2009 (1) TMI 10 - SC - Income Tax

Whether the assessee was under statutory obligation under Income Tax Act or the Rules to collect evidence to show that its employee had actually utilized the amount paid towards Leave Travel Concession(s)/Conveyance Allowance - It may be noted that the beneficiary of exemption u/s 10(5) is an individual employee - there is no circular of CBDT requiring the employer u/s 192 to collect & examine the supporting evidence to the Declaration to be submitted by an employee- Revenue s appeal dismissed

Summary

Issues: Statutory obligation to collect evidence for Leave Travel Concession/Conveyance Allowance under Income Tax Act, 1961

Analysis:
The judgment in question revolves around the determination of whether the assessee was obligated under the Income Tax Act, 1961, and/or the Rules to collect evidence proving that its employees had utilized the amounts paid towards Leave Travel Concession (LTC) or Conveyance Allowance. The Court highlighted that the exemption under Section 10(5) pertains to individual employees, and there is no circular from the Central Board of Direct Taxes mandating the employer to collect and scrutinize supporting evidence for the Declaration submitted by employees under Section 192. As a result, the Court found no merit in the Civil Appeals and dismissed them without any order regarding costs. This decision clarifies the lack of a statutory obligation on the employer to collect evidence regarding the utilization of LTC or Conveyance Allowance by employees, emphasizing the individual nature of the exemption under Section 10(5) and the absence of specific directives from the CBDT in this regard.