BARIN GHOSH, J. - (1.) THE point at issue in the instant writ petition is covered by a Division Bench judgment of this Court in Reckitt Colman of India Ltd. vs. Asstt. CIT & Ors. (2002) 172 CTR (Cal) 499 : (2001) 252 ITR 550 (Cal). This judgment was brought to my notice by the learned counsel appearing on behalf of the petitioner at the time when I concluded the hearing.
(2.) AS pleaded in para. 8 of the petition, the petitioner had been filing annual returns under S. 206 of the IT Act in Form No. 24 with the ITO (TDS), ward-21(1), Calcutta. The petitioner is also a regular income-tax assessee under the said Act and the AO of the petitioner is the Dy. CIT, Special Range-11, Calcutta. The ITO (TDS) made enquiry in relation to some of such returns, called for records, clarifications and explanations and also made survey. Subsequently by the impugned letters dt. 17th Jan., 1996, and 4/5th March, 1996, he called upon the petitioner to furnish certain details in respect of 20 employees of the petitioner in order to verify whether the claim of the petitioner as regards, payment of leave travel allowance to its employees is correct with a note that exemption on account of tax deducted at source is allowable where the evidence of actual expenditure is submitted by the person concerned and not on the basis of a mere declaration. In the petition it is the case of the petitioner that it had allowed such exemption to its employees on the basis of declarations alone. It has been stated that only a few tickets could be had and particulars in relation thereto had been duly submitted. Although the stand in the petition is that there is no provision in the said Act to oblige preservation of evidence in respect of exemptions, nor the Act specifies that unless such evidence is available the exemption cannot be granted and accordingly evidence could not be insisted upon by the ITO (TDS), but at the hearing the principal ground upon which the learned counsel for the petitioner relied was that neither the Act, nor the Rules authorises the ITO (TDS) to go into these aspects of the matter and if necessary, the same can be gone into only by the AO of the petitioner. I think both the contentions should be dealt with, although the last contention has been substantially dealt with by the Division Bench in the aforementioned judgment against the petitioner. At the relevant time by reason of the then sub-s. (5) of S. 10 of the IT Act, the value of any travel concession or assistance received by or due to an individual from his employer for self, his spouse and children in connection with his proceeding on leave to his home district in India was not to be included in computing the total income of such an individual. In order to avail of the said benefit three ingredients were required, namely, receipt of the travel concession or assistance from the employer, for the purpose of proceeding to his home district in India and on the occasion of the leave. All the three ingredients, if available, could entail the benefit of exemption. Receipt of assistance from the employer if established, in order to obtain the benefit it was required to establish that such assistance was received to facilitate proceeding to the home district in India during the leave period. If the individual was proceeding to his home at a place outside India, he would have no benefit. He was, therefore, required to establish that he did proceed to his home district in India. This could be done by production of appropriate evidence to that effect. If railway tickets were bought for the purpose of proceeding to the home district in India of the person concerned, but train journey pursuant to such ticket could not be availed of and in consequence the ticket was wasted, that would tantamount to making an attempt to proceed to the home district, but would not be proceeding to his home district in India. The journey on the basis of such ticket is thus required to be completed. That apart it has to be established that such journey was undertaken during the period of leave. This, however, is required to be established by the individual when his tax liability is being assessed. The question, however, is whether the employer too is required to be satisfied to that extent while not deducting tax at source on the amount of such assistance and if so, whether it was obligatory upon him to keep evidence in support thereof.
(3.) AT the relevant time S. 192 of the Act imposed an obligation upon the employer paying to his employees income chargeable under the head "salaries" to deduct income-tax at the time of payment and to deposit the same with the Revenue. By reason of the then sections 15, 16 and 17 of the Act any such assistance would be part of salary and accordingly tax by law was required to be deducted on the amount of such assistance at the time of payment. This obligation of the employer being a statutory obligation it could only be avoided by taking recourse to the then sub-s. (5) of S. 10 of the Act, but in order to do so it was obligatory on the part of the employer not only to satisfy himself that all the three ingredients of sub-s. (5) of S. 10 of the Act has been complied with, but also to preserve evidence in relation thereto so as to show and establish that the employer has not neglected to discharge his statutory obligation of deducting income-tax at source inasmuch as the income itself could not to be taken into account as an income of the employee concerned chargeable under the head "salaries". Therefore, the obligation to satisfy that such assistance was not taxable in view of sub-s. (5) of S. 10 of the Act, the employer was not only required to be satisfied as to the three ingredients of the said sub-section, as referred to above, but also to keep and preserve evidence in support thereof to establish that in the matter of discharging his statutory obligation under S. 192 of the Act he has not failed.;