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I am PSU employee. My employer issued a FORM 16 for AY 2011-12, which is not as per Income tax Act( Gross total income not reflating car perk valuation correctly and exemption U/s 10 includes rule 3(2)(A) rebate Rs 1800 or Rs 900 per month) . Now, my assessment for A.Y. 11-12 under scrutiny.
My assessing officer issued a notice and demand to submit some information regarding exemption u/s 10. I replied all the points as desired by ITO. ITO examine the reply and said that exemption taken by you for Car @ 1800/- per month & chauffer (driver) @ 900 per month is not allowed as exemption and required to be added in salary income and you have to pay tax on that.
I examine my Form 16 and found that in Gross salary, deduction under Rule 3(2)(A) for car Rs 1800 and for driver @ 900 per month has not been deducted. I approach to our payroll department they said that it is very old practice to show the above amount in heading: Income exempted U/s 10” in form 16 OR it is deducted for total income under this head and overall impact on tax is NIL.
My ITO has issued a new notice, content of notice is as follow:
1. Ongoing throng the detail submitted by you in respect of income not be included in the total income along with reply dated 10.6.2013, it was noticed that you have claimed exemption in respect of conveyance expenditure of Rs. 21,600/- and chauffer at Rs 10,800 under rule 3(2)(A) of the income tax rule 1962.
2. In this regard, you are requested to please explain as to why amount of Rs, 21,600 and 10,800 being amount claimed exempt in respect of car and chauffer respectively may not be added to your income and penalty proceedings u/s 271(1)(c ) of the income tax act may not be initiated for furnishing inaccurate particulars of your income.
My question to you when my employer has not been given me a correct From 16 then why should I going to be punishes.
I request to all of you please suggest me positive remedy available under IT act and help in preparing reply of notice.
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