High Court Of Rajasthan : Jaipur Bench
CIT vs. Rajasthan Rajya Vidhut Prasaran Nigam Ltd. & Ors.
Section 17(2), 256(2)
Asst. Year 1991-92
Anil Dev Singh, C.J. & K.S. Rathore, J.
IT Ref. Appln. No. 11 of 1999
26th August, 2003
Counsel Appeared :
R.B. Mathur, for the Applicant : None, for the Respondent
JUDGMENT
BY THE COURT :
No question of law arises from the order of the Tribunal, Jaipur Bench, Jaipur.
2. Employees of the Rajasthan State Electricity Board are being paid conveyance allowance for discharging official duties. It is not disputed that in the first instance the employees pay for the conveyance expenses and thereafter, the same are reimbursed to them by the Rajasthan State Electricity Board.
3. The principal officer of the Board did not deduct tax at source from the amounts paid to the employees on account of conveyance allowance received by them during the financial year 1990-91 relevant to asst. yr. 1991-92. The AO considered the conveyance allowance as part of the income of the employees, imposed additional tax on the principal officer of the Board; and levied interest under s. 201(1A) of the IT Act, on it. Aggrieved by the order passed by the AO, the respondent filed an appeal before the CIT(A), who accepted the plea of the respondent that conveyance allowance paid to the employees was not a perquisite and, therefore, the respondent was not liable to tax. Thereupon, the Revenue preferred an appeal before the Tribunal, Jaipur. The Tribunal by its order dt. 25th Jan., 1998, affirmed the order passed by the CIT(A) and dismissed the appeal of the Revenue. The Revenue, not satisfied with the order of the Tribunal, moved a reference application to the Tribunal, seeking reference of the following question to us :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the CIT(A)’s decision that conveyance allowance granted by the assessee to its employees was not perquisite under s. 17(2) of the IT Act, 1961, and consequently directing the AO to revise the demand created in respect of short payment of TDS and interest thereon ?”
4. The Tribunal while declining the application, opined that no referable question of law arises from the order dt. 19th May, 1998. Aggrieved by the order dt. 19th May, 1998, of the Tribunal. The CIT, Jaipur, has filed the instant application, seeking direction to the Tribunal to refer the aforesaid question for opinion of this Court.
5. It seems to us that the Tribunal was right in holding that the conveyance allowance granted to the employees of the Rajasthan State Electricity Board was not a perquisite and hence this amount was not to be considered for purposes of deduction of tax at source. The conveyance allowance is in the nature of compensatory allowance and, therefore, is not a perquisite.
6. In the circumstances, we decline to direct the Tribunal, Jaipur, to refer the aforesaid question to this Court. Accordingly, the application fails and is hereby dismissed.
[Citation : 272 ITR 401]
