Sec. 89 relief is available in respect of arrears of perquisites: ITAT
Facts:
a) During the relevant year, arrears in lieu of employer’s contribution to the newly implemented ‘Defined Contribution Scheme’, were received by the assessee-employee from his employer GAIL. The assessee had claimed relief under section 89.
b) Assessing Officer (AO) held that section 89 is applicable where an assessee is in receipt of a sum in the nature of salary, being paid in arrears, or in advance. On the contrary, the payments made by the employer were perquisites under section 17(2) as per Form No. 12BA, and this amount could not qualify for relief under section 89(1) and, therefore, relief claimed under section 89(1) was disallowed.
c) CIT(A) upheld disallowance and held that section 89 does not talk of perquisite, but of, inter alia, salary, whereas the relief claimed by the assessee pertained to ‘perquisite’ and not ‘salary’. Aggrieved-assessee filed the instant file before the tribunal.
The Tribunal held in favour of assessee as under:
1) Rule 21A of the Income-tax Rules, 1962 pertains to salary with respect to which section 89 grants relief. The said rule does pertain to perquisite as well. Rule 21A(1)(a) states that where any portion of the assessee’s salary is received in arrears or in advance, the relief under section 89 shall be in accordance with the provisions of rule 21A(2). Hence, it related to the contribution under consideration also.
2) Further, Section 192(2)(A) provides that where an assessee, being a government employee in a company, is entitled to relief under section 89(1), he must furnish particulars for the purposes of TDS, as prescribed. Rule 21AA provides the prescription, in the shape of form 10E. Under Form 10E, the particulars required to be furnished are those of income referred to in rule 21A.
3) Rule 21A, as noted, talks of, inter alia, income by way of salary. ‘Salary’, as per section 17(1)(iv), includes perquisites. The contribution in question was admittedly a perquisite. So, the circle is complete.
4) Therefore, relief under section 89 was available qua a perquisite. Rule 21A and Form 10E do relate to the contribution in question. Rule 21A(1)(a), read with Rule 21A(2) applied to the assessee’s claim. [2018] 97 taxmann.com 618 (Agra – Trib)
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