( 1 ) ASSESSEE is a company having its registered office at Bangalore. It filed its annual TDS returns for the assessment year 1997-98. This return came to be scrutinized. It was found that TDS was not deducted in respect of shares issued to the assessees employees. A show cause notice dated 8. 6. 1999 was issued proposing to treat the assessee as a defaulter for failing to deduct tax at source Under Section 201 (1) of the Act. The assessee objected to this notice by furnishing its reply in terms of a letter dated 2. 8. 1999 and 28. 9. 1999. The assessing officer passed an order on 7. 10. 1999. Aggrieved by the said order, an appeal was filed before the Commissioner of appeals. He also rejected the appeal filed by the assessee. A second appeal was filed and the Tribunal has allowed the appeal filed by the assessee. Revenue is therefore before us. The following two questions of law are framed: 1. Whether the Tribunal was correct in holding that the assessee company was not liable to deduct TDS Under Section 192 of the Act over the issue of its shares under stock option plan to its employees at a concession rate as it cannot be treated as a perquisite (salary) and therefore the asses

Click Here to Read the rest of this document