Case Law Details
ITO (TDS) Vs Mahatma Gandhi University (ITAT Cochin)
Conclusion: Payments made by assessee-university to its employees towards death cum retirement gratuity, commutation of pension or leave salary should not be liable for TDS to the extent permitted under the provisions of section 10(10)(i), 10(10A) and 10(10AA) as the employees of assessee were found to be holding civil posts under the State Government, therefore, the provisions of section 10(10)(i), 10(10A) and 10(10AA) were fully attracted.
Held: Assessee-university was discharging the TDS liability on the payments made to employee on the Death cum Retirement Gratuity (DCRG), Commutation of Pension and leave salary after allowing exemption provided u/s. 10(10)(iii), 10(10A)(ii) and 10(10AA)(ii). Assessee claimed that the employees of assessee were holding civil posts under the State Government and it was not liable to deduct TDS on the payment of death cum retirement gratuity, commutation of pension and leave salary to its employees. . AO was of the view that assessee could not be treated as part of Government and the employees of university did not fall under the category of Government Employees and as such the exemptions available to the Government employees would not be applicable to the University employees. Hence, TDS was to be made on taxable portion of the payment of DCRG, Commutation of pension & leave salary. AO passed the order u/s. 201(1) and 201(1A) raising the demand. It was held the employees of assessee were found to be holding civil posts under the State Government, therefore, the provisions of section 10(10)(i), 10(10A) and 10(10AA) were fully attracted. Once assessee fell under the above provisions of the Act, the same could not be subject to TDS. Therefore, payments made by assessee to its employees towards death cum retirement gratuity, commutation of pension or leave salary should not be liable for TDS to the extent permitted under the provisions of section 10(10)(i), 10(10A) and 10(10AA).
FULL TEXT OF THE ITAT JUDGMENT
These appeals filed by the Revenue are directed against the different orders of the CIT(A), Kottayam dated 03/09/2018 and pertain to the assessment years 2016-17 and 2017-18. The assessee has also filed Cross Objections in C.O. Nos. 01 & 02/Coch/2019.
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