Oil & Natural Gas Corporation Ltd., Bharuch V. The ACIT.,TDS, Baroda

ITA 332/AHD/2012

• Counselvise Citation: 33220514 RSA 2012
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER DY. GENERAL MANAGER (F & A), OIL AND NATURAL GAS CORPORATION LIMITED, WESTERN ONSHORE BASIN, PRAGATI BHAVAN, MAKARPURA ROAD, BARODA - 390009 TAN: BRDO00088E (APPELLANT) VS ASSISTANT COMM ISSIONER OF INCOME TAX (TDS), AAYKAR BHAVAN, RACE COURSE CIRCLE, BARODA - 390001 (RESPONDENT) ASSESSEE BY: S H RI S. N. SOPARKAR , A.R. REVENUE BY: SHRI SANJAY AGRAWAL, CIT - D.R. DATE OF HEARING : 26 - 08 - 2 015 DATE OF PRONOUNCEMENT : 04 - 09 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE FOUR ASSESSEE S APPEAL S FOR A.Y. 2010 - 11, ARISE FROM A COMMON ORDER OF THE CIT(A) - I, BARODA DATED 14 ,15,16 & 17 - 11 - 2011, I T A NO S . 155, 159 , 287 & 332 / A HD/20 12 A SSESSMENT YEAR 2010 - 11 I.T.A NO S . 155, 159,287 & 322 /AHD/20 12 A.Y. 2010 - 11 PAGE NO ONGC VS. ACIT 2 IN PROCEEDINGS UNDER SECTION 201(1) R.W.S. 201(1A) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE S IDENTICAL GRIEVANCE PLEADED IN THESE APPEALS READ AS UNDER: - 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - I, BARODA (HEREINAFTER 'CIT (APPEALS)') HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ORDER PASSED BY ACIT (TDS), BARODA WHEREBY THE APPELLANT WAS HELD TO BE AN ASSESSEE IN DEFAULT FOR NOT DEDUCTING TAX AT SOURCE FROM, INTER - ALIA, REIMBURSEMENT OF COST OF UNIFORM, STITCHING CHARGES, WASHING EXPENSES, ETC. (HEREINAFTER 'UNIFORM REIMBURSEMENTS'), MADE TO ITS EMPLOYEES AND WAS CALLED UPON TO PAY THE TAX ALLEGEDLY SHORT DEDUCED FROM ITS EMPLOYEES U/S. 201(1) AND INTEREST THEREON U/S. 201(1 A) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER 'ACT'). 2. THE LEARNED CIT (APPEALS) HA S ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN NOT DELETING THE DEMAND U/S. 201(1) OF THE ACT FOR THE TAX ALLEGEDLY SHORT DEDUCTED FROM EMPLOYEES WHICH WAS RAISED BY THE ACIT (TDS), BARODA, IN RESPECT OF UNIFORM REIMBURSEMENTS. 3. THE LEARNE D CIT (APPEALS) HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN NOT DELETING THE DEMAND FOR INTEREST U/S. 201(1 A) WHICH WAS RAISED BY THE ACIT (TDS), BARODA, IN RESPECT OF UNIFORM REIMBURSEMENTS. 4. WITHOUT PREJUDICE, THE LEARNED CIT (APPEA LS) HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ACIT (TDS), BARODA'S ACTION IN RAISIN; DEMAND FOR TAX ON UNIFORM REIMBURSEMENTS AND INTEREST TH EREON IGNORING THE FACT THAT THE DEMAND SO RAISED BY THE ACIT (TDS), BARODA, INC LUDED DEMAND IN RESPECT OF THOSE EMPLOYEES FROM WHOM TAX HAD ALREADY BEEN DEDUCTED BY THE APPELLANT ITSELF. I.T.A NO S . 