2012 (8) TMI 426

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..... y consent of the parties, Income Tax Appeal Nos. 25 of 2010, 26 of 2010, 28 of 2010, 29 of 2010 and 22 of 2011 are treated on the day's list. 3. In Income Tax Appeal No. 22 of 2011, since the respondents are present, we have proceeded, as if, service has been effected upon the respondents. 4. The sole question involved in these appeals is:- "whether the tax paid by the employer on the salaries/ remunerations of the employees would constitute non-monetary benefits and, as such, the same would be exempted under Section 10 (10CC) of the Income Tax Act?"   5. The facts, to which there is no dispute, are that the employer paid salaries/remunerations to its employees. In addition to that, the employer paid to the Income Tax Department, t .....

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..... ides that in the case of an employee, being an individual deriving income in the nature of a perquisite not provided for by way of monetary payment, within the meaning of clause (2) of Section 17 of the Act, the tax on such income actually paid by his employer, at the option of the employer, on behalf of such employee, notwithstanding anything contained in Section 200 of the Companies Act, 1956 shall be excluded in computing total income of a previous year of such an employee. Therefore, despite prohibition contemplated in the Companies Act for payment of tax free remuneration to an employee, Section 10(10CC) of the Act has provided that notwithstanding anything contained in the Companies Act, an employee shall be entitled to exclude his in .....

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..... ts with the employees and thereby has taken over an obligation to pay income tax payable by the employees. If the employer was not obliged to pay such income tax, the same would have been payable by the employees in question. Such payment, as has been provided in Section 10 (10CC) is notwithstanding anything contained in Section 200 of the Companies Act, 1956. Therefore, the payment of tax to the Income Tax Department on account of salaries/remunerations of the employees not by way of monetary payment to the employees concerned, but for or on their account to the Income Tax Department and the same being one of the perquisites included in Clause (2) of Section 17 of the Act, such payment was to be excluded from the income of the employees. T .....

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