9911796707
TMI Blog2024 (11) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee against orders passed by the Assessing Officer, all dated 07.11.2013, passed under Section 201(1) & 201(1A) of the Act, treating the assessee as in default for non-deduction of Tax At Source for Assessment Years (AYs) 2017-18, 2020-21, 2021-22 & 2023-24). 2. The only grievance raised by the assessee in all these appeals is as under:- "The LAO has grossly erred in law and on facts as well as in law and considered the appellant as deductor in default under section 201 of the I.T. Act 1961 for not deducting TDS on certain payment of leave encashment to certain employee." 3. The relevant facts as culled out from the records are as under:- 3.1 The Assessee is a Local Authority set up by the Govt. of Gujarat u/s. 22 of the Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to in sub-clause (i) received by an employee, other than an employee of the Central Government or a State Government, in respect of so much of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise as does not exceed ten months, calculated on the basis of the average salary drawn by the employee during the period of ten months immediately preceding his retirement whether on superannuation or otherwise, subject to such limit as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government : Provided that where any such payments are received by an employee from more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f- (i) a public sector company ; or (ii) any other company ; or (iii) an authority established under a Central, State or Provincial Act ; or (iv) a local authority ; or (v) a co-operative society ; or (vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956) ; or (vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961) ; or (viia) any State Government; or (viib) the Central Government; or (viic) an institution, having importance throughout India or in any State or States, as the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retirement or termination of services. This sub-section 10C has increased the ambit of exemptions beyond State and Central Govt. employees and includes employees of PSUs, local authorities, co-operative societies, universities and authorities established by State or Central Acts. Thus, sub-section 10C has got a wider ambit to include employees beyond State and Central Govt. 7.5 Sub-section 10CC is also examined. This section reads as under:- (10CC) in the case of an employee, being an individual deriving income in the nature of a perquisite, not provided for by way of monetary payment, within the meaning of clause (2) of section 17, the tax on such income actually paid by his employer, at the option of the employer, on behalf of such em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encashment, retirement and perquisites varies according to the category of employees and since exemption of leave encashment is allowed to State and Central Govt. employees in full and exemption to other than State and Central Govt. employees is upto Rs. 3 lakhs as per the provisions of Section 10(10AA), it is hereby held that the assessee is liable to deduct tax on the payments made against leave encashment to their employees. The Revenue Authorities shall re-compute the quantum of tax deductible taking into consideration the exemption limit of Rs. 3 lakhs prescribed by the Act.
8. In the result, all appeals of the assessee are dismissed.
The order is pronounced in the open Court on 21.11.2024 X X X X Extracts X X X X X X X X Extracts X X X X
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