155, 159,287 & 322 /AHD/20 12 A.Y. 2010 - 11 PAGE NO ONGC VS. ACIT 3 3. THIS BATCH OF FOUR APPEALS ARISES FROM A SURVEY CONDUCTED BY THE DEPARTMENT AS ASSESSEE S PREMISES IN BARODA AND ANKLESHWAR IN FINANCIAL YEAR 2008 - 09. IT WAS NOTICED THAT SUBSTANTIAL AMOUNTS IN TERMS OF MONEY HAD BEEN PAID IN THE NAME OF NON - TAXABLE ALLOWANCES. THE ASSESSEE S EMPLOYEES WERE NOT FOUND WEARING ANY PARTICULAR UNIFORM DURING SURVEY. THE ASSESSING OFFICER SOUGHT TO TREAT THE IMPUG NED UNIFORM ALLOWANCE IN QUESTION AS THAT IN ADDITION TO SALARY U/S. 17 (1)(IV) OF THE ACT LIABLE FOR TDS DEDUCTION. HE PUT UP THE ASSESSEE ON NOTICE FOR INVOKING SECTION 201(1) AND 201(1)(A) OF THE ACT FOR TREATING IT AS ASSESSEE IN DEFAULT . THE ASSES SEE CLAIMED THE IMPUGNED UNIFORM ALLOWANCE TO BE EXEMPT U/S. 10(14)(I) R.W.R. 2BB UPTO ACTUAL EXPENDITURE. THE ASSESSING OFFICER IN HIS ORDER DATED 10 - 03 - 2010 WENT BY DICTIONARY MEANING OF UNIFORM AND CONCLUDED THAT NORMAL CLOTHING WORN BY THE ASSESSEE S EMPLOYEES DO NOT COME WITHIN THE MEANING THEREOF. THIS RESULTED IN THE IMPUGNED DEMANDS. 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) UPHOLDS THE ASSESSING OFFICER S ACTION AS UNDER: - APPELLANT'S CONTENTION THAT THE NORMAL DRESS WORN BY ITS EMPLOYE ES IN OFFICE IS 'UNIFORM' CANNOT BE ACCEPTED. AS PER RANDOM HOUSE DICTIONARY MEANING CITED BY THE APPELLANT, DICTIONARY MEANING CITED BY THE ACIT (TDS) OR OTHERWISE UNDERSTOOD IN COMMON PARLANCE, 'UNIFORM' IS AN IDENTIFYING OUTFIT OR STYLE OF DRESS WHICH I S IDENTICAL OR CONSISTENT WITHOUT VARIATIONS IN DETAILS. EXAMPLES ARE UNIFORM OF POLICE PERSONNEL, ARMED FORCES, CANTEEN STAFF ETC. UNIFORM MAY CHANGE AS PER RANK AND DESIGNATION OF GROUP OF EMPLOYEES CONCERNED. IF APPELLANT'S INTERPRETATION OF 'UNIFORM' W ERE TO BE ACCEPTED, IN EVERY OFFICE, ANY DRESS WORN BY THE EMPLOYEES' WOULD QUALIFY AS 'UNIFORM'. APPELLANT HAS NOT COMMENTED ON THE FACT THAT I.T.A NO S . 155, 159,287 & 322 /AHD/20 12 A.Y. 2010 - 11 PAGE NO ONGC VS. ACIT 4 PRESCRIBED UNIFORM WAS DONE AWAY IN ONGC WAY BACK IN 1995. THERE IS NO DOUBT THAT THERE WAS NO 'UNIFORM' PRESCRIB ED IN ONGC DURING THE PERIOD UNDER CONSIDERATION AND THIS FACT WAS WELL WITHIN THE KNOWLEDGE OF APPELLANT. CONCLUSION DRAWN BY THE ACIT(TDS) THAT ADDITIONAL SALARY IN THE GARB OF 'UNIFORM ALLOWANCE' WAS BEING PAID IS THEREFORE, ON SOUND FOOTING. SINCE THE PAYMENT IN QUESTION WAS NOT TOWARDS PURCHASE OR MAINTENANCE OF 'UNIFORM', IT CA NNOT BE COVERED UNDER RULE 2BB(1 )(F) READ WITH SECTION 10(14)(I). APPELLANT'S CONTENTION THAT TAX AT SOURCE WAS NOT DEDUCTED FROM PAYMENTS IN THE NATURE OF UNIFORM ALLOWANCE, DU E TO THE SAME BEING EXEMPT U/S. 10 (14)(I) READ WITH RULE 2BB BASED ON DECLARATIONS FURNISHED BY EMPLOYEES IS NOT TENABLE SINCE APPELLANT WAS WELL AWARE THAT THERE WAS NO 'UNIFORM' PRESCRIBED AND QUESTION OF ANY ALLOWANCE TO MAINTAIN THE SAME DID NOT ARISE. S INCE THE ALLOWANCE PAID WAS NOT TOWARDS MAINTENANCE OF UNIFORM BY EMPLOYEES, THERE BEING NO UNIFORM PRESCRIBED