TMI Blog2002 (7) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... porting evidence of the journey conducted by the employees. The assessee submitted a copy of the proforma which was being filled up by the employees at the time of receiving the LTA before the AO. It was submitted that there is no such requirement under the Act or Rules to demand copies of the railway tickets from the employees. However, the AO did not accept the contention of the assessee and held the assessee as in default under s. 201 of the Act. The AO also charged interest under s. 201(1A) of the Act. The amount of tax and interest was Rs. 3,00,610 plus Rs. 90,174 = Rs. 3,90,784. By the impugned order, the first appellate authority upheld the finding recorded by the AO. 3. The learned counsel appearing on behalf of the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt. 1st Sept., 1994, issued by the CBDT reported in (1994) 120 CTR (St) 37 : (1994) 209 ITR 96 (St). Nowhere in the circular it has been provided that the employer shall obtain the evidence from its employees for the purpose of granting LTA and, thereafter only the amounts will be exempted under s. 10(5) of the Act. The circular is binding on the officers of the Department. The learned counsel has drawn our attention to the provision of s. 192(1) of the Act where an employer is to deduct income-tax from the salary paid by it on the amount payable at the average rate of income-tax on the estimated income of the employees. The learned counsel placed reliance on the decision of the M.P. High Court in the case of Gwalior Rayon Silk Co. Ltd. vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of LTA paid by the assessee-company was fictitious and not utilised by the employees. On the other hand, the learned Departmental Representative submitted that under s. 10(5) of the Act, LTA is to be allowed as exempted upto the amount actually utilised by the employees. In the present case, since the assessee has failed to prove that the amounts were actually utilised by its employees, hence the assessee was rightly treated as in default under s. 201(1) of the Act. He further submitted that there has been an amendment w.e.f. 1st April, 1962 in s. 201 of the Act by which default will arise for not deducting the whole or any part of the tax. 4. After hearing both the sides, we find that the grievance of the Revenue is that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the assessee for deduction of such tax under s. 192 of the Act. The provisions of s. 192 of the Act is quoted below: "(1) Any person responsible for paying any income chargeable under the head 'Salaries' shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year" By perusal of the said provision, it is clear that an employer is to deduct average rate of income-tax computed on the basis of estimated salary income of the employees. The Hon'ble Madhya Pradesh High Court in the case of Gwalior Rayon Silk (P) Ltd. has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees. Further, we find that there is no provision in the law that ticket numbers have to be obtained from the employees concerned. The whole idea is that when the assessee-employer is disbursing the amounts, he has to be satisfied about the fact that the amounts were actually expended by the employees concerned. In the present case, as we have noticed, the assessee was being allowed exemption in respect of LTA on the basis of similar circumstances and similar type of information collected from the employees. Therefore, there is no occasion to hold that in this year the action of the assessee was not bona fide and if that is so, according to the decision of the Madhya Pradesh High Court, the estimate made by the assessee is honest and fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
