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Assessee believed that conveyance allowance is exempt and accordingly computed TDS u/s. 192 excluding conveyance allowance. The Assessing Officer treated the assessee as assessee in default and raised demand u/s. 201(1) and also levied interest u/s. 201(1A). The Tribunal allowed the assessee’s appeal and cancelled the demand.
On appeal by the Revenue, the Allahabad High Court upheld the decision of the Tribunal and held as under:
“Assessee was under bona fide belief that the conveyance allowance was exempt u/s. 10(14) and tax was not deductible at source and therefore assessee could not be treated as assessee in default for charging interest u/s. 201(1A) of the Act.”
