Salary

Petitioner was called upon to produce the advertisement, call letter, interview letter, offer letter, medical letter and other requisite documents to show that the petitioner's appointment for the post of police constable was genuine

Petitioner relied on a letter which was neither on proper official letter head nor stamped, which document was disputed by the department being fake one, therefore, subsequent documents could not be relied upon

Once the competent authority probed into the fake appointments and salary drawn scam and in the terms of the findings action was taken against the beneficiaries, such factual aspect could not be looked into in the constitutional jurisdiction under Art. 199 of the Constitution

Terms and conditions of service included salary and only the Service Tribunal had jurisdiction to decide such issue

Petition under Art. 199 of the Constitution being not maintainable was dismissed.

Financial exigency did empower the employer to consider different yardstick for revision in the salary of different categories of its employees

All employees could not claim to be treated alike irrespective of their grades, domain and class

Clear distinction existed between the employees covered by the labour laws (i.e. workmen') and other statutory dispensation vis-a-vis employees in 'Executive and Officers' cadre

For good governance grouping by the employer of its employees serving in lower Basic Pay Scales into one category and those serving in higher Basic Pay Scales to another category for the purpose of granting greater monetary benefit, could not be challenged on ground of arbitrariness or unreasonable classification and as violative of Art. 25 of the Constitution.

Salary of a person is chargeable to income tax so far as chargeability of tax of allowance is concerned, in that context S.12(2)(c), Income Tax Ordinance, 2001 is relevant

Section 12(2)(c), Income Tax Ordinance, 2001, categorizes the allowances and after specification of allowances Cl. (c) starts in the middle from the expression "but"

Expression "but" segregates other allowances from the allowance which is solely expanded in the performance of the employee's duties

Use of words "shall not" after "but" means that the legislature intended through the above clause that the allowance expended in the performance shall be excluded from the definition of salary.

Applicants were minor sons of deceased who through their mother assailed entitlement of their grandmother in distribution of salary of deceased

Validity

Parents of deceased, under S.2(5) of Federal Employees Benevolent Fund and Group Insurance Act, 1969, included under the definition of term "family"

Where term "legal heir" or "parents" was used, the same fell within the definition of term of "family" and they were entitled to receive Tarka left by deceased

Mother of deceased was legal heir and family member of deceased, who was wholly dependent upon him and was entitled to have share in salary of deceased as per Sharia according to her sect

High Court declined to interfere in order passed by Trial Court as it did not suffer from any legal infirmity

Application was dismissed in circumstances.

Order of Appellate Authority treated such awards as part of perquisites for same having been paid to employees not in terms of appointment

Order of Tribunal treating such awards as part of salary and not as perquisites

Validity

Record showed that such awards were paid on basis of individual performance and not in accordance with terms of employment

Term "salary" as defined in S.16 of Income Tax Ordinance, 1979 included a number of payments to be considered as part of salary

Wherever term "include" was used, intention of legislature would be to give same widest possible meaning

Definition of term "salary" was wide enough, thus, such awards, though not included therein, would fall therein

Such awards had been paid as incentive to employees, which was exclusive decision of management, thus, same could not be considered to be perquisite to an employee

Such award would fall under S. 16(2)(a)(ii) as part of salary and not as part of perquisites

High Court upheld order of Tribunal in circumstances.

Assessee included orderly allowance, special allowance for officers, drinking water allowance, stipend, honorarium, cash reward for meritorious services and good conduct pay in salary

Assessing Officer excluded such payments from salary, and made addition being perquisites in excess of 50% of the salaries paid

Validity

Appellate Tribunal disagreed with the assessee that "cash reward for meritorious services" was paid to all the employees and this payment was in the nature of "bonus", which was part of salary

Payment made to employees on account of "cash reward" could be equated with "bonus"

Nature of both these payments was totally different than each other

"Cash reward for meritorious services was a perquisite and not part of salary; its nature was different than bonus and the treatment given to said item of payment was legally correct at the assessment as well as first appeal stage.

Options collected by Company were sent in bulk to the Commissioners of various regions but there was no proof of their receipt in the respective regions

Even postal or courier receipts had also not been annexed showing that these elections were sent through courier or postal services

Cl. (8) of S.12 of the Income. Tax Ordinance, 2001 clearly empowers the Commissioner to allow such elections even submitted late to him after specified date

Information/details of elections had been provided by the assessee

Verification of receipt and passing of order to accept or reject such elections vested with the Commissioner

Fate of the case would hinge upon passing of order of the Commissioner in positive or negative

Appellate Tribunal declined to by-pass the powers of Commissioner contemplated in provisions of Cl. (8) of S.12 of the Income Tax Ordinance, 2001 and the matter was remanded to the Taxation Officer with the directions to verify as to how many employees were there and when they actually filed their options with the concerned Commissioners in the light of provisions of S.12(8) of the Income Tax Ordinance, 2001 for assessment of tax on their income at average rates

Tax liability could only be re-determined after passing of order by the Commissioner under S.12(8) of the Income Tax Ordinance, 2001

Action was directed to be taken against the remaining employees as provided under the law after providing a reasonable opportunity of hearing to the Company.

