AO on the ground of non-deduction of TDS on Cash medical benefit to employees treated assessee as, 'assessee in default' and raised demand under section 201(1) and 201(1A). Held: Applying principles laid down in TATA Teleservices v. Union of India & 1 ((2016) 385 ITR 497 (Guj) : 2016 TaxPub(DT) 1126 (Guj-HC)) and Sodexo SVC India (P) Ltd. (2018 92 Taxmann.com 260 (Mum) : 2018 TaxPub(DT) 1773 (Mum-Trib) Orders passed by AO under section 201(1) and 201(1A) for financial year 2010-11 (assessment year 2011-12) and 1st three quarters for financial year 2011-12 (assessment year 2012-13), expired on 31-3-2014 under unamended section 201 (3)(i). Such orders having been passed after expiry of two years from the financial year wherein TDS statements were filed by the assessee under section 200, was therefore barred by limitation, hence, had to be declared as null and void.
IN THE ITAT, BANGALORE BENCH
B.R BASKARAN & BEENA PILLAI, JJ.
Life Insurance Corporation of India v. ITO
ITA Nos. 507 to 518, 519 to 530, 531 to 542, 543 to 554, 555 to 566/Bang/2020
21 January, 2021
Appellant by: Chytanya KK, Advocate
Respondent by: R Premi, Joint Commissioner (Departmental Representative)
The assessee has filed sixty appeals challenging demand raised under section 201(1) ad interest levied under section 201(1A) of the Act, levied by learned assessing officer, confirmed by learned Commissioner (Appeals), Davangere, by Order, dated 29-1-2020 for assessment years 2011-12 to 2016-17 in respect of all branches. Grounds raised by assessee have been encapsulated by way of a chart reproduced in the paragraph hereunder.
Brief Facts of the Case are as under :--
2. Learned Counsel submitted that assessee M/s. Life Insurance Corporation of India has branches at Theerathahalli, Chitradurga, Davangee, Sivamogga and Harveri. He submitted that the head office of assessee is in Mumbai. Learned assessing officer, in order to verify compliance to TDS provisions, conducted survey under section 133A of the Act, for the years under consideration at branch offices mentioned hereinabove. On verification, learned assessing officer observed that, the assessee has not deducted TDS under section192, in respect of cash medical benefit paid to its employees, payment made to Chinnu Graphics, payment to Kulkarni Services, payments to Sodexo SVC India (P) Ltd., payment made to HP India Sales (P) Ltd., and EMDC Projects. Learned assessing officer also observed that the cash medical benefit paid to employees was considered as exempt under section 10 of the Act in respect of cash Medical Benefit.
2.1. Learned assessing officer after considering submissions of assessee, in respect of Cash Medical Benefit held that, under the Act, any allowance received by an employee is fully taxable, unless it is specifically exempted by provisions of the Act. Learned assessing officer held that the deductor (assessee) is giving fixed medical benefits to its employees to meet medical expenditure irrespective of actual expenditure incurred by the employee. He noted that, employees get such benefit without furnishing any proof of having utilised the amount for medical treatment/expenditure either for the employee or any of the family members and therefore, fixed medical benefit paid to the employees are not against the expenditure, and not in the nature of reimbursement. Learned assessing officer also held that, there is no provision to allow the same under section 10 of the Act, and the amount received as fixed allowance is fully taxable in the hands of employee as perquisite. Learned assessing officer also noted that, the assessee discontinued the practice in financial year 2009-10. Learned assessing officer, thus in all appeals under consideration, held the assessee to be 'assessee in default' and passed orders under section 201(1) of the Act for years under consideration.
2.2. At the outset, both sides admit that, common issues are involved in all 60 appeals. Learned Counsel summarized the demand raised under section 201(1) and interest levied under section 201(1A) of the Act, by learned assessing officer, branch wise, qua assessment year, in paper book at page 3-6 as under :--
Theerthahalli Branch