IT tribunal sets aside income tax order

NEW DELHI: The Income Tax Appellate Tribunal has set aside an income tax department order holding the Employees' Provident Fund Organisation (EPFO) at fault for failing to deduct tax at source in respect of settlement or withdrawals of accumulated balances of members.

The New Delhi bench of the tribunal was deciding an appeal filed by the EPFO against the income tax authorities challenging the income tax demand, imposed in hundreds of crores, for not deducting the tax at source.

"We find considerable force in the submission of counsel for the EPFO that Assessing Officer (AO) was not justified in estimating 50 per cent of the withdrawals as being employees who had rendered less than five years of continuous service thereby coming within the ambit of Rule 9 and 10 of Part A of Schedule IV of the Income Tax Act," a bench headed by Vice President R S Syal said.

Rule 9 and 10 of Part A of Schedule IV of the Income Tax Act deal with tax on accumulated balance and deduction at source of tax payable on accumulated balance respectively.

Tax jurist Pankaj Garg, assisted with advocate Milind Garg, who appeared for the EPFO, submitted that "any payment received under the scheme of EPF Act, 1952 is cov- ered under Section 10(11) of the Income Tax Act".

Section 10(11) of the Income Tax Act deals with the Employer's contribution, which were exempted from deduction as it is not considered as employees income.

"We, therefore, set aside the order of CIT(A) and restore the matter to the file of AO with a direction that assessee (EPFO) will furnish the required details before the AO in respect of withdrawals made by employees within five years of rendering continuous service with his employer.

"The AO will also take into consideration the effect of decision of the Supreme Court in the case of Hindustan Coca Cola. Accordingly, if employee has included the accumulated balance in its total income, then the same is to be excluded while making the computation," the tribunal said.

"Further, he will take guidance from the provisions of Section 192 A and, accordingly, no deduction should be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than Rs 30,000. The short deduction is to be computed at the rate of 10 per cent in all cases where the PAN is furnished by assessee in respect of the employees from whose income tax was to be deducted," the bench added. NEW DELHI: Shashi Shanker will be the next Chairman and Managing Director of India's biggest oil and gas producer, ONGC.

Government headhunter Public Enterprise Selection Board (PESB) selected Shanker to head Oil and Natural Gas Corp (ONGC) from October 1.

Shanker is currently Director (Technical and Field Services), ONGC. He will replace Dinesh K Sarraf who retires on September 30 upon attaining superannuation age. PESB said it interviewed nine candidates including Oil India Director (HR) Biswajit Roy and ONGC Videsh Ltd Director (Finance) Vivekanand.

"PESB recommended the following name for the post of Chairman and Managing Director, Oil and Natural Gas Corporation Limited (ONGC) - Shashi Shanker," it said on its website. His name will now be vetted by the administrative ministry -- the Ministry of Petroleum and Natural Gas -and after obtaining clearance from anti-corruption watchdog CVC and CBI sent to the Appointments Committee of the Cabinet.

His appointment will be finalised after ACC, headed by Prime Minister Narendra Modi, approves it.