Swatanter Kumar, J.

By this order we would dispose of above 8 income-tax appeals preferred under s. 260A of the IT Act, 1961 (hereinafter referred to as the Act).

2. M/s HCL Info System Ltd., the assessee, deals with computer hardwares. They are liable in law for proper tax deduction at source on the salary paid to its employees which are posted in various parts of the country in the offices of the assessee. For the purpose of verification, notice under s. 136(6) of the was issued to the assessee on 25th Sept., 1998, in response to which senior manager of the assessee attended the proceedings. According to the AO, a survey was conducted under s. 133A of the on 1st March, 1999, and it came to the notice that employees were getting conveyance allowance and leave travel allowance which were not considered for purpose of deduction of tax from salary. Further, according to the Revenue, the company did not obtain any documentary evidence with regard to these two benefits given to the employees and which was obviously treated as expenses of the company. A specific query was raised for explaining the reasons for (not) deducting tax on conveyance allowance as well as on LTA. The stand of the company was that the assesses was under bona fide belief that conveyance allowance was not liable to tax and was thus not included in the estimated income of the employees. It was also stated that the assessee as an employer was not required to precisely compute the taxable income of the employees and provisions of s. 201(1) were not attracted in the facts and circumstances of the case.

3. After perusing the record the AO held that the demands had been made merely on the basis of declaration of employees certifying that the amount was spent and there was no supporting document that actually the amount was incurred. The quantum of short deduction was estimated on the basis of total amount of conveyance allowance which was not taxed was Rs.7,01,838, LTA not taxed (to the extent of 40 per cent) was Rs.12,52,240 and held that the tax deduction should have been to the extent of Rs.5,47,141, thus made the payment under s. 201(1) of the said amount and interest under s. 201(1A) totaling to Rs.13, 65, 116.

4. Aggrieved there from, an appeal was preferred by the assessee before the CIT (A) who vide a detailed judgment and while relying upon judgments of the Court accepted the appeal of the assessee and set aside the demand on account of conveyance allowance, LTC as well as interest imposed thereupon. The matter was thus remanded to the AO for recalculation in accordance with law. The finding of the first appellate authority reads as under:

"I have considered the submissions of the appellant which are well founded. The employees are allowed LTA after availing 5 days leave by them and on submission of statement giving details of journey performed containing place visited, mode of travel, number of persons and fare, etc. Sometimes the amount sanctioned to the employee is less than the amount claimed and is based on the entitlement of the employee. No details of ticket number, etc. were being obtained by the appellant-company. The CBDT has been issuing circulars every year for guidance of the DDOs for deduction of tax at source from the salary income paid to the employees. However, unfortunately, no specific format or guidelines have been issued for obtaining the relevant details to verify that the journey has actually been performed by the employees. The Honble Andhra Pradesh High Court in the case of P.V. Rajgopal vs. Union of India 1999 (151) CTR 442: 1998 (233) ITR 678 (AP) had referred to the CBDT circular issued every year to provide guidance to the DDOs. The Court had observed that the circulars advised the drawing and disbursing authority to satisfy itself that the computation of taxable salary income is in order with reference to deduction availing to the employee. This does not convert him into an ITO or an adjudicating authority as many erroneously believe. All that it means is that the assessee must declare his claim so that with reference to s. 201, proviso, he can say that he had good and sufficient reasons not to deduct tax at source in respect of any income to avoid imposition of penalty. The appellant had accepted the claim of the employees of having performed journey and allowed them the LTA and considered the same to be exempt from taxation as per s. 10(5) r/w r. 2B of the Rules. The employer has no reason to suspect or doubt that the declarations given by the employees are not correct, particularly when the tax Department has not prescribed any specific details or format in which the declarations are to be submitted by the employees. Further, it is for the AO adjudicating in the individual assessment of the employee to examine this fact whether the claim of exemption under s. 10(5) of the has been made correctly or not. The employer cannot be given the responsibility of the adjudicating authority to sit in judgment over the claim of the employee which can only be done by the AO. There is nothing on record to show that the conduct of the employer was mala fide and the payments have been made without deduction of tax at source with some ulterior motive. It may further be noted that no addition for wrong claim of LTA has been made by the AO in the case of the individual employees most of whom have been filing their individual returns., Considering these facts and also keeping in view the decision of Honble Andhra Pradesh High Court in P.V. Rajgopals case (supra) as well as the various decisions of learned Tribunal, Delhi Bench, I am of the view that the learned AO was not justified in rejecting the claim of exemption of LTA under s. 10(5) of the and considering the same as a taxable income of the employee and determining short deduction of tax under s. 201(1) of the. The short deductions of tax determined by the learned AO for the respective years for LTA are, therefore, deleted."

