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June 2025

Salary — Perquisites :— 1) Meaning of perquisite — Condition precedent for considering payment as perquisite — Amount must have been paid to the Assessee as employee — Stock options provided to ex-employees — Stock option was not perquisite — No exercise of stock option — No income chargeable to tax; 2) Assessability — Stock options given to ex-employee — No exercise of stock option — No income chargeable to tax:

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 5 mins

16. Sanjay Baweja vs. DCIT(TDS):

[2025] 474 ITR 376 (Del.):

Date of order 30th May, 2024:

Ss. 5 and 17(2) of ITA 1961

Salary — Perquisites :— 1) Meaning of perquisite — Condition precedent for considering payment as perquisite — Amount must have been paid to the Assessee as employee — Stock options provided to ex-employees — Stock option was not perquisite — No exercise of stock option — No income chargeable to tax; 2) Assessability — Stock options given to ex-employee — No exercise of stock option — No income chargeable to tax:

The Assessee is an ex-employee of a company FIPL, which is a wholly owned subsidiary of FMPL, and FMPL in turn is a wholly owned subsidiary of FPL, Singapore. In 2012, FPL introduced an Employee Stock Option Plan (ESOP) wherein FPL granted certain stock options to eligible persons, including employees of its subsidiaries. As per the plan, the Assessee was granted 1,27,552 stock options on and from 01-11-2014 to 31-11-2016 with a vesting schedule of four years. Due to the restructuring at FPL, the Assessee received a communication in April 2023 from FPL that based on the number of options held by the Assessee as on 23-12-20

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Offences and prosecution — Deduction of tax at source — Delay in payment of tax deducted at source — Delayed payment of tax deducted at source to Department with interest without objection by Department — Delay explained by assessee as due to crisis in company — No malafide intention of evasion on part of assessee — Prosecution after a lapse of more than three years quashed:

Settlement Commission — Settlement of case — Power of Settlement Commission — Immunity from penalty and prosecution — Factors to be considered — Assessee co-operated in process of settlement and made full and true disclosure — Settlement Commission exercising discretion to proceed with application and granting immunity from penalty and prosecution considering Bonafide conduct of assessee — Order of Settlement commission need not be interfered with in writ jurisdiction: