Self-declaration by employee that he had incurred exp. towards uniform is sufficient for non-deduction of TDS
Oil and Natural Gas Corporation Ltd
[2020] 122 taxmann.com 159 (Gujarat)
Short overview of the case:
Section 192, read with sections 10(14) and 201, of the Income-tax Act, 1961
Deduction of tax at source
Salary (Self certification by employees) – Assessment year 2010-11
Assessee company made payment to its employees towards reimbursement of expenditure incurred by them towards uniform without deducting tax at source for reason that such payment towards uniform allowance was exempt under section 10(14)(i), thus, no tax was to be deducted on same
Assessing Officer noted that assessee had not deducted TDS merely on basis of self-certification given by concerned employees that they had incurred such expenditure towards uniform without verifying whether such expenditure had actually been incurred by them or not
Thus, he held that assessee was liable to deduct TDS under section 192 and, accordingly, made it liable for interest under section 201(1A)
Issue was as to whether since liability to pay tax under Act was of individual employee and liability on part of employer was only to deduct tax at source, self-certification on part of employees was sufficient for assessee not to deduct tax under section 192 on payment towards reimbursement of expenditure incurred by employees for uniforms
Court has Held it as yes
It as held that ifAssessing Officer had any doubt about claim made by any individual employee, he could take upon issue during course of assessment proceedings of such individual employee.
In shot, it was concluded as under:
Self-certification by employees that they had incurred expenditure towards uniform was sufficient for assessee employer not to deduct TDS on reimbursement made by it to said employees towards such expenditure incurred by them
