Case Law Details
CJ International Hotels Ltd. Vs DCIT (ITAT Delhi)
We find the Assessing Officer in the instant case has treated assessee as an assessee in default for non deduction of tax from payment of tips u/s 192 of the IT Act since according to the Assessing Officer such payment of tips amounts to part of the salary. We find the Ld. CIT (A) following the decisions of the Hon’ble Jurisdictional High Court in assessee’s own case upheld the action of the Assessing Officer in treating the assessees as an assessee in default and thereby liable to tax u/s 201(1) and interest u/s 201 (1A) of the Act. We find the issue has now been decided in favour of the assessee by the decision of Hon’ble Apex Court in the case of ITC Vs. CIT reported in 384 ITR 14 (SC) and the name of the assessee also mentioned there in. We find following the decision of the Hon’ble Apex Court, the coordinate bench of the Tribunal in assessee’s own case has decided the issue in favour of the assessee by observing as under :-
“3. It is the argument of the Ld. AR that the only question that arises for adjudication in this matter is whether the tips for hotel employees included and paid by credit card by customers and collected by the employer and disburse to the employees, amount to salary or in lieu of salary or payment made “by or on behalf of’ the employer. He submitted that in assessee’s own case relating to the AY 2005-06 the Hon’ble Supreme Court held that the tips for hotel employees included and paid by credit card by customers and collected by the employer and disburse to the employees do not amount to salary or profit in lieu of salary or payment made by or on behalf of the employer, as such provisions requiring deduction of tax at source are not attracted. We have perused the record and the order of a coordinate Bench of this Tribunal in assessee’s own case reported in 158 ITD 287, decision of the Hon’ble jurisdictional High Court in assessee’s own case in ita 445/2011 REPORTED IN [2011] 338 itr 598 (Delhi) and the decision of the decision of the Hon’ble Apex Court in assessee’s own case in Civil Appeal No.4441 of 2016 reported in [2016] 384 ITR 14 (SC). Facts and questions involved for adjudication are identical. Question to be answered in this matter is no longer resintegra and covered by these decisions. Hence, while respectfully following the decision reported in (2016) 384 ITR 14 (SC), we hold that the tax u/s 201(1) and 201(1A) cannot be sustained. We, accordingly, direct the AO to delete the same.”
Since the issue has now been decided in favour of the assessee by the Hon’ble Apex Court as well as decision of the Tribunal for the immediately proceeding assessment year, therefore, following the same we set aside the order of the CIT (A) and direct the Assessing Officer to delete the tax levied u/s 201 (1) and interest u/s 201 (1A) of the IT Act. The grounds raised by assessee are accordingly allowed.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
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