ORAL JUDGMENT

(PER : HONOURABLE MR.JUSTICE KS JHAVERI)

1. By way of these appeals, the appellant- Revenue has challenged (1) the judgment and order dated 16.11.2012 passed in ITA No. 184/Ahd/2010 for AY 2009-10, (2) ITA No. 609, 611/Ahd/2010 for AY 2009-10, (3) ITA No. 1343/Ahd/2010 for AY 2009-10, (4) ITA No. 185/Ahd/2010 for AY 2009-10, and (5) the judgment and order dated 11.1.2013 passed in ITA Nos. 153/2012 for AY 2007-08, (6) ITA No. 154/2012 for AY 2008-09, (7) ITA No. 156/2012 for AY 2006-07, (8) ITA No. 157/2012 for AY 2007-08, (9) ITA No. 158/2012 for AY 2008- 09, (10) ITA No. 283/2012 for AY 2006-07, (11) ITA No. 284/2012 for AY 2007-08, (12) ITA No. 285/2012 for AY 2008-09, (13) ITA No. 286/2012 for AY 2009-10, (14) ITA No. 329/2012 for AY 2006-07, (15) ITA No. 330/2012 for AY 2007-08, (16) ITA No. 331/2012 for AY 2008-09, (17) for ITA No. 152/2012 for AY 2006-07.

2. While admitting these appeals, this Court has framed the following substantial question of law:

“Whether on facts and in law the ITAT was right in holding that payment of uniform allowance etc. to the employees by the assessee is liable for FBT and by holding so it did not consider the fact that the payment of uniform allowance was nothing but additional salary paid in the form of an allowance within the meaning of section 17(1) (iv) attracting the TDS provisions of section

192 of the IT Act ?”

3. The facts of the present case are that for verification of compliances of TDS provisions survey were conducted in the offices Oil and Natural Gas Corporation Limited at its following offices:

1.ONGC workshop at Baroda

2.ONGC Basin office at Baroda, and

3.ONGC Ankleshwar Asset, falling under the jurisdiction of this office.

4. At the time of survey, besides details of contract payments and other miscellaneous payments, the salary payments to the employees was asked for, and verification was focused on salary and contract expenses incurred by the respective offices of the ONGC. That during the survey/verification of the salary details, it was informed that salary are prepared on computer and therefore, the concerned officers were requested to produce the details of payment of salaries to the employees and to produce form no. 16 for the preceding year for understanding and to provide the salary slips for the month of January, 2009.

4.1 The salary slips shown for employees for January, 2009 reflected that besides salary there was substantial amount of money has paid to each employee against the item CMRE under the column of “Earnings”. The cumulative receipts of above CMRE amount were reflected under the column “YTD Earning” and this amount was exceeding Rs. 50 thousands in each case. Below the above CMRE amount, there were other allowances under the earnings named as “OTHER (T)” and OTHER (NT). The amount of earnings reflected under the above allowances was substantial (in the range of Rs. 1 lakh).

5. On enquiring it was told that the amount of allowances shown as OTHER(NT) was presenting the amount of uniform allowance. On verification from Form 16 produced for test check for FY 2007-08, it was observed that the amount of (NT) allowances was not reflected in Form 16 for the relevant FY i.e. 2007-08.

5.1 The above facts were enquired for the FY 2008-09 as well (as Form 16 was not yet due for this year). But no evidence was produced to justify the non inclusion of these allowances in salary and no reasonable explanation was offered in support of not including the allowances reflected as CMRE and OTHER (NT) in the pay slip of salary income, therefore, the assessee was informed that it has been observed that in your ONGC office the employees are being paid certain allowances in the form of uniform allowances CMRE (Conveyance Maintenance Allowance) and some other allowances which are termed as NT (Non Taxable) and these are not included in the total salary of the employee. And the tax is not deducted on this allowances, therefore, this was enquired at the time of survey verif