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TMI Blog2012 (12) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... Government account of tax deducted at source. As per the provisions of section 200, the tax deducted at source is a mode of payment of tax on the income of the person on whose income it is deducted i.e. employees in this case. - Decided in favor of assessee. - IT Appeal Nos. 76 to 82 (Ind.) of 2012 - - - Dated:- 29-10-2012 - JOGINDER SINGH AND R.C. SHARMA, JJ. Sumit Nema for the Appellant. Darshan Singh for the Respondent. ORDER Joginder Singh, Judicial Member - These are the appeals by the assessee against consolidated order dated 25.11.2011 of the learned CIT(A), Indore, for the assessment years mentioned above. In these appeals, the assessee has taken the following common grounds :- 1. That the Ld. Commissioner of Income Tax (Appeals) erred both in law and on facts in holding the appeals filed by the assessee to be non-maintainable being filed beyond statutory period and thereby declining the application for condonation of delay. 2 . That Ld. CIT (As) erred in law and on facts in holding the appeals to be non-maintainable on account of delay and then thereafter proceeding to decide the appeal on merits also. 3. That Ld. CIT (As) erred in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 17(2) of the Act made in 2007 cannot make the assessee liable to deduct TDS for the A.Ys. 2001 to 2007 as there was no TDS liability as per the prevailing law. Mr. Nema further contended that the retrospective amendment of 2012 in section 195 of the Act is being highlighted to buttress the submission of the assessee. The crux of the argument is that whenever TDS provision has to be given effect retrospectively, it is to be so made in the Act and in section 192 there was no retrospective amendment in 2007 when Section 17(2) was amended. The learned counsel placed reliance on the following judicial pronouncements :- 1. Western Coal Field [IT Appeal Nos. 93 to 108 of 2008, dated 1-10-2010] 2. Canara Bank v. ITO [2009] 121 ITD 1 (Nag.) 3. BSNL v. ITO [ITA No. 260/Ind/2010) dt.20.5.2011] (Indore ITAT) 4. ONGC v. ITO (TDS) [ITA No. 980/Mum/2004) dated 8.4.2011] 5. State Bank of India v. Dy. CIT [2010] 40 SOT 160 (Hyd.). 3. On the other hand, the learned CIT DR, Shri Darshan Singh, defended the impugned order but did not controvert the submissions of the assessee by bringing any positive material on record. 4. We have considered the rival submissions an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of rule 3 was upheld. Thereafter, there was an amendment in the Act by the Finance Act, 2007 with retrospective effect from 1.4.2002 and an Explanation was inserted in Section 17(2) providing a deeming fiction that in all cases where rent was paid less than 10% of the salary then a concession shall be deemed to be provided. 5.1 After this retrospective amendment, notice was issued on 24.3.2009 u/s 201/201A for the assessment of TDS and interest thereon. Vide order dated 31.12.2009, the order levying tax u/s 201 and interest u/s 201(1A) for seven years was passed from F.Y. 2001-02 to 2007-08. It is pertinent to mention here that the Nagpur Bench of the Tribunal in the case of Canara Bank (supra) held that accommodation provided by the assessee employer to the employees wherein rent was charged from the employees on standard basis as per Govt. Norms and the Assessing Officer applied rule 3 by holding that different between 10% or 7.5% of salary reduced by rent paid by employee shall be deemed to be perquisite, consequently, TDS should have been deducted. Interest u/s 201(1A) was also held to be leviable. The Nagpur Bench held that prior to 2007, law as laid down in Arun Kumar' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upholding the validity of Rule 3 has held that in the absence of any "deeming fiction" in the Act, it is open to the assessee to contend that there is no concession in the matter of accommodation provided by the employer to the employees and the case is not covered by Section 17(2)(ii) of the Act. In other words, even after the substitution of Rule 3 with effect from 1/4/2001, in the absence of any specific provision under the Act, it was open to the assessee not to deduct tax at source relating to the accommodation given to the employees on the ground that no concession in rent has been given to the employees. This contention of the assessee has been in fact upheld by the Apex Court in the case of Arun Kumar (supra). To overcome the above decision, the law has been amended by Finance Act, 2007 with retrospective effect from 1/4/2002. The retrospective amendment merely takes away the above argument, which was available to the assessee. Once the salary is paid by the employer after deducting tax at source as per the law prevailing on the date of paying the salary, then any subsequent amendment in law brought about retrospectively cannot require the employer to deduct tax at source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the income chargeable under the head "Salaries" including the income referred to in sub-section (1A), and the tax so payable shall be construed as if it were, a tax deductible at source, from the income under the head "Salaries as per the provisions of sub-section (1), and shall be subject to the provisions of this chapter." Thus, section 192 deals with the deduction of tax at source. Perquisite is actually not a payment of salary but a benefit not in terms of money, there was no provision initially to deduct tax at source. It is provided by section 192(1B) by the Finance Act, 2002 with effect from Ist June, 2002 and as to computation of income of perquisite, the provision in section 192(1A), also by the same Act with effect from the same date. This tax, at the option of the assessee, can be paid on the whole or part of such income without making any deduction therefrom at the time when it was otherwise deductible u/s 192. A duty is also cast upon the person deducting tax u/s 200. Rule 3 of IT Rules, 1962 provides for the time and mode of payment to the Government account of tax deducted at source. As per the provisions of section 200, the tax deducted at source is a mode of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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