05 October 2013
in light of the Sudhir Kr Sharma judgment it has been argued that stipend is not taxable. Being ITAT judgment it may or not be accepted by other benches or higher judicial courts.
Further burden to prove that stipend was given to cover costs of education shall be on the articled clerk.
Further reason for Big 4 firms to deduct taxes under 194J or 192B (EY deducts under 192B) is based on their interpretation of articled clerk's relationship with principal. Rather your case of claiming exemption under 10(16) would weaken further if the principal takes a stand in favor of 194J or 192B.
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