IN ONGC, THE WHOLE DEBATE REGARDING 'UNIFORM ALLOWANCE' BEING LIABLE TO FBT OR NOT IS IRRELEVANT. AS HELD ABOVE, THE PAYMENT IN QUESTION WAS AD DITIONAL SALARY TO EMPLOYEES IN THE GARB OF 'UNIFORM ALLOWANCE'. SUCH DIRECT PAYMENT OF ADDITIONAL SALARY IS NOT LIABLE TO FBT UNDER ANY OF THE CLAUSES OF SECTION 115WB EITHER AS FRINGE BENEFITS LISTED IN SUB SECTION (1) OR DEEMED FRINGE BENEFITS LISTED IN SUBSECTION (2). IT IS HELD THAT ACIT(TDS) WAS JUSTIFIED IN HOLDING APPELLANT TO BE ASSESSEE IN DEFAULT U/S. 201(1) FOR NOT DEDUCTING TAX AT SOURCE FROM UNIFORM ALLOWANCE PAID FOR ALL THE YEARS UNDER APPEAL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSE D THE CASE FILE. WE NOTICED THAT A CO - ORDINATE HAD EARLIER DISMISSED THESE APPEALS ON 14 - 02 - 2014 AFTER HOLDING THAT ITS QUERY AS TO WHETHER ANY UNIFORM HAD BEEN PRESCRIBED FOR ITS EMPLOYEES BY THE COMPANY STOOD ANSWERED IN NEGATIVE DURING THE COURSE OF HE ARING. THIS MADE THE LEARNED CO - ORDINATE BENCH TO OBSERVE THAT THE IMPUGNED ALLOWANCE COULD NOT HELD TO BE EXEMPT U/S. 10(14)(I) R.W.R. 2BB(1)(F). THEREAFTER, THE ASSESSEE FILED MISCELLANEOUS PETITIONS BEARING NO. 184 - 187/AHD/2014 PLEADING THAT THE COM PANY HAD IN FACT PRESCRIBED FOR I.T.A NO S . 155, 159,287 & 322 /AHD/20 12 A.Y. 2010 - 11 PAGE NO ONGC VS. ACIT 5 UNIFORM QUA ITS EMPLOYEES WHILE ON DUTY. RELEVANT CIRCULAR ISSUED FROM TIME TO TIME WERE ALSO PLACED ON RECORD. IT TRANSPIRES THAT ANOTHER CO - ORDINATE BENCH ACCEPTED THIS RECALLING PRAYER AND RE - FIXED THESE APPEALS FOR HEA RING. IN THIS BACKDROP OF FACTS, THESE APPEALS HAVE COME FOR HEARING BEFORE US. 6. THE ASSESSEE REFERS ITS RELEVANT CIRCULAR PLACED ON RECORD BY WAY OF ADDITIONAL EVIDENCE TO BUTTRESS ITS PLEA THAT IT HAD BEEN PRESCRIBING UNIFORMS FROM TIME TO TIME. I T TAKES US TO RELEVANT CIRCULAR NO. 23/2010 ISSUED ON 29 TH MARCH, 2010 PRESCRIBING UNIFORM OF ITS EMPLOYEES AS UNDER: - OIL AND NATURAL GAS CORPORATION LIMITED (CORPORATE PO LICY GROUP) TEL BHAVAN: DEHRADUN NO. ONGC/ER/CP/REM/006 DATED: 29 TH MARCH, 2010 CIRCULAR (23/2010) SUB: REIMBURSEMENT TOWARDS COST OF PURCHASE, STITCHING AND MAINTENANCE OF UNIFORM : COMPULSORY WEARING OF UNIFORM. THE REIMBURSABLE AMOUNT FOR PURCHASE OF UNIFORM AND STITCHING/MAINTENANCE THEREOF IS REIMBURSED TO THE EMPLOYEES EVER Y YEAR ON PRESCRIBED RATE. 2. ACCORDING TO THE INSTRUCTIONS ISSUED FROM TIME TO TIME, ALL EMPLOYEES ARE COMPULSORILY REQUIRED TO WEAR THE UNIFORM WHILE ON DUTY. IT HAS HOWEVER BEEN OBSERVED THAT IN SPITE OF REPEATED INSTRUCTIONS, EMPLOYEES ARE NOT WEARIN G UNIFORM ON DUTY. NON - ADHERING TO THE EXISTING GUIDELINES ON UNIFORM/DRESS CODE HAS BEEN VIEWED SERIOUSLY. I.T.A NO S . 155, 159,287 & 322 /AHD/20 12 A.Y. 2010 - 11 PAGE NO ONGC VS. ACIT 6 3. THEREFORE, IT HAS BEEN DECIDED THAT ALL EMPLOYEES WHO ARE REIMBURSED COST OF UNIFORM SHALL COMPULSORILY MAINTAIN DRESS CODE WHILE ON DUTY. THE DRESS CODE TO BE FOLLOWED BY THE EMPLOYEE IS ANNEXED. 