Life Insurance Corporation of India and Another vs Income Tax Officer (TDS), Gajapati Nagar, Berhampur and Others

Bench: 2 — S. Muralidhar

In Brief

LIC challenged an order by the Income Tax Officer (TDS) that held LIC failed to deduct tax at source on conveyance and additional allowances paid to 12 development officers, resulting in a short deduction of Rs 1,50,669 in FY 1999-2000. The Supreme Court dismissed the petition, holding that after the 1989 amendment to Section 10(14) of the Income Tax Act, the legal position changed: only expenditure reimbursed by LIC qualifies for exemption, not amounts earned by development officers themselves. Earlier CBDT circulars on which LIC relied ceased to apply from 1989-90 onwards. LIC was therefore statutorily obligated to deduct tax at source on these allowances.

The lawyer headnote and full judgment text are available to registered users.

Income Tax Tax Deduction at Source (TDS) Section 10(14) Exemptions Employee Allowances Direct Taxes

Read the full judgment & headnote. It's free.

Register to read the complete Supreme Court judgment text and the headnote, and to search 1 lakh+ Supreme Court judgments by meaning. It is a free service.