TMI Blog2005 (9) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... e employees. 2. The facts of the case are that during the course of survey, it was found that there was a short deduction of tax on payment to employees as the employer had considered reimbursement of expenses/actual expenses paid to the employees on account of HRA, LTA, attire allowances, medical claim, conveyance allowance etc. The Assessing Officer treated various allowances/expenses paid by the employer to the employees as taxable for the purpose of TDS. He then worked out short deduction of tax and consequential levy of interest as under : Assessment year Total amount disallowed Rs. Tax short deducted u/s 201(1) Interest u/s 201(1A) 1998-99 8,02,506 2,40,752 1,21, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd. and Another v. ACIT (TDS) and others, reported in 251 ITR at page No. 306, has upheld the validity of the CBDT s circular dated 12-2-1991 and notification dated 15-9-1999 conferring powers upon the prescribed authorities receiving returns of TDS to conduct survey and issue summons for production of books and documents. This would not be irrelevant to mention that the appellant had admittedly filed annual returns of salary in form No. 24 with ITO, TDS. In other words, the appellant had accepted the jurisdiction of ITO, TDS by its conduct of filing annual return of salary. The CBDT as well as CCIT are vested with powers under section 120 of the Act to authorise any authority other than the Assessing Officer (who make assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for the purpose of employment. 6. We considered the submissions of assessee as made before CIT(A) and that of learned DR before us. So far as the question of jurisdictions of ITO (TDS) is concerned, we are unable to accept the contention of the assessee that ITO (TDS) did not have jurisdiction. We confirm the decision of CIT(A) on this ground, as there is no other material contrary to this. However, on merits, we find that payment from the employer for the shortfall of TDS is un-called for. The employer is only required to have broad picture of the estimated income to be subjected to TDS. The employer is expected to act honestly and fairly. Where estimate made by the employer was honest and bona fide, the mere fact that such income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer as to whether such short fall has been given effect to in the assessment of employee. 8. Thus, we are of the view that there is no case for directing employer to make up the short fall in TDS on account of certain expenses considered by the employer as non-taxable but ITO considered the same as taxable. None of the items on which short fall in TDS has been demanded is one where there cannot be two opinions as to whether they would be exempt under section 10(14) or not. Once two opinions are possible over taxability of an item and the employer has chosen one in favour of his employee, no fault can be found with him. 9. There is another aspect of the issue, section 201 can be applied to employer who fails to pay the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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