P.K.BALASUBRAMANYAN, J. - (1.) THIS writ petition is filed by the National Federation of Insurance Field Workers of India. (Jamshedpur Division) said to be an All India Association of the Development Officers working in the office of the Life Bulaki Ram Versus Jatru Mahali Insurance Corporation of India. Though this much is stated in the writ petition and the importance and the objectives of the association are set out, with reference to its constitution, it is not seen specifically pleaded that it is a registered or incorporated association. But since no objection on this ground was raised on behalf of the respondents, we do not think that it is necessary to further pursue the question of the maintainability of the writ petition at its instance.
(2.) IN the writ petition, the Association has prayed for a declaration that the conveyance allowance and additional conveyance allowance paid to Development Officers of the Life Insurance Corporation of India, including the Development Officers working with the 17 Branches of Jamshedpur Division of the Life Insurance Corporation of India, are exempted under Sec.10(14) of the Income Tax Act, 1961 read with Rule 2 - BB of the Income Tax Rules, 1962 . A further declaration that there should be no deduction of tax at source on the amounts of conveyance allowance and additional conveyance allowance paid to the Development Officers, is also claimed. Quashing of the two letters issued in that behalf by the Assistant Commissioner of Income Tax, TDS Circle, Jamshedpur, to the Branch Manager of the Life Insurance Corporation of India is also sought for. The writ petition was filed when the Assistant Commissioner of Income Tax, TDS Circle, Jamshedpur called upon the concerned Branch Managers to deduct tax at source in respect of the conveyance allowance and the additional conveyance allowance paid to the Development Officers as enjoined by Sec.192 of the Income Tax Act. According to the petitioner, the conveyance allowance and the additional conveyance allowance are not taxable as salary income, since in terms of Section 10(14) of the Income Tax Act, the said allowances are not liable to be included in computing the total income of a previous year of any person and consequently, the tax on those amounts could not be deducted by the employer, the Life Insurance Corporation of India, in terms of Sec.192 of the Act. Rule 2 -BB of the Income Tax Rules is also relied on. The stand of the Department is that the allowances in question were taxable and, in any event, in terms of Sec.192 of the Act, the employer as the person responsible for paying the salaries, had the obligation to deduct the income tax on the said amounts at the time of payment of such amounts. In any case, even if a portion of it was liable to be exempted or excluded while completing the assessment of a particular assessee -Development Officer, it was a matter to be decided at the time of completing the assessment and, there was no question of the Life Insurance Corporation of India not being obliged to deduct at source the tax due on these payments. We may point out that neither the Union of India, nor the Income Tax Department has filed a formal counter affidavit in this Court, though adequate time was granted to them for filing their counter affidavits. When the matter ultimately came up, counsel for the Department submitted that he was ready to argue on the relevant statutory provisions and that was how the matter was finally heard even without counter affidavits being filed by the Union of India and the Income Tax Department.
(3.) THE main plank of the submission of behalf of the petitioner is that the Rajas -than High Court in the decision, Life Insurance Corporation of India V/s. Union of India and Ors., 2003 (22) SITC 205 (Raj), has declared that no tax at source was deductible by the Life Insurance Corporation of India from out of the conveyance allowance and the additional conveyance allowance paid by it to its development officers. According to the counsel, the Department was bound by that decision irrespective of the limits on its territorial ' operation and it was bound to follow that decision in the entire Union so long as the same was not upset by the Supreme Court. Alternatively, learned counsel submitted that the said decision laid down the correct law and it will be proper for this Court to follow the ratio of that decision and to uphold the plea of the petitioner.;