Case Law Details
Ms Karnataka Power Transmission Corporation Ltd. Vs ITO (OSD) (TDS) (ITAT Bangalore)
FACTS –
Karnataka Power Transmission Corporation Ltd. paid cash equivalent of unutilized leave at the time of retirement of their employees, however, they didn’t deducted TDS on the same. As per section 10(10AA), in case of payment towards unutilized leave period, entire payment is exempt in case of Central or State Government employee and payment up to INR 3 Lakhs is exempt in any other case.
Proceeding was initiated against KPTCL u/s 201 and 201(1A) with an allegation that KPTCL was bound to deduct TDS on salaries paid to their employees by including the payment received by an employee in respect of any leave period not availed by the employee. Department contended that KPTCL is not State Government, but is a statutory corporation and therefore are required to deduct TDS above INR 3 Lakhs.
KPTCL submitted that its employees were employees of the State Government and therefore entire payment towards unutilized leave period was exempt.
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