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TMI Blog2005 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... bai, and for further directions to the Corporation and its branches not to deduct income-tax at source in respect of payment to the petitioners known as conveyance allowance and additional conveyance allowance, particularly for the year 2004-2005 and for other consequential relief. These petitions are filed contending that the payment which the petitioners receive from the employer and which is known by the name conveyance allowance and additional conveyance allowance, is exempted from income-tax under the provisions of clause (14) of section 10 of the Act and to the knowledge and awareness of the employer. The circular issued by the Corporation to all its branch managers to act in any way to deduct any tax at source in respect of such inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circular to ensure that persons like the petitioners, who can claim benefit under section 10(14) of the Act, comply with the requirements of the very exemption provision so that ultimately when their tax liability is determined they are not deprived of the benefit of section 10(14) of the Act because of factual non-compliance of the requirement of the section. In fact the benefit under the section, which reads as under: "Section 10. Incomes not included in total income.- In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- ... (14)(i) any such special allowance or benefit, not being the nature of a perquisite within the meaning of clause (2) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular, on the face of it, appears to be for avoiding repetition of such situations; that if the employee really qualified for the exemption and to the limit prescribed in terms of rule 2BB of the Income-tax Rules (for short, "the Rules"), a certificate is issued in favour of such employee to that extent so that the benefit of exemption is claimed by the employee that the employee does not lose the benefit by not putting forth the claim in the proper form and by placing necessary materials in this regard. The exemption granted under section 10(14) of the Act is not an absolute exemption, but a conditional one subject to the qualifications mentioned in the section itself. In the first instance, the amount mentioned in this section as qualify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the tax liability. In fact the language of the circular dated April 24, 2004, indicates that the deduction is required to be made even in respect of conveyance allowance and additional conveyance allowance payable to its Development Officers in accordance with the tax laws and the provisions in the light of the circular issued by the Central Board of Direct Taxes. By issuing the circular, the Corporation is attempting to ensure that in respect of the amount qualifying for exemption a certificate to that effect is only issued to the officer eligible for it and to deduct income-tax accordingly. In fact the very circular indicates that the amount of expenditure that the officer has incurred may not be as much as the allowance and the certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation to the petitioners, which is required to be redressed in these petitions, I am of the view that it is not necessary to examine the legal position that has been enunciated by the Rajasthan High Court in the decision cited above for the purpose of redressing the grievance of the petitioners in these petitions, particularly in the absence of factual data. As I am of the view that the circular is not at all to the detriment of the petitioners, on the other hand it only enables them to avail of the benefit in an effective manner. I do not find any ground to interfere in these writ petitions at the instance of the petitioners, particularly for quashing the circular at annexure B. It is always open to the petitioners to urge all such conten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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