TMI Blog1992 (10) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... to grant the employees conveyance allowance at a fixed rate. This was mostly to meet the expenditure incurred by the employees of the assessee for commuting from their residence to the office and back to the residence. It is well-known that Bombay is a city of distances and people from far off places do have to commute a long distance to reach their offices. It is with a view to mitigating this hardship and with a view to meeting a part of the expenditure incurred by the employees that the scheme for the grant of conveyance allowance was introduced. In the asst. yr. 1989-90, the total number of the employees, who had received conveyance allowance of various kinds was 823 and those in the asst. yr. 1991-92 was 1021. Conveyance allowance at a uniform rate of Rs. 150 per month was paid to those employees drawing a minimum salary of Rs. 2,500 per month, in the asst. yr. 1989-90. Those who were owning two wheelers were entitled to an additional amount of Rs. 150 per month towards the cost of petrol and repairs and those, who owned cars, were entitled to draw a sum of Rs. 550 per month, which had two components, viz., Rs. 350 for petrol and Rs. 200 for repairs and maintenance. This scale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le if the claim is backed up by a declaration made by the employee. In the Circular No. 23, dt. 9th July, 1956, as corrected by Circular No. 37, dt. 21st Sept., 1956, the Board has left nobody in doubt that trips between the residence and office or regular place of work, to and fro, will be regarded as being for the purpose of employment. The assessee further relies on the Board's Circular No. 196, dt. 31st March, 1976. In paragraph 3 of the said Circular the Board has clearly laid down that if the disbursing authority is satisfied that the conveyance allowance granted to the employees is covered by s. 10(14) then the obligation to deduct tax thereon may not arise. The insertion of a new sub-clause namely, 2(24)(iiia), on which a lot of store is laid by, can in no way help the Departmental position. The new sub-clause reads as under: "Income includes— (iiia) any special allowance or benefit, other than perquisite included under sub-cl. (iii), specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the performance of the duties of an office or employment of profit." This section is to be r/w s. 10(14) of the IT Act, which lays down th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Expln. to s. 17(2), which reads as under: "For the removal of doubts, it is hereby declared that the use of any vehicle provided by a company or an employer for journey by the assessee from his residence to his office or other place of work, or from such office or place to his residence, shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate for the purposes of this sub-clause." This Explanation, which was introduced by the Finance Act, 1989, was only with a view to removing any doubt in this regard. The position that would emerge from this statutory provisions and also the circulars issued from time to time, to which a reference has been made earlier is that any allowance paid to meet the expenditure for journey between the residence and place of work and from the place of work to the residence would have to be treated as reimbursement of expenditure incurred wholly for the purposes of performance of duties. Coming to the revised education benefit scheme to the children of the employees, it is submitted that such allowance was not salary under the terms of service. It is a scholarship granted by the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome received by them, and further the employer is expected to act honestly and fairly. If these things are satisfied there would be no liability under s. 201 of the IT Act. This decision squarely covers the case of the assessee. The assessee then submits that once a regular assessment of the employee has been completed and the amount of tax was fully paid by him there is no jurisdiction for the Revenue under s. 201 of the IT Act to demand further tax from the employer in respect of the tax alleged to have been short deducted at source. Such, according to the assessee, is the decision of the Madhya Pradesh High Court in the case of CIT vs. Manager, Madhya Pradesh State Co-operative Development Bank Ltd. (1982) 31 CTR (MP) 187 : (1982) 137 ITR 230 (MP). The assessee further relies on the decision reported in CIT vs. Divisional Manager, New India Assurance Co. Ltd. (1983) 33 CTR (MP) 248 : (1983) 140 ITR 818 (MP) in support of this proposition. 5. The learned Departmental Representative, on the other hand, contends that the amount received by the employees by way of conveyance allowance from the assessee is taxable under s. 17(2)(iii) or 17(1)(iv) of the IT Act. To constitute 'sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sement and not as a benefit or amenity granted or provided free of cost or at concessional rate. The ITO or for that matter the Commissioner (A) who heard the first appeal have nowhere established that the scale at which conveyance allowance is paid to the employees is excessive or unreasonable. This is having regard to the escalating cost of travel by any mode of transport. The ITO would have been justified in treating part of the conveyance allowance as part of the salary of an employee only where the same was found to be excessive or where the salary has been paid in the garb of conveyance expense. Since this is not the case here, we are of the view that the assessee was under no obligation to deduct the tax at source on conveyance allowance. 7. As regards the payment under the revised education benefit scheme, we are of the view that the same also cannot be considered as a perquisite. An employee under the terms of his service cannot demand as a matter of right any payment from the assessee for meeting the cost of the education of his or her children. Though the payment is made to the children uniformally there is no vested right if the employee to claim the payment. There h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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