2016 (8) TMI 359 - AT - Income Tax

Liability for paying FBT - Held that - Assessee is covered under the under the provisions of Chapter XII-H of the I.T. Act and is liable for paying FBT. Accordingly, no interference is called for in the order of ld. CIT(A) and assessee s appeal is dismissed.

Summary

Issues Involved:
1. Confirmation of the total value of Fringe Benefits.
2. Charging of interest under section 115WJ of the Income Tax Act, 1961.
3. Initiation of penalty proceedings under section 271(l)(d) of the Income Tax Act, 1961.

Detailed Analysis:

1. Confirmation of the Total Value of Fringe Benefits:
The primary issue was whether the total value of Fringe Benefits assessed at ?2,17,99,200/- by the Assessing Officer (AO) should be upheld as against the NIL value returned by the assessee. The AO observed that the value of Fringe Benefit Tax (FBT) was shown as NIL in the return, whereas the Tax Audit Report under section 44AB reported the FBT value at ?2,17,98,200/- with FBT payable thereon at ?74,09,208/-. The assessee contended that certain business expenditures did not relate to employees and should not attract FBT. They relied on an interim relief granted by the Gujarat High Court, which allowed the deposit of FBT in a separate account pending a final decision. However, the AO did not accept this contention and completed the assessment based on the Tax Audit Report.

The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO's decision, noting that the auditors appointed by the appellant reported fringe benefits as per the provisions of the Act. The interim relief by the Gujarat High Court did not substantively decide the matter but only allowed the deposit of FBT in a separate account. The CIT(A) concluded that the fringe benefits certified by the auditors were taxable under the provisions of the Income-tax Act.

Upon appeal to the Tribunal, it was noted that the issue was covered by a prior decision of the co-ordinate bench in the case of Gujarat Energy Transmission Corpn. Ltd., where similar facts were adjudicated. The Tribunal found no reason to interfere with the CIT(A)'s order, confirming that the assessee was liable for FBT as per the provisions of Chapter XII-H of the Income-tax Act.

2. Charging of Interest under Section 115WJ:
The second issue concerned the charging of interest under section 115WJ of the Income Tax Act on the assessed tax liability. The CIT(A) justified the levy of interest in the given situation, and the Tribunal upheld this decision, finding no grounds to contest the interest charged under the said section.

3. Initiation of Penalty Proceedings under Section 271(l)(d):
The third issue was the initiation of penalty proceedings under section 271(l)(d) for alleged concealment and/or furnishing of inaccurate particulars of income. The CIT(A) dismissed this ground, and the Tribunal did not find any substantial argument from the assessee to overturn this decision. Therefore, the initiation of penalty proceedings was upheld.

Conclusion:
The Tribunal dismissed the appeal, confirming the total value of Fringe Benefits at ?2,17,99,200/-, upholding the charging of interest under section 115WJ, and supporting the initiation of penalty proceedings under section 271(l)(d). The Tribunal's decision was aligned with the precedent set by the co-ordinate bench in a similar case, affirming the applicability of the FBT provisions as per the Income-tax Act.