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TMI Blog2006 (10) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... nts on the basis of monthly self-declarations which were not supported by any bill or voucher for undertaking outdoor official duties. Some of the officers have admitted that they rarely used their vehicles for any outdoor official assignment or for commuting from residence to office and even in cases where they occasionally used their vehicles for any outdoor official assignments, no records, whatsoever, of such assignments were maintained by them or by their supervisory officers. It was noted that required criteria for such allowance were that the employee must be owner of vehicle, which should be in running condition and he possess a driving license. The Assessing Officer issued a show-cause notice to explain as to why, such payments were made without TDS. In reply, it was submitted by the assessee before the Assessing Officer that the vehicle reimbursement is not an allowance but reimbursement of actual expense incurred by the concerned officer on the use of his vehicle for outdoor official assignments. In the second part of the reply, the assessee relied upon various judgments in support of its contention that once the assessee has acted honestly and fairly and has arrived at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the amount claimed has been fully spent, to avail income-tax exemption and in this regard, he drawn our attention to para 3.5 of the scheme on page No. 2 of the paper book. It is also specified in the scheme that if the employee is absent from work for 10 days or more than 10 days in a month, pro rata reimbursement on the basis of attendance is specified in the scheme and for this, he drawn our attention to para 2.4 of the scheme on page No. 2 of the paper book. It is also submitted that maintaining of documentation with regard to official use of vehicles is introduced from October, 2001 and accordingly after that date, the assessee-company is including entire amount in salary of the employee after excluding exemption of Rs. 1,200 per month per employee because maintaining of such records was found non-practicable and in this regard, our attention was drawn to para V on page No. 3 of the order of the Assessing Officer for assessment year 2002-03. Our attention was also drawn to page No. 16 of the order of the Assessing Officer for assessment year 2002-03 and it was pointed out that in that year, the Assessing Officer has calculated the salary up to 30-9-2001 only. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee that the fixed monthly amount paid to the employees was not for repairs only but also towards insurance, road tax etc. 6. We have duly considered the rival submissions and have gone through the orders of authorities below. We find that the assessee has framed a detailed scheme for reimbursement of vehicle expenses after considering various factors such as category of the officers, their place of residence and place of work, attendance etc. Each employee has to submit monthly declaration, based on which, payments were made as per scheme. In addition to that, each employee was supposed to submit an annual declaration to the effect that amount claimed has been fully spent, to avail income-tax exemption. We also find that in each monthly declaration submitted by the employees, it has been certified that "Expenses incurred on the maintenance and running of the vehicles for official purposes during the above period was not less than the amount claimed." There was no requirement during this period to maintain detailed record of tours for official purposes as required from 1-10-2001. After this date, the assessee-company has voluntarily started adding full amount of vehi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficates given by the employees in the present case. In that case, such payments under CMRE were not taken into account for the purpose of TDS. It was held in that case that even if the employee is found in course of his assessment that the amount is not exempt in his hands, there will be no impact on the estimate of income-tax payable on the income of the employee at the time when such amount is paid. The issue in the present case is fully covered in favour of the assessee by this judgment of Hon ble Gujarat High Court because the facts are identical, and hence, by respectfully following this judgment, we decide this issue regarding liability under section 201(1) of Income-tax Act in favour of the assessee because we find that the judgments relied upon by the learned DR of the revenue are distinguishable on facts as discussed hereunder. Regarding the issue of interest under section 201(1A), we agree that interest is mandatory but the Assessing Officer has to recalculate interest after giving relief and since there will be no demand under section 201(1) in view of our decision with regard to demand under section 201(1), there will be no interest also under section 201(1A) as a conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case from this judgment also. The judgment of Hon ble jurisdictional High Court rendered in the case of Bennet Coleman Co. Ltd. ( supra ) also does not help the revenue in the present case with regard to the demand under section 201(1) because in that judgment, the facts are different. In that case, tax was deducted by the employer under section 192 but was not deposited and under these facts, it was held that the assessee is an assessee in default and also liable for interest under section 201(1A). We, therefore, decide the issue with regard to section 201(1) in favour of the assessee and the issue with regard to interest liability under section 201(1A) does not survive. 7. In the result, this appeal of the assessee stands allowed and the appeal of the revenue stands dismissed. 8. Now, we take up the remaining four appeals of the assessee and four appeals of the revenue. 9. The issues involved are identical in these appeals and the only difference is regarding amount and hence, as per our decision in assessment year 1998-99 as per para Nos. 6 and 7 above, all four appeals of the assessee are allowed and all four appeals of the revenue are dismissed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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