5. The Revenue accepted the above findings in regard to other matters, however, impugned the order of the CIT (A) in regard to grant of the relief in relation to LTA. The Tribunal vide its order dt. 24th June, 2004, accepted the findings of the first appellate authority and held as under:

"The learned counsel for the assessee has also invited our attention to the circulars issued by CBDT to the DDOs from time-to-time in connection with the tax deduction from salaries to show that they were not specifically required even by CBDT to verify the evidence regarding the incurring of actual expenditure by the concerned employees before treating the LTA as exempt under s. 10(5) for the purpose of estimating the salary income and deducting tax therefrom. Having perused these declarations filed by the concerned employees as well as the Boards instructions issued in this regard to the DDOs, we find that there was sufficient material available on record for the assessee to entertain a bona tide belief that the LTA granted to its employees was exempt under s. 10(5) and thus, the estimate of salary made by it for the purpose of deduction of tax at source for salary income as required by the provisions of s. 192 based on such bona fide belief was certainly a fair and honest estimate. It, therefore, follows that the obligation cast on the assessee-company under s. 192 was duly discharged by the assessee-company and there being brought on record by the Revenue to show any instance of any of the employees having not actually incurred the LTA granted to them on their travel, we are of the view that there was no case to treat the assessee-company as an assessee in. default in respect of the short deduction, if any, of the tax deducted at source from such salary income merely because the actual proof/evidence of having actually incurred the LTA on travel expenses was not verified by it. As such, considering all the facts and circumstances of the case as well as the legal position emanating from the various judicial pronouncements cited by the learned counsel for the assessee, we are of the considered opinion that the assessee-company had complied with the requirements of s. 192 and there was no case to treat it as an assessee in default under s. 201(1) as well as to charge interest under s. 201(1A). In that view of the matter, we hold that the learned CIT(A) was fully justified in cancelling the orders passed by the AO under s. 201(1)/201(1A) for the years under consideration and upholding his impugned order, we dismiss the appeals filed by the Revenue."

