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TMI Blog2024 (2) TMI 1498X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the amendment to the explanation w.e.f. 01.04.2009, the expenditure incurred towards the supply of electricity by the appellant to its employees would be excluded for the purpose of treating it as an expenditure towards the employees benefit is concerned. We are of the considered opinion that the view taken by the AO, so also by the CIT (Appeals) and Tribunal are not sustainable and the same is accordingly set aside/quashed. It is held that the expenditure so incurred by the appellant towards the supply of electricity would be excluded from being treated as an expenditure towards the employees welfare. Appeal allowed. - HON BLE SRI JUSTICE P.SAM KOSHY AND HON BLE SRI JUSTICE N. TUKARAMJI For the Petitioner: Sri Manoj Reddy Keshi Reddy. For the Respondents/Department: Sri J.V. Prasad. COMMON JUDGMENT: (PER HON BLE SRI JUSTICE P.SAM KOSHY) These Income Tax Appeals are filed by the same assessee i.e. M/s. Singareni Colleries Company Limited challenging the order passed by the Income Tax Appellate Tribunal, Hyderabad A Bench, Hyderabad, in ITA Nos. 881, 883 and 885/H/2014 for the assessment years 2006-07, 2007-08 and 2008-09 decided by a common order dated 23.04.2021. 2. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meeting the cost of the said electricity which is being provided to the employees. Section 115WA of the IT Act deals with the fringe benefits provided by the employer which would be otherwise taxable under the IT Act. Further, the Explanation to Section 115WB (2) (E) deals with the employees welfare also being part of the fringe benefits which would be taxable. Further, the Explanation to the said Clause E deals with certain facilities which are not to be considered as an expenditure for employees welfare. For proper understanding of the issue involved in the case, it would be relevant at this stage to take note of the provision under Section 115WB (2) and Clause E of the same along with the un-amended explanation that was there till 31.03.2009 and the amended explanation with effect from 01.04.2009. 8. The relevant portion of Clause E of sub-section 2 of Section 115WB of the Income Tax Act, 1961 is re-produced herein under: (E) Employees welfare Explanation . For the purposes of this clause, any expenditure incurred or payment made to (i) fulfil any statutory obligation; or (ii) mitigate occupational hazards; or (iii) provide first aid facilities in the hospital or dispensary run ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Jharkhand High Court at Ranchi in L.P.A.No.17 of 2018 which has been decided on 23.04.2019 and where the Division Bench of the Jharkhand High Court, in paragraph 6, relying upon the aforesaid judgment of the Hon ble Supreme Court, held as under: 6. We are in agreement with the contention of the appellant that National Coal Wage Agreement is statutory in nature. It is an outcome of tripartite agreement among the Coal Company, Labour Unions and Central Government. It has been held by the Hon'ble Supreme Court in Mohan Mahto Vs. Central Coalfields Ltd. reported in (2007) 8 SCC 549 , that it has statutory force. Learned Single Judge came to the aforesaid findings due to following facts and reasons which have been depicted in paragraph 7 of the impugned judgment which reads hereunder: 7. (i) Admittedly, after the death of the deceased-employee, late Laxmi Ravidas on submission of application for compassionate appointment of her eldest son by Samudri Devi (nominee of the petitioner's father), the Management-Company considered the case of the eldest brother of the petitioner, namely, Santosh Ravidas in the year 2004, but, by that time, the said Santosh Ravidas has died, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department since 1992. In fact, assessment order itself records that for assessment year 1995-96, appeal filed by Department in this respect before ITAT was withdrawn. It is not the case of Department that aims and objects of assessee do not permit such expenditure. Fact show that, to provide education towards of its employees who are working at sites which are otherwise away from town, schooling facility is being provided by employer. To provide better facility, the central school organization an undertaking of Union of India is requested to offer it at such site. In this situation, we find that no substantial questions of law as sought to be raised arise out of concurrent finding of CIT and ITAT . 14. The same view was further reiterated in yet another appeal preferred by the Income Tax Department in ITA No. 24 of 2019 again before the Division Bench of Nagpur Bench of the High Court of Bombay. Dealing with the fringe benefits and expenses made in the context of value of free issue of coal, medical facilities, educational facilities, grants to school and institutions, sports and recreational facilities, the Nagpur Bench of the Bombay High Court, wherein the deliberation substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said benefit extended by the appellant/employer is in terms of the clauses that are reflected in the NCWA. The judgments referred to in the preceding paragraphs clearly indicate and lay to rest the issue as to whether it is a statutory document or not, where all the judgments referred to above have clearly held that NCWA is a statutory document and it has binding force of law so far as its enforceability is concerned. 16. Under the circumstances, if we look into the un-amended Explanation to Section 115WB (2) (E) of the Act, it would further make it clear that any expenditure which was incurred in order to fulfill a statutory obligation would not be considered as an expenditure for employees welfare. So also, when we look into the subsequent amendment brought to the Explanation to Clause E of Sub-Section 2 of Section 115WB, sub-clause (i) it also clearly excludes expenses incurred or payments made to fulfill any statutory obligation. So, under both the circumstances i.e. even prior to the amendment to the explanation w.e.f. 01.04.2009, the expenditure incurred towards the supply of electricity by the appellant to its employees would be excluded for the purpose of treating it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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