4. IT IS ENJOINED UPON ALL EMPLOYEES TO FOLLOW THE PRESCRIBED DRESS CODE FAILING WHICH APPROPRIATE ACTION SHALL BE TAKEN AGAINST THE CONCERNED EMPLOYEE. (SU N DAR LAL) GGM - CHIEF, ER DISTRIBUTION: AS PER STANDARD MAILING LIST ANNEXURE DRESS CODE TO BE FOLLOWED BY THE EMLPLOYEES IN ONGC. 1. FOR MEN (A) SHIRTS - FULL/HALF SLEEVED WEL L - FITTED, BUTTONED AND IRONED FORMAL SHIRTS. - LOUD CHECKS/PRINTED SHIRTS SHOULD BE AVOIDED. - STRIPED SHIRTS ARE PERMISSIB LE. (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. I.T.A NO S . 155, 159,287 & 322 /AHD/20 12 A.Y. 2010 - 11 PAGE NO ONGC VS. ACIT 7 - IN PLACES WHICH EXPERIENCE HIGH TEMPERATURES, EMPLOYEES CAN WEAR SANDALS INSTEAD OF SHOES. (E) SUITS, BLAZERS, COATS & JACKETS (OPTIONAL) - THE S E 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 T AILO RED DRESS/FORMAL TROUSERS. 7. THE ASSESSEE S CASE IN VIEW OF THE ABOVE SAID EXTRACTED PORTION SEEKS TO TREAT THE ABOVE STATED PRESCRIBED WAY OF DRESSING UP OF ITS EMPLOYEES EXEMPT U/S. 10(14)(1) OF THE ACT. THE REVENUE STRONGLY SUPPORTS THE CIT(A) S O RDER UNDER CHALLENGE GOING BY DICTIONARY MEANING OF THE WORD UNIFORM . WE HAVE GIVEN OUR THOUGHTFU L CONSIDERATION TO RIVAL CONTENTIONS AND ARE OF THE VIEW THAT THE ASSESSEE S ARGUMENTS ARE NOT LIABLE TO BE ACCEPTED. IT TRANSPIRES FROM THE ABOVE STATED C IRCULAR THAT WHAT IS PRESCRIBED IS ONLY DRESS OF ITS EMPLOYEES I.E. SHIRTS, TROUSOWERS, TIES, BELTS FOR GENTS AND SALWAR KAMEEZ ETC FOR LADY EMPLOYEES WITHOUT ANY PARTICULAR SHADE OR TEXTURE THEREOF. WE ARE OF THE VIEW THAT THE SAME IS ONLY A GENERAL INST RUCTION MUCH LESS THAN THE DICTIONARY MEANING OF UNIFORM AS QUOTED BY THE LOWER AUTHORITIES. THIS GENERAL PRESCRIPTION DOES NOT EVEN SATISFY THE MEANING OF THE WORD UNIFORM IN COMMON PARLANCE I.E. OF THAT SAME KIND OR TYPE. WE FURTHER NOTICE THAT THE ASSESSING I.T.A NO S . 155, 159,287 & 322 /AHD/20 12 A.Y. 2010 - 11 PAGE NO ONGC VS. ACIT 8 OFFICER IN HIS ORDER QUOTES SIMILAR PLEA REJECTED IN PRECEDING ASSESSMENT YEAR AS WELL WHICH STOOD UPHELD UP TO LOWER APPELLATE STAGE. THE ASSESSEE S ARGUM ENTS DO NOT DISPEL THE SAME. WE HOLD ACCORDINGLY THAT ITS ARGUMENTS HEREIN ABOVE HAVE TO BE REJECTED ON MERITS AS WELL CONSISTENCY. WE AFFIRM THE LOWER APPELLATE ORDER IN ALL FOR CASES. THE ASSESSEE S RELEVANT GROUNDS STAND REJECTED. 8. THESE REVENUE S APPEALS BEARING NOS. ITA 155, 159, 287 AND 322/AHD/2012 ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 04 - 0 9 - 2015 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTNAT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 04 /0 9 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. A SSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,