Infosys not an IT defaulter, rules K'taka HC

Bangalore, Dec 15 (UNI) The Karnataka High Court today held that IT bellwether Infosys Technologies Ltd could not be treated as an income tax defaulter as it was not liable for tax deduction at Source according to the provisions of the IT Act for allotting shares under the Stock Option Plan to its employees at a concessional rate as it was not a perquisite.

A Division Bench, comprising Mr Justice R Gururajan and Mr Justice N Anand, made the observation and said consequently no interest could be levied on the company.

The Bench was deciding two questions of law raised by the IT Department in an appeal, challenging the order of the Income Tax Apellate Tribunal in allowing the assessee company's plea over the department's demand that the company pay tax of about 75,51,66,170 with interest from 1997 to 2000 on grant of shares to its employees.

The court observed that sharing of wealth of an employer with the employees by way of stock option was recognised, respected and acted upon. Such option was a way of participation and had to be encouraged. The department should approve such welfare participatory pro-labour activities of an employer. The Bench expressed hope that other employers would follow suit so that economic and social justice would be extended to the weaker sections of the society.

UNI XR GD SBA GC1920