- (1.) By this petition, the petitioners have assailed the communication dated 07.04.2004 issued by the Senior Divisional Manager of Life Insurance Corporation of India (in short LIC) (Annexure No.1), where a direction was issued to deduct the Tax at Source (in short TDS) on conveyance/additional conveyance allowance to be paid to the Field Officers.
(2.) Sri Prashant Chandra, Senior Counsel, assisted by Sri Shishir Jain, learned counsel for the petitioners submits that the development officers are the members of the petitioners' association. Being aggrieved by the action of their employer's for deducting the tax at source (TDS) pertaining to the conveyance allowance which is being paid in lieu of actual expenditure incurred in procuring business for the LIC preferred the instant writ petition interalia on the grounds that the said additional conveyance allowance does not come within the meaning of Section 10(14)(i) of the Income Tax Act, under which the impugned demand notices have been issued by the Revenue. Learned counsel also submits that Section 10 (14) is applicable only in respect of a perquisite which has not been included or clarified in Section 17 (2) of the Income Tax Act and further the value of perquisite has been defined in Rule 3 of the Income Tax Rules.
(3.) It is also a submission of the learned counsel that each Field Officer uses the vehicle "wholly and exclusively" for the official purpose and charges the allowance for which certificate is produced by the employee which on verification by the employer, the said allowance was reimbursed and as such the same is exemped as it is not covered under Section 10 (14)(i) of the Act or the Rule 3 regarding the valuation of the perquisite. Thus, the additional conveyance allowance which is being paid for procuring the business for the LIC is exempted.;