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Section 17(2) of the Income-tax Act, 1961 - Salaries - Perquisite - Assessment year 1999-2000 Assessee-company was not liable to deduct TDS under section 192 in respect of issue of its shares under a stock option plan to its employees at a concessional rate as it could not be treated as a perquisite (salary) [In favour of assessee] In view of the Supreme Court decision in CIT v. Infosys Technologies Ltd. [2008] 297 ITR 167, the assessee-company was not liable to deduct TDS under section 192 in respect of the issue of its shares under a stock option plan to its employees at a concessional rate as it could not be treated as a perquisite (salary). Arvind and M.V. Seshachala for the Appellant. Ms. Saina Mary Thomas and Chander Kumar for the respondent. JUDGMENT Deepak Verma J. - Sri Arvind, learned counsel appeared on behalf of the appellants and Miss Saina Mary Thomas, learned counsel appeared for the respondent. 2. Heard on admission. Records perused. 3. The Revenue is in appeal under section 260A of the Income-tax Act, 1961 against the order dated July 31, 2002, passed by the Income-tax Appellate Tribunal, Bangalore Bench, in Appeal ITA No. 296/Bang/2001 for the assessment year 1999-2000. 4. The appeal has been admitted on the following substantial questions of law : "(a) Whether the Tribunal was correct in holding that the assessee-company was not liable to deduct TDS under section 192 of the Act over the issue of its shares under a stock option plan to its employees at a concessional rate as it cannot be treated as a perquisite (salary) and, therefore, the assessee cannot be treated as a defaulter under section 201(1) of the Act and consequently no interest under section 201(1A) of the Act can be levied ? (b) Whether the Tribunal was correct in holding that the issue of 1,11,775 shares of the assessee-company by WERT (a trust) in favour of the employees of the assessee-company divested the assessee- company of its obligation to deduct the TDS ? (c) Whether the Tribunal was correct in holding that section 17(2)(iiia) of the Act was not clarificatory in nature and was not applicable to the current assessment year ?" 5. Learned counsel for the respondent…

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