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TMI Blog2016 (9) TMI 1564X X X X Extracts X X X X X X X X Extracts X X X X ..... issue pertains to requirement of deducting tax at source by the assessee as an employer on the payments made to the employees under the heading of uniform allowance. During the financial year 2008-09, a survey operation was carried out by the Revenue at the premises of ONGC, during which, certain materials were collected concerning lapses in uniform allowance and the employees not wearing such uniforms if so sponsored by the employer. For the assessment year 2010-11, the Assessing Officer confronted the assessee with the assessee not having deducted tax at source on such benefits given to the employees. During the financial year relevant to the said assessment year, according to the Assessing Officer, there was no uniform prescribed by the employer and that therefore the payment of allowances under the heading of uniform allowance would not fall within the exemption clause of section 10(14)(i) of the Income Tax Act, 1961 ('the Act' for short) read with Rule 2BB of Income Tax Rules, 1963, ('the Rules' for short). 3. During the assessment, the Assessing Officer recorded a statement of one Shri R.P.Bhatt, senior finance and accounts officer of ONGC, stationed at Kham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted, in every office any dress worn by the employees would qualify as uniform. He noted that the assessee had not disputed the fact that prescribed uniform was done away by ONGC since the year 1995. 7. The assessee carried the matter in further appeal before the Tribunal. At one stage, the Tribunal dismissed the appeal. The assessee, however, persuaded the Tribunal to revive the proceedings on the ground that certain important documents could not be placed before the Tribunal. In the second round before the Tribunal, the assessee produced a circular dated 29.03.2010 pertaining to reimbursement towards cost of purchase, stitching and maintenance of uniform, 'compulsory wearing of uniform'. The Tribunal however, was of the opinion that the said circular did not prescribe any uniform. It merely prescribed a dress code. The payment was therefore not exempt under section 10(14)(i) of the Act. The Tribunal therefore dismissed the appeal, upon which, the present appeal came to be filed. 8. Facts in all appeals are common. 9. Appearing for the ONGC, learned counsel Mr. N.Vankatraman raised following contentions. I. The Tribunal erroneously placed reliance on the said circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial allowance or benefit, not being in the nature of a perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, [as may be prescribed], to the extent to which such expenses are actually incurred for that purpose;" Rule 2BB of the Rules prescribes allowances for the purpose of clause 14 of section 10. Subrule (1) thereof prescribes various allowances for the purpose of clause (i) of subsection (14) of section 10. Clause (f) of rule 2BB(1) of the Rules reads as under: (f) any allowance granted to meet the expenditure incurred on the purchase or maintenance of uniform for wear during the performance of the duties of an office or employment of profit. 12. In context of such statutory provisions, it becomes necessary to ascertain whether the employer had granted allowances to meet the expenditure incurred by the employer on the purchase or maintenance of uniform for wearing during performance of duties of an office or employment of profit. The Assessing Officer noted principally two things, one that during the survey operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MEN (A) Shirts -Full/ half sleeved wellfitted, buttoned and ironed formal shirts. -Loud checks/printed shirts should be avoided. -Striped shirts are permissible. (B) Trousers -Formal styled trousers. -Cargo trousers should not be worn (C) Ties and belts -Ties, if worn, should be matching with the shirts/trousers. -Cuff link if worn, must be understated & elegant. -Belts should be sober. (D) Footwear -Formal leather shoes. -Shoes, when worn, should be worn with socks. -In places which experience high temperatures, employees can wear sandals instead of shoes. (E) Suits, Blazers, Coats & Jackets (Optional) -These should be formal & understated. -Big and bright buttons & loud patterns on suits are to be avoided. 2. FOR WOMEN A) Ironed sarees of appropriate colors, worn neatly and appropriately. B) Traditional Salwar Kameez C) Ironed western business suits. D) Formal ladies shirts with tailored dress/formal trousers."" 14. The Tribunal was of the opinion that this circular did not prescribe what can be categorized as uniform and resultantly dismissed the appeal. 15. It is true that the circular dated 29.03.2010 did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar should be formal. Under certain circumstances, however, employees could wear sandals instead of shoes. For women, it was prescribed that they should wear ironed sarees of appropriate colors or traditional salwar kameez or ironed western business suits or formal ladies shirts with tailored dress or formal trousers. 17. These specifications, undoubtedly fit the common parlance meaning of "dress code" which is often referred to as the minimum standard of dressing depending on the place or occasion and can carry a wide range of choices at the command of the person concerned, of course, within certain parameters which would essentially exclude a certain dressing which is considered too informal or inappropriate for the occasion rather than to specify a precise set of clothes. 18. On the other hand, term 'uniform' in the context of dressing carries a vastly different connotation and would necessarily include precise instructions as to the dress, design, and also colours which will achieve a uniformity in dressing at a work place or at the place of study or some such collection of group of persons belonging to by and large a common class. The term uniform has been explained i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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