TMI Blog2000 (7) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals. We, accordingly, condone the delay and proceed to decide the appeals on merits. 2. In both the appeals, the tax effect is less than Rs. 25,000 and, therefore, the Revenue should have refrained to file the second appeal in view of the C.B.D.T. circular dated 28-10-1992 vide No. F. 279/116 of 1992-IT and consequently the time of the Tribunal, of its own (Revenue's) officers as well as the assessee would have been saved and utilised on some substantive matters. It would be apt to quote other observation of Delhi High Court in the case of CIT v. ITAT [1998] 232 ITR 207, at page 216 as below:-- "The Central Board of Direct Taxes instructions are binding on the Department. If the case at hand is covered by a policy laid down by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Calcutta High Court was reversed. However, the decision of the Calcutta High Court has laid the appellant to believe that it is not a part of salary income and as such it was not required to deduct tax on this component of salary income. The liability of an employee to deduct income-tax on the amount of salary payable to his employees arises by virtue of section 192(1) of the I.T. Act which reads as under: "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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyer has not acted honestly and fairly. Unless that inference can be reasonably raised against an employer, no fault can be found with him. In this case the order of the ITO has not brought out any findings to show that failure to deduct tax at source was not on the basis of honest and fair opinion. As a matter of fact the circumstances that lead to non-deduction only show that the appellant company has acted in a very fair honest manner. In this case appellant company has correctly deducted tax at source required under section 192(1) of the I.T. Act and correctly estimated the income of its employees. The failure to deduct the C.C.A. cannot be held as an act deliberate incorrect estimate of income made by the appellant company. Because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re deleted." 4. When the assessee deducted the tax or was required to deduct the tax at source, the City Compensatory Allowance was not taxable as held by the jurisdictional High Court in the case of All India Insurance Employees Association v. Union of India [1989] 176 ITR 225, referred to by the C.I.T. (A) in his order. How can therefore it be said that the assessee was in default in not deducting the tax at source on such income? When the law was amended with retrospective effect from 1-4-1962 by Direct Tax Laws (Amendment) Act, 1989, the assessee had already paid the salary and, therefore, there was no possibility of deducting the tax at source, even if it wanted because there was nothing from which the tax could have been deducted. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant provisions of the Income-tax Act would go a long way in allaying the apprehensions of the assessees and if that is done in the true spirit, no assessee will be in a position to charge the Revenue with administering the provisions of the Act with 'an evil eye and unequal hand'." 6. We may also quote the following observations from the decision of the Hyderabad Bench of the Tribunal in the case of Asstt. CIT v. Jindal Irrigation Systems Ltd. [1996] 56 ITD 164 at page 167:" 6. When the law creates a duty or charge and the party is disabled to perform it, without there being any default on his part, and there is no remedy for him, the law will in general excuse him. When the obligation is one implied by law, impossibility of performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 201(1A) can be either penal in nature or compensatory one. In both the situations, the assessee cannot be charged with levy of interest in this case--if it were the former, on the analogy of Calcutta High Court decision in the case of Modern Fibotex India Ltd. and the Supreme Court decision in the case of Hindustan Electro Graphites Ltd, because it could not have anticipated the retrospective amendment; and if it were the latter, i.e. compensatory one, the liability having been shifted directly on the recipient assessee under section 191, the assessee would be deemed to be exonerated from such liability on the payer's failure to deduct tax at the time of payment. Thus, in either of the situation, the employer assessee in this case c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
