TMI Blog2018 (8) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... e purposes of sections 15 and 16. Section 15 is the charging section qua income from salary, whereas section 16 deals with deduction there-from. Section 17(1)(iv) says that ‘salary’ includes, inter alia, perquisites. Relief u/s 89 is available in respect of salary and so, it is, by virtue of section 17(1) (iv), as a natural corollary thereof, available qua perquisites. Rule 21A of the Rules pertains to, inter alia, salary with respect to which section 89 grants relief. Therefore, the said Rule does pertain to perquisite as well. Rule 21A(1)(a) states that where, inter alia, any portion of the assessee’s salary is received in arrears or in advance, the relief u/s 89 shall be in accordance with the provisions of Rule 21A(2). Section 17(2)(vii) of the Act also treats such a sum as a perquisite. But, to hark back, as per section 17(1)(iv), perquisite is salary and receipt of salary paid in arrears or in advance is entitled to relief under section 89. It is trite that delegated legislation cannot override the provisions of the Act. Moreover, the circular involved herein, is not a circular issued by the CBDT, but an internal circular of GAIL, which is of no consequence over the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) has held (relevant paras) as under: 6.3 My findings on the impugned issue are as under :- (A) A perusal of section 89 and the related rules makes it amply clear that the relief under section 89 is not available, and has never been available, to an employee in respect of any arrear received by him from his employer in reference to a 'perquisite'. (B) The arrears in the present case pertain to a perquisite and not to salary or profit in lieu of salary or a family pension as defined in the Explanation to clause (iia) of section 57 of the Act. This fact is proven from a perusal of appellant's Form No. 12BA dated 22.05.2014 digitally signed by the Dy. Manager (F A), GAIL (India) Ltd., a copy of which is reproduced later in this order. (C) Further, it can be observed that the sub-clause (vi) of section 17(2) pertaining to the fringe-benefits or amenities, was substituted by sub-clauses (vii),(viii) and (viii) w.e.f. 01.04.2010 and thereby the employer's contribution to an approved superannuation fund in respect of any assessee to the extent it exceeded ₹ 1,00,000/-, was specifically brought under the ambit of 'perquisites'. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s down the terms and conditions relating to the 'Defined Contribution Scheme' under which the said arrears were received by the appellant during the impugned year. At clause 3.1.4 of this circular it has been clearly mentioned that contribution over and above exemption limit prescribed under Income Tax Act would be taxable in the hands of employees as perquisite. TDS, wherever applicable, will be deducted from monthly salary of employees. 7. The appellant has alleged in his submissions before me that the A.O. was confused and acted in a hurried manner while deciding the issue under consideration. He has also referred to some judicial precedents in his second submission dated 19.12.2017. Further, it has been argued by him that since salary includes perquisites, and perquisites include employer's contribution to superannuation fund, the relief under/ section 89 should be allowed to him. With due respect to the judicial authorities and in consideration of the facts of this case listed above, it is humbly stated that all these submissions are either irrelevant or distinguishable. 8. Therefore, in light of the above, it can be conclusively said th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. That, Section 89 of Income Tax Act speaks about relief which is as foliows:- Relief when salary, etc., is paid in arrears or in advance. 89. Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which, under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation of clause (iia) of Section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed , the AO shall, on an application made to him in this behalf, grant such relief as may be prescribed. 8. Further, as per the pay revision guidelines, which were effective from 01.01.2007 and issued by the Department of Public Enterprises (DPE) in its official Memorandum dated 26.11.2008 and 02.04.2009, the Central Public Sector Enterprises have been allowed to contribute within over all limit of 30 % of basic pay plus dearness allowance of the Employee as superannuation benefit whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order. 7. Heard. The ld. CIT(A) has held that: i. Relief u/s 89 of the Act is not available qua a perquisite. ii. Relief claimed by the assessee pertains to a perquisite and not salary. iii. Perquisite within the meaning of section 17(2)(vii) of the Act means contribution, exceeding rupees one lac, to an approved superannuation fund by the employer in respect of an assessee. iv. Rule 21A of the IT Rules and Form 10E do not relate to the contribution in question. v. Rule 21A(1)(e) read with Rule 21A(6) does not help the assessee. vi. GAIL s Circular No.CO/HR/Pol/W-19 dated 04.04.2014, in clause 3.1.4 mentions that contributions over and above the exemption limit prescribed under the IT Act would be taxable in the hands of the employees, as perquisite. 8. The ld. CIT(A) has correctly held that section 89 does not talk of perquisite, but of, inter alia, salary, whereas the relief claimed by the assessee pertains to perquisite and not salary ; that perquisite within the meaning of section 17(2)(vii) means contribution in excess of one lac rupees to an approved superannuation fund by the employer in respect of an assessee. 9. However, the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also treats such a sum as a perquisite. But, to hark back, as per section 17(1)(iv), perquisite is salary and receipt of salary paid in arrears or in advance is entitled to relief under section 89. It is trite that delegated legislation cannot override the provisions of the Act. Moreover, the circular involved herein, is not a circular issued by the CBDT, but an internal circular of GAIL, which is of no consequence over the provisions of the IT Act. 10. Thus: i. Relief under the 89 of the Act is available qua a perquisite. ii. Rule 21A and Form 10E do relate to the contribution in question. iii. Rule 21A(1)(a) read with Rule 21A(2) applies to the assessee s claim. iv. The GAIL Circular does not override the provisions of section 89 of the Act, under which, the assessee is entitled to relief. 11. In view of the above, the grievance of the assessee is justified and it is accepted as such. The order under appeal is, thus, reversed. The claim of the assessee u/s 89 of the Act is directed to be allowed forthwith. Ordered accordingly. 12. In the result, the appeal is allowed. Order pronounced in the open court on 16/07/2018. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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