- (1.) The present appeal has been filed under Section 260A of the Income-tax Act, 1961, hereinafter referred to as "the Act", against the order dated 4th February, 2005 passed by the Income Tax Appellate Tribunal, Delhi. The Revenue has proposed the following two substantial questions of law said to be arising out of the order of the Tribunal. (1)"Whether on the facts and in the circumstances of the case the Tribunal is justified in law in deleting charge of interest u/s 201(201(1A) in respect of the year under consideration by holding that the A.O.has failed to make out a case that income estimated by the assessee was not bonafide and honest, ignoring the fact that the Income Tax Act, 1961 provides deduction of tax on the value of perquisite being part of salary as provided u/s 17 of the Act - (2) "Whether on the facts and in the circumstances of the case the Tribunal is justified in law in relying upon the decisions in the case of Eicher Good Earth Vs. ITO, and Gwalior Rayon Silk Co.Ltd. Vs. CIT, 1983 140 ITR 832 as much as these decisions are not applicable to the facts and circumstances of the present case -
(2.) Briefly stated the facts giving rise to the present appeal are as follows:- For the Financial Year 1993-94, relevant to the Assessment Year 1994-95, the respondent-assessee, which is engaged in the business of manufacture of sugar by vacuum pan process and other allied products, deducted tax at source from the salary and other emoluments paid to its employees. It filed return in Form 24, as required under the provision of section 206 of the Act. The return was scrutinized and the Assessing Officer found that the respondent-assessee has not deducted the correct value of perquisites on account of residential accommodation, watchman and furniture provided to its employees and had also not taken into account the value of other amenities of electricity, water, Chowkidar and sweeper provided free of cost or at the concessional rate to employees. The Assessing Officer, therefore, directed to charge short deduction of tax and interest u/s 201(1A) of the Act. Feeling aggrieved the respondent-assessee preferred an appeal before the Commissioner of Income-tax (Appeals), Muzaffarnagar, who vide order dated 10th March, 2000 had partly allowed the appeal. The Commissioner of Income-tax (Appeals) has directed the value of perquisites to be determined as directed by him for the Financial Years 1995-96 and 1996-97 and consequential relief was allowed. I.T.O. (TDS) preferred an appeal before the Tribunal, which vide order dated 4th February, 2005 had dismissed the appeal. The Tribunal has held that the estimate made by the assessee was bonafide and honest and there is no such occasion for the I.T.O.(TDS) to say that the estimate was not bonafide. That being the position, the Tribunal was of the opinion that the interest under Section 201(1A) could not have been charged.
(3.) We have heard Sri R.K. Upadhyay, learned Senior Standing Counsel for the Revenue and Sri R.S. Agrawal, learned counsel appearing for the respondent-assessee and have perused the impugned order of the Tribunal as also the orders passed by the I.T.O.(TDS) and the Commissioner of Income-tax (Appeals).;