Taxpayer contended that actual expenses for vehicle running incurred by the Executives were reimbursed on actual expenses basis, which had been incurred by them on behalf of the employer-company in performance of their duties; and such payments stood excluded from the definition of `salary' and perquisites under S.12 (2)(d) of the Income Tax Ordinance, 2001 as the addition had been made on the presumptions that the company maintained vehicles had been provided to its executives for free use

Validity

For immediate preceding year under the similar facts the Assessing Officer had curtailed the claim of expense on account of reimbursement of expenses for vehicle running by 50%

Appellate Tribunal ordered that the addition shall be reduced in all the years by an amount equal to 50% of the payments under the head "reimbursable expenses for vehicle running".

Not a State bounty, but a right of incumbent performing duty against his appointment.

Running and maintenance expenses of a vehicle provided by the employer to the employee directly incurred by the employer come within definition of `perquisite' and will be included in the taxable income of the employee (assessee)

Principles.

Company/assessee having filed return after settlement of the accounts by its employee with the Tax Department by payment of tax as per return filed, the rigors of S.24(c) of the Income Tax Ordinance. 1979 became inapplicable

Purpose behind the legislation was not to disallow verifiable expenses but to ensure prompt and timely payment of taxes by the people who receive salary

Spirit of law should not be ignored as such provisions should also only be invoked when they apply in letter and spirit on the facts and circumstances of the case

Rectification was a void action and its disapproval by the First Appellate Authority was quite justified.

Civil servant who was a Police Officer was compulsorily retired from service on some complaint made against him, but order of his compulsory retirement was quashed by Appellate Authority and fresh enquiry was ordered against him

Civil servant in fresh enquiry was honourably acquitted, but entire period of his suspension and spent on compulsorily retirement was treated to be counted as leave without pay on ground that in previous enquiry allegations against him were fully proved, but witnesses were won over by him in fresh enquiry, thus civil servant was not entitled to salary for period he had remained under suspension and compulsory retirement

No charge having been proved against civil servant in second enquiry held against him, payment of salary for period he remained under suspension and illegal retirement could not be withheld by way of punishment as a civil servant could only be refused his salary if he had received punishment of dismissal or removal from service or reduction in rank for

Leave to appeal granted to consider question whether increments on promotion to N.P.S. 18 were admissible only after incumbent enters seventh year of service.

Salary -Salary-Suit for arrears of salary- Not maintainable.

Salary Salary-"Profits in lieu of salary"-Employment for fixed term-Termination of employment before expiry of term-Amount paid under contract of employment-Whether compensation for loss of employment-Whether profits in lieu of salary

Indian Income-tax Act, 1922, S. 7 (1) (prior to amendment in 1955).

Salary -Perquisites-Pension scheme for employees-Employer's contribution whether assessable w income of employee-Test of assessability-Contingent interest whether sufficient-Indian Income-tax Act, 1922, S. 7 (1).

S. 7 (1), Expl. 1(v) Salary Trust for insuring employee's lives Contribution of employer towards annual premium Whether taxable as "perquisite" of employee.Held, that the assessee did not obtain an indefeasible title or vested interest in the payments made by the employer in the years in which the payments were made, and the amount m question was not therefore assessable as a "perquisite" of the assessee under sub clause (v) of the Explanation I to section 7(1) of the Income-tax Act.

S.7(1)-Income-Salary-Pension scheme for employees-Employer’s contribution- Whether assessable as income of employee - Construction of terms or scheme-Creation of trust, effect of-Test of assessability-Mere contingent interest or expectancy, whether sufficient-Employer's contribution to deferred annuities-Assessability.

Ss. 2(6 C)(fl), (iii) & 10(4 A)(a)Business expenditure Salary Amount paid as salary to Director having substantial interests in Company Whether can be disallowed or reduced.

­Gift by former employer in consideration of loyal arid meritorious services : [Mahesh Anantrai Pattani v. Commissioner of Income-tax (1959) 35 I T R 734 reversed].

Compensation for termination of employment-Provision in agreement of employment for payment of compensation -Assessee agreeing to give up all claims-Not to accept employment for specified period against interests of employer-Nature of compensation.