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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Dr. B. R. R. KumarSh. Yogesh Kumar US
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals have been filed by the assessee against the orders of ld. CIT(A)-1, Noida dated 15.06.2016 and 20.06.2016.
Since, the issues involved in all these appeals are identical, they were heard together and being adjudicated by a common order.
The Assessee is a group company of Computer Science Corporation US (CSC). Consistent with global policy, the assessee has formulated education assistance policy for its employees in India CSC. The assistance for the employee has , 4716 & 4717/Del/2016 2 Computer Sciences Corporation India Pvt. Ltd. been given for pursuing higher education leading to Master’s Degree in Science, Computer Application and Management. As per the policy an employee receiving educational benefit of Rs.55,000/- and above is required to enter into service agreement for a period of one year from the date of completion of course and in case of the employee leaving the services prior thereto, he/she is liable to refund the entire amount paid by the assessee towards the course. It was submitted that the purpose of education assistance was not to provide any benefit to the employee but to infuse specific skills in the employees for efficiently completing the jobs assigned. Criteria for employees to avail assistance are:
• The program is applicable only to the regular and full-time employees of CSC India; • Employees should be in employment during the course period; • Such employees would be identified by the Company based on the job description.
During the Financial years 2011-12 & 2012-13 (AY 2012-13 & 2013-14), expenditure of Rs.2,10,24,261/- and Rs.55,41,143/- was incurred by way of reimbursement of course fee for higher education, accounted as "training expenses". The revenue authorities – ACIT, TDS treated the amount of the reimbursement of education cost as salary paid to the employee on which tax is to be deducted. It was also held that this is perquisite to be computed for each of the employee with respect to the reimbursement of training cost alongwith applicable interest. Holding thus, the ACIT-TDS determine TDS liability @ , 4716 & 4717/Del/2016 3 Computer Sciences Corporation India Pvt. Ltd. 30% and interest u/s 201(1A). The ld. CIT(A) confirmed the order of the ACIT-TDS summarily holding as under:
“The provisions of section 17(2)(iv) of I.T. Act, 1961 provides that any sum paid by the employer in respect of any obligation which but for such payment would have been payable by the assesses, i.e., the employee is perquisite and is to included in the salary income of the said employee. Once any payment is part of the salary the provisions of section 192 are applicable and the TDS is required to be deducted at the time of the payment. In the instant case but for the payment made by the employer the employees who underwent some training would have ended up paying the required amount from their own pocket. Even if the employee chose to undergo the said training in his own discretion and not as requirement of its job the fact remains that but for the payment made by the employer it would have been paid by the employee. There is no denying that the payment by way of reimbursement of the cost of training was in course of the subsistence of the employment and because of the employer and employee relationship. In view of this the stand taken on behalf of the appellant is not correct and cannot be sustained in the eyes of the law. Conversely, the findings of the ld. A.O. on this issue is correct and is therefore confirmed.
6. On the issue of liability to deduct TDS on the provisions made in the books of accounts the appellant though its director, Sh. V. Srinivas Raghavan filed a declatory letter dated 13/06/2016 where it was stated that the appellant has suo moto disallowed the year end provisions on which the Id. A.O. has returned a finding that TDS should have been deducted under section 40(a)(i)/ 40(a)(ia) of I.T. Act, 1961. The appellant cannot approbate and reprobate on the same issue in the same proceeding. Once the appellant has itself admitted and stated that the TDS was required to be deducted on the year end provisions before one assessing officer it cannot plead , 4716 & 4717/Del/2016 4 Computer Sciences Corporation India Pvt. Ltd. before another assessing officer that the same was not required in law. The stand of the appellant on this issue is incorrect in law. The findings of the Id. A.O. on this issue is therefore correct and is confirmed.”
We have gone through the entire contents and find that the order of the ld. CIT(A) has not deliberated on the submissions given by the ld. AR with regard to payment of the taxes by the recipients, whether the payment is in the nature of reimbursement or perquisite and on the issue of accrual of income. Hence, in the interest of justice, we hold that the matter needs to be adjudicated by the way of speaking order by the ld. CIT(A) after affording an opportunity to the assessee.
In the result, all the appeals of the assessee are treated as allowed for statistical purposes. Order Pronounced in the Open Court on 20/10/2022.