Western Geco International Ltd. vs Assistant Commissioner of Income Tax

Since all these 13 appeals, preferred u/s 260A of the Income Tax Act, 1961 (for short the Act) are directed against the order dated 8-6-2007 passed by the Income Tax Appellate Tribunal (Delhi Bench ''C'') (for short ITAT), in ITA Nos. 3120 to 3195/Del/2006 and as the controversy to be resolved in these appeals is the same and between the same parties as well as relating to the same Assessment Year 2003-04, therefore, for the sake of convenience, they are being decided by this common order.

By the order impugned in these appeals, the learned ITAT has upheld the order passed by the Commissioner of Income Tax (Appeals) (for short CITA) observing that there is no infirmity in the order of the CITA observing that the tax paid by the employer is a perquisite provided for by way of monetary payment and the provisions of Section 10(10CC) are not applicable.

We have heard learned Counsel for the parties and perused the record.

The following two questions of law have been framed to be answered in these appeals:

Whether the tax paid by the employer/assessee on the salary paid by it to its employees, is exempted u/s 10(10CC) of the Income Tax Act, 1961?

Whether, the Income Tax Appellate Tribunal has erred in law in holding that the income tax is payable by the appellant/assessee, under the principle of multi stage grossing up?

Relevant facts of the case are that assessees are employees of Western Geco International Ltd. which filed return of income on behalf of the employees for the assessment year 2003-04. The Assessing Officer ( for short A.O.) noticed that no perquisite was included in the income and exemption was claimed u/s 10(10CC) of the Act. The A.O. after affording opportunity of hearing to the parties, did not find favour with the assessees and accordingly did not allow the exemption as claimed by them. The A.O. after applying the principle of ''multiple stage grossing up'', assessed the income as mentioned in the assessment order. Aggrieved, the assessees preferred appeals before the Commissioner of Income Tax (Appeals) [for short CITA]. The CITA, by its order dated 21-07-2006 partly allowed the appeal. Again aggrieved by that order, the assessees preferred the appeals before the ITAT, which were dismissed by the order impugned in these appeals.

At the outset, learned Counsel for the assessees/appellant has submitted that the Division Bench of this Court by its order dated 24-7-2009 has already set aside the impugned order dated 8-6-2007 passed by the ITAT New Delhi Bench ''C'' in ITA Nos. 3120 to 3195/Del/2006 (Assessment Year 2003-04) and the matter has been remanded for reconsideration by the ITAT in the light of the subsequent development as mentioned in the said order whereby as many as 28 appeals, arising out of the same judgment impugned in the present appeals, have been disposed of by a common order. Learned Counsel for the appellant has further submitted that the present appeals before this Court have also been included in ITA Nos. 3120 to 3195/Del/2006. In such circumstances when the order impugned has already been set aside and the matter has been remanded to the ITAT, these appeals be also disposed of in terms of order dated 24-7-2009 passed in Income Tax Appeal No. 206 of 2007 Western Geco International Ltd. v. Assistant Commissioner of Income Tax Dehradun along with 27 other appeals.

Learned Counsel appearing on behalf of the revenue/Income Tax, Sri Arvind Vashist, has fairly conceded to the above fact.

Since the order impugned stood already set aside and the matter has been remanded to the ITAT for reconsideration, all these 13 appeals are liable to be disposed of in terms of order dated 24-7-2009 passed in Income Tax Appeal No. 206 of 2007 Western Geco International Ltd. v. Assistant Commissioner of Income Tax Dehradun along with Income Tax Appeals No. 208 of 2007, 209 of 2007, 210 of 2007, 211 of 2007, 214 of 2007, 219 of 2007, 224 of 2007, 227 of 2007, 229 of 2007, 230 of 2007, 238 of 2007, 246 of 2007, 248 of 2007, 249 of 2007, 254 of 2007, 255 of 2007, 256 of 2007, 259 of 2007, 260 of 2007, 263 of 2007, 264 of 2007, 265 of 2007, 266 of 2007, 267 of 2007, 268 of 2007, 271 of 2007 and 273 of 2007. Admittedly, the controversy involved in the present appeals is squarely covered by the said order.

Accordingly, all these 13 appeals are disposed of in terms of the order dated 24-7-2009 passed by the Division Bench of this Court in Income Tax Appeal No. 206 of 2007, Western Geco International Ltd. v. Assistant Commissioner of Income Tax Dehradun along with 27 abovementioned appeals. In view of the above judgment dated 24-7-2009, these matters are remanded for reconsideration by the I.T.A.T. The impugned order dated 8-6-2007 stands set aside.