in paragraph-10 of this order. We are of the view that said conclusions will hold good for the present appeals also, as the facts and circumstances are same in these appeals and the appeals already decided by the Tribunal. Circumstances explained by the learned counsel for KPTCL regarding the manner of formation of KPTCL and the action of the revenue in not questioning KPTCL’s action in the past several years after its formation and the manner of exercise of control and affording protecting to employees of KPTCL by the State Government were definitely factors which weighed with KPTCL when it made estimate of its employees income under the head “Salaries”. There is no reason for them to think that its estimate of employee’s income under the head “Salaries” was incorrect as the belief it entertained was that its employees were to be regarded as employees of State Government and that its employees are entitled to exemption of the entire sum of unutilized leave encashment u/s.10(10AA)(i) of the Act. For the reasons given above and respectfully following the decision of the Tribunal referred to paragraph-10 of this order, we hold that KPTCL has discharged its obligation u/s.192 and hence proceedings u/s.201(1) & 201(1A) of the Act deserves to be quashed and are hereby quashed. All the appeals of KPTCL are allowed. - Decided in favour of assessee.
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