6. The AO had proceeded on the basis that such a claim could not be granted on the basis of declaration to obtain the exemption permissible under s. 10(5) of the. If the AO was not satisfied with the declaration furnished by the employees, nothing prevented the AO to direct the assessee to produce the supporting documents before him to show that expenses claimed were actually incurred by the concerned employees. The authority of the AO to ask for such documents and obligation of the assessee to produce such documents cannot be disputed in law. Even the principles of common prudence would require that such documents if demanded should be produced before the authorities concerned. Provisions of s. 192 place an obligation on any person responsible for paying any income chargeable under the head salaries to deduct income-tax at the time of payment in accordance with the rates in forces. The expression salary in this provision has a wider meaning and is intended to cover the amounts payable to an employee by an employer unless they were otherwise exempted from levy of tax on account of salary. Provisions of s. 10(5) of the carve out an exception to this tax liability. In case of an individual the value of any travel assistance extended by or due to him from his employer in connection with his leave to travel in India would not be an amount included in the total income computed for the purposes of computing total income. The restriction as imposed in the proviso to this sub-section is only that the amount to be exempted under the clause cannot exceed the amount of expenses actually incurred for the purpose of such travel. The provisions of s. 192 of the are to be read in conjunction with the provisions of s. 10(5) of the for their proper appreciation and application for computing total income liable to tax and consequential liability to deduct the tax at source. It is the case of the assessee before us that the estimated tax arrived at by the employer was bona fide and on the assumption that the benefit taken by the employee of traveling (LTA) in compliance with the policy of company was not liable for deduction of tax at source. The bona tides of the assessee were accepted by the first appellate authority and were duly confirmed by- the Tribunal. Whether in a given case the intention of the assessee was bona fide at an estimated income of its employees for the purpose of deduction of tax at source, is primarily a matter of fact. In the facts of the present case, it is not even a mixed question of fact. A Division Bench of this Court in the case of CIT vs. S.R. Fragrances Ltd. 2004 (187) CTR 4: (2004) 270 1TR 560 (Del) has clearly enunciated the principles as to what would be the substantial question so as to enable this Court to exercise its powers under s. 260A of the. In fact, it has been held in different cases by different High Courts that reimbursement of expenditure for maintaining conveyance having been treated by the employer as an allowance not taxable and, therefore, not deducting tax at source, does not raise any question of law but is primarily a question of fact.

7. Reference in this regard can be made to the judgments of Gujarat High Court in the cases of CIT vs. Oil and Natural Gas Corporation Ltd. 2000 (164) CTR(GUJ) 129 [LQ/GujHC/1998/829] : (2002) 254 1TR 121 (Guj); ITO vs. Gujarat Narmada Valley Fertilizers Co. Ltd. 2000 (163) CTR 554 : 2001 (247) ITR 305 (Guj) and a judgment of this Court in the case of CIT vs. Nestle India Ltd. 2000 (159) CTR (Del) 243 [LQ/DelHC/2000/95] :2000 (243) ITR 435 (Del) [LQ/DelHC/2000/95] .

8. In the case of Gujarat Narmada Valley Fertilizers Co. Ltd. (supra), the Court had expressed the view that ultimately the liability was of the employees and the Court has held as under:

"At the same time, however, it cannot be said that the Tribunal has committed an error of law in not considering the circumstances including the circumstance that even though notices were issued in 1993-94, the matter was not pursued further and that a rectification order was passed in favour of an employee. Ultimately, it cannot be gainsaid that the liability is of employees. Even in respect of an individual employee, when an order of rectification was made by the authorities and deduction was made, the Tribunal, in our opinion, cannot be said to be wrong in recording a fining that there was an honest and bona fide belief on the part of the assessee that regarding other allowances also, the case would not fall under s. 201 if the amount was not deducted at source."

Furthermore, in the case of Oil and Natural Gas Corporation Ltd. (supra), the Court also took the view that where the reimbursement was granted for use of one vehicle owned and possessed by the employee for expenses incurred in undertaking official journeys and payment was made on the employee issuing a certificate that he incurred more expenses than the amount reimbursed would show that expenses were being incurred towards actual expenses and the estimate made by the employer on the income of the employee at the time when such amount was paid, would entitle the benefit to the employee of s. 10(14) of the.

9. The above enunciated principles of law clearly show that in the facts and circumstances of the present case, no question of law arises for consideration of this Court. The AO considered it appropriate not to direct the assessee to support the declarations by appropriate documents, as such, the opinion expressed by the said officer is not substantiated by any material. The estimated income reflected by the employer thus was based on bona fide estimation and on this ground alone, more particularly, in absence of any specific direction of the AO as afore-referred, we are unable to find any fault in the concurrent findings recorded by the first appellate Court and the Tribunal.

10. For the reasons aforestated, we are of the considered view that no question, much less a substantial question of law, arises in the present case and the same is dismissed while leaving the parties to bear their own costs.