Gujarat HC: ITAT Right In Law, Assessee’s Payments To Its Employees Under The Head Of Uniform Allowance To Be Exempted

Must Read

An Overview of the Changes to be Introduced by the Consumer Protection Act, 2019

The first consumer protection legislation Consumer Protection Act, 1986 (‘old act’) was introduced with the primary objective of protecting...

Disparagement of Trademark, Products and Disparaging Advertisement 

Disparagement means “criticising someone in a wrong way” Disparagement is “to speak of slightingly, undervalue, to bring discredit or...

Political Prisoners and COVID‘s Double-Edged Sword for Those Awaiting Trial

The COVID pandemic has delayed judicial proceedings on one end. On the other end, it poses serious health risks...

The Appellant- Commissioner of Income Tax (TDS) called in question the order dated 16.3.2018 passed by the Income Tax Appellate Tribunal, (“the Tribunal”) for the assessment year 2010-11. The High Court was faced with the substantial question of law, as provided below. The brief facts are that in 2010, a survey was conducted at the office premises of the Assessee – Oil and Natural Gas Corporation Limited and that they had made payments under the head “uniform allowance” however, the deductor had neither included this allowance to the total salary payments nor had he deducted tax at source (TDS) on such income. There were judgements made on the preceding financial year. The Assessing Officer noted that there was no provision for granting an exemption on the basis of self-certification. The Assessing Officer noted as to how all the employees would uniformly incur such expenditure irrespective of their post and necessity and as to how an employee would be in need of uniforms costing Rs.52,364/- every year that this would be expensive and the maintenance of the uniforms wouldn’t be possible per employee. The Commissioner (Appeals), and later the Tribunal, held that there was no liability for deduction of tax from the payments made to employees, therefore the assessee was not in default.

Issue before the Court

“Whether the Income Tax Appellate Tribunal was right in law in confirming the order of the Income Tax Appellate Tribunal (sic. Commissioner of Income Tax (Appeals)) deleting the additions made by the Assessing Officer under Section 201(1) of the Income Tax Act, 1961, and consequential interest charged by the Assessing Officer in relation to the assessee’s payments to its employees under the head of a uniform allowance?”

Court’s Decision

The Gujarat High Court reasoned that if an “employee gives a certificate certifying that he had incurred certain expenditure towards uniforms and maintenance thereof, insofar as the disbursing officer is concerned, that would be adequate while calculating the tax deductible at source.” The Court said that if the Assessing Officer has any doubt about the claim made by any individual employee, he can always take upon the issue during the course of assessment proceedings of such employee, and hence the case is in favour of the Assessee.

[googlepdf url=”https://libertatem.in/wp-content/uploads/2020/03/TAXAP12182018_GJHC240608092018_2_17032020_watermark.pdf” download=”Download Judgement PDF” ]


Libertatem.in is now on Telegram. Follow us for regular legal updates and judgements from the court. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can also subscribe for our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

An Overview of the Changes to be Introduced by the Consumer Protection Act, 2019

The first consumer protection legislation Consumer Protection Act, 1986 (‘old act’) was introduced with the primary objective of protecting...

Disparagement of Trademark, Products and Disparaging Advertisement 

Disparagement means “criticising someone in a wrong way” Disparagement is “to speak of slightingly, undervalue, to bring discredit or dishonour upon, the act of...

Political Prisoners and COVID‘s Double-Edged Sword for Those Awaiting Trial

The COVID pandemic has delayed judicial proceedings on one end. On the other end, it poses serious health risks for those kept in overcrowded...

Supreme Court Dismisses Appeals Against Termination of Over 8000 Teachers

The Supreme Court dismissed a series of petitions by teachers against the termination of their services. The Bench held that when the very employment...

Former DMK MLA Rajkumar Acquitted by Madras High Court

The Madras High Court has acquitted MLA Rajkumar in a rape and murder case of a 15-year-old minor girl. Justice N Satish Kumar pronounced...

More Articles Like This