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2006 (7) TMI 251 - AT - Income TaxNon deduction of TDS u/s 192 - Valuation of the perquisites - Salaries and other amenities or perquisites granted to the employees - Survey conducted - Assessee in default u/s 201(1) - charging the interest u/s 201(1A) - Whether the orders passed by the Assessing Officer for the financial years 1995-96 to 1997-98 (assessment years 1996-97 to 1998-99) have become time-barred - Applicability of rule 3 - HELD THAT:- In our view, merely because a survey was conducted by the department, the orders passed by the Assessing Officer after the expiry of the period of limitation, cannot be validated. All the material facts were already available with the department as the assessee bank has consistently, followed the same method over a period of almost 50 years. The details relating to TDS in respect of employees have to be filed by the employer every year in the prescribed form as required u/s 206 of the Act. Thus, for each financial year the prescribed return of TDS has to be filed by the tax deductor within the prescribed time-limit. The Assessing Officer was free to scrutinize these annual returns and to raise any queries if he had any doubt about the proper deduction of tax on the part of the assessee. In our view, the survey conducted on 11-12-2001 will not alter the legal position with regard to the time limit for passing of orders u/s 201(1) and 201(1A). Whether section 201(1) and 201(1A) have any applicability in case of short deduction of tax - HELD THAT:- We are unable to accept the arguments raised by the learned counsel for assessee. The Legislature has amended the relevant sections and the amended provisions have been consciously made effective with retrospective effect from 1-4-1962 i.e., right from the commencement of the Income-tax Act, 1961. In our view, whatever may be consequences, the law laid down by the Legislature has to be given effect. We, therefore, hold that for the assessment years under appeal short deduction of tax at source would also attract the provisions of section 201(1) and 201(1A). Applicability of rule 3 - There is no dispute about the proposition of the learned DR that rule 3 of the IT Rules is mandatory. However, the applicability of rule 3 would arise only when there is a perquisite u/s 17(2) of the Act and the value of such perquisite is, therefore, required to be determined. In the present case, it cannot be said that any benefit or amenity was granted or provided by the assessee bank at concessional rate. Therefore, there would be no perquisite as defined u/s 17(2)(iii). When there is no perquisite, the question of valuation of such perquisite cannot arise under rule 3. Other amenities in the form of reimbursement of wages to casual labourer and reimbursement of cleansing material - In our view, the assessee bank has taken precautions before such reimbursement was granted to the employees. Under the Rules framed, the aforesaid reimbursement is for proper maintenance and upkeep of the residential accommodation, furniture, fixture and other appliances, which are owned by the assessee-bank. In our view with regard to allotment of the furniture and reimbursement of expenditure as mentioned above, the assessee bank was clearly under a bona fide belief that it was properly complying with the provisions of section 192. There is no sufficient material or evidence to show that the assessee-bank had not acted under a bona fide belief and therefore, we hold that the assessee-bank cannot be treated to be an assessee in default u/s 201(1) and interest cannot be charged u/s 201(1A). We, therefore, reverse the orders of the respective CIT(A)'s for the assessment years under appeal and quash the orders of the Assessing Officer treating the assessee to be an assessee in default u/s 201(1) and charging the interest u/s 201(1A). In the result, all the appeals of the assessee are treated as partly allowed.
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