Section 192 deals with the deduction of tax at source. It is computed on the estimated income of the assessee under the head salary and the liability is at the time of payment of salary, if there is a perquisite, there is responsibility to deduct tax of the employer under section 192(1), 192(1A) and 192(1B). Perquisite is actually not a payment of salary but a benefit not in terms of money. There was no provision initially to deduct tax at source. It is provided by section 192(1B) by the Finance Act, 2002 with effect from 1-6-2002 and as to computation of income of perquisite, the provision in section 192(1A), also by the same Act with effect from the same date. This tax, at the option of the assessee, can be paid on the whole or part of such income without making any deduction there from at the time when it was otherwise deductible under section 192. A duty is also cast upon the person deducting tax under section 200. Rule 3 of Income-tax Rules, 1962 provides for the time and mode of payment to the Government account of tax deducted at source. As per the provisions of section 200, the tax deducted at source is a mode of payment of tax on the income of the person on whose income it is deducted i.e. employees in this case.
The issue raised by the assessee is squarely covered by the decision of the Bombay High Court in the case of Western Coal Field [IT Appeal Nos. 93 to 108 of 2008, dated 1-10-2010].