TDS U/s. 192 deductible on car running & maintenance expenses paid to staff

TCG Lifesciences Pvt. Ltd. Vs ITO (ITAT Kolkata)

 In the present case, the requisite details as specified in Clause (B) of sub-rule 2 of rule 3 of Income Tax Rules 1962 were not maintained by the assessee and this being the undisputed position, we find ourselves in agreement with the authorities below that the value of perquisite provided by the assessee company to its employees in the form of reimbursement of car running and maintenance charges was chargeable to tax in their hands and the assessee was liable to deduct tax at source from the said value. Since there was failure on the part of the assessee company to deduct tax at source from the value of the said perquisite, we are of the view that it was rightly treated by the A.O. as the assessee in default for such non or short deduction of tax at source under section 201(1) and interest under section 201(1A) was also correctly charged in accordance with In that view of the matter, we uphold the impugned order passed by the Ld. CIT(A) confirming the orders of the A.O. passed under section 201(1)/201(1A) for both the years under consideration and dismiss these appeals of the assessee.

FULL TEXT OF THE ITAT JUDGMENT

These two appeals filed by the assessee are directed against the common order of Ld. CIT(A) – 24, Kolkata dated 04.03.20 16 whereby he upheld the orders passed by the Assessing Officer under section 201(1)/201(1A) of the Income Tax Act, 1961 treating the assessee as the assessee in default for A.Y. 2011-12 and 2012-13.

2. The assessee in the present case is a company. A survey under section 133A was carried out in the business premises of the assessee company on 13^thSeptember, 2013. Subsequently, from the relevant details furnished by the assessee, the amount of tax deducted from the payments of various expenses was verified by the A.O. On such verification, he found that payments of Rs. 29,51,709/- and Rs. 34,00,802/- were made by the assessee company to different employees towards car running and maintenance expenses and the same were treated as exempt while computing the taxable salary income of the said employees for TDS purpose. During the course of survey and even thereafter, the assessee however failed to furnish supporting documentary evidence to establish that the said expenses were paid towards reimbursement of car expenses for official duties. The assessee company also accepted the lapse on its part in not maintaining proper log book. The A.O., therefore, held that the assessee company was liable to deduct tax at source from the amount paid to the employees towards car running and maintenance expenses of Rs. 29,51,709/- and Rs. 34,00,802/- in the F.Y. 2010-11 and 2011-12 and since the assessee had failed to do so, he treated it as the assessee in default for such short deduction amounting to Rs. 8,58,885/- and Rs. 15,75,200/- for A.Y. 2011-12 and 2012-13 respectively vide his orders passed under section 20 1(1) of the Act. He also charged interest of Rs. 3,26,376/- and Rs. 4,84,086/- under section 201(1A) for A.Y. 2011-12 and 2012-13 respectively and raised a total demand of Rs. 11,85,261/- and Rs. 20,59,286/- vide his order passed under section 201(1)/201(1A) of the Act for A.Y. 2011-12 and 2012-13 respectively.

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