Case Law Details
Rajesh Kumar vs. ACIT (ITAT Agra)
Section 17(1) defines ‘salary’ and ‘perquisite’ separately for the purposes of sections 15 and 16. Section 15 is the charging section qua income from salary, whereas section 16 deals with deduction there-from. Section 17(1)(iv) says that ‘salary’ includes, inter alia, perquisites. Relief u/s 89 is available in respect of salary and so, it is, by virtue of section 17(1) (iv), as a natural corollary thereof, available qua perquisites. Rule 21A of the Rules pertains to, inter alia, salary with respect to which section 89 grants relief. Therefore, the said Rule does pertain to perquisite as well. Rule 21A(1)(a) states that where, inter alia, any portion of the assessee’s salary is received in arrears or in advance, the relief u/s 89 shall be in accordance with the provisions of Rule 21A(2). Hence, it relates to the contribution under consideration also. Section 192(2)(A) provides inter alia, that where an assessee, being a government employee in a company, is entitled to relief u/s 89(1), he must furnish particulars for the purposes of TDS, as prescribed. Rule 21AA provides the prescription, in the shape of form 10E. Under Form 10E, the particulars required to be furnished are those of income referred to in Rule 21A. Rule 21A, as noted, talks of, inter alia, income by way of salary. ‘Salary’, as per section 17(1)(iv), includes perquisites. The contribution in question is, admittedly, a perquisite. So, the circle is complete. Form 10E, ergo, does relate to the contribution under consideration. Then, Rule 21A(1)(e) read with Rule 21A(6) may not help the assessee, but Rule 21A(1)(a) read with Rule 21A(2) does. Rule 21A(1)(e) read with Rule 21A(6) concerns cases where, inter alia, the payment is not in the nature of salary paid in arrears or in advance, whereas Rule 21A(1)(a) read with Rule 21A(2) pertains to cases, inter alia, where salary is received in arrears or in advance. The assessee’s case falls under the latter category. So, Rule 21A(1)(e) read with Rule 21A(6) being not helpful to the assessee, is, in no manner, detrimental to the assessee’s claim. Further, it is true, that as per the Circular (supra) dated 4.4.2014 of GAIL, contributions over and above the exemption limit prescribed under the IT Act would be taxable in the hands of employees, as perquisite. Section 17(2)(vii) of the Act also treats such a sum as a perquisite. But, to hark back, as per section 17(1)(iv), perquisite is salary and receipt of salary paid in arrears or in advance is entitled to relief under section 89. It is trite that delegated legislation cannot override the provisions of the Act. Moreover, the circular involved herein, is not a circular issued by the CBDT, but an internal circular of GAIL, which is of no consequence over the provisions of the IT Act.
Thus:
i. Relief under the 89 of the Act is available qua a perquisite.
ii. Rule 21A and Form 10E do relate to the contribution in question.
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sir i case of arreas of incentive can we claim relief under section 89