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2015 (2) TMI 1378 - HC - Indian LawsEntitlement to officers/employees to visit overseas countries/centres as part of LTC/HTC - validity of circular issued by the State Bank of India - reimbursement of LTC - HELD THAT - There is no dispute that the Bank would be paying LTC amount to the concerned officers pursuant to the interim order granted by this Court. Interim Order is subject to the result of the writ petition. The learned counsel for the petitioner is correct in his contention that the there is no taxable income for deduction at source. The interim order granted by this Court is explained to the effect that any amount paid to the petitioner towards LTC or re-imbursement of LTC pursuant to the impugned order would not amount to income so as to enable the Bank to deduct tax at source. It is made clear that if the writ petition is dismissed, the employees are liable to pay tax on the amount paid by Bank. Post the writ petition for final disposal on 15.06.2015. The interim order already granted with this modification would continue till the disposal of the writ petition.
Issues:
Challenge to circular by State Bank of India regarding officers/employees' entitlement to visit overseas countries/centres as part of LTC/HTC. Tax deduction by Bank treating LTC amount as income. Analysis: The writ petition challenges a circular issued by the State Bank of India, which stated that officers/employees would not be entitled to visit overseas countries/centres as part of LTC/HTC. The petitioners argued that this circular contradicted the Leave Travel/Home Travel Concession Rules, specifically Paragraph 17.18, which entitles members of the petitioners Union to LTC for travel abroad. An interim stay was granted on the circular by the Court on 25.04.2014. The petitioners filed an affidavit stating that if the interim stay was granted and the writ petition was later dismissed, the amount paid towards LTC for foreign travel would be refunded by the individual officers concerned. Regarding the tax deduction issue, it was noted that the Bank was deducting tax at source, treating the LTC amount as income. The Corporate Office of the Bank had instructed branches to deal with the Income Tax Department. However, the Court clarified that the amount paid as LTC pursuant to the interim orders should not be considered as taxable income for deduction at source. The interim order specified that if the writ petition was dismissed, the employees would be liable to pay tax on the amount paid by the Bank. The Court set the writ petition for final disposal on 15.06.2015, with the interim order remaining in effect until then. In conclusion, the Court granted an interim stay on the circular issued by the State Bank of India regarding officers/employees' entitlement to visit overseas countries/centres as part of LTC/HTC. Additionally, the Court clarified that the LTC amount paid pursuant to interim orders should not be treated as taxable income for tax deduction at source by the Bank.
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