2019 (10) TMI 1570 - AT - Income Tax

TDS credit deposited by Employer-State Bank of India on payment of leave travel concession - HELD THAT - Since the employer has paid the TDS therefore no doubt the credit is liable to be given to the assessee in accordance with law. Accordingly we allowed the claim of the assessee and direct the AO to give the credit to the assessee of the TDS amount - Accordingly this issue is decided in favour of the assessee against the revenue. Disallowance of interest upon the TDS - The copy of order also speaks this fact that the employer was in the default for deducting the TDS on the LTC of the Assessee therefore the interest u/s 201 201(IA) of the Act was charged from the employer - HELD THAT - Since the interest has been charged from employer therefore no interest is not liable to be charged against the assessee. In this regard we also find support of law settled in the case of Ian Morris 2016 (12) TMI 1090 - SUPREME COURT - Accordingly the interest is not liable to be charged from the assessee and this issue is also decided in favour assessee against the revenue.

Summary

Issues involved:
1. Addition of Leave Travel Concession by not allowing exemption under section 10(5) of the Act.
2. Disallowance of TDS credit deposited by the employer.
3. Levying interest under sections 234B & 234C of the Act.

Detailed Analysis:
Issue 1:
The assessee appealed against the addition of Leave Travel Concession of Rs.2,10,518/- by the Assessing Officer, claiming exemption under section 10(5) of the Act. The Tribunal found that the assessee had undertaken a journey via foreign countries, which did not qualify for exemption under Section 10(5) as it only applied to journeys within India. The claim of the assessee was declined, and the amount was added to the income. The CIT(A) upheld this decision, leading to the appeal before the Tribunal.

Issue 2:
Regarding the disallowance of TDS credit deposited by the employer, the Tribunal observed that the employer, State Bank of India, had deducted TDS and paid it along with interest totaling Rs.92,530/-. As the employer had paid the TDS, the Tribunal directed the Assessing Officer to give credit to the assessee for the TDS amount of Rs.2,07,970/-. The Tribunal decided this issue in favor of the assessee against the revenue.

Additional Ground:
The assessee raised an additional ground challenging the disallowance of interest under sections 234B & 234C of the Act. The Tribunal noted that the employer was in default for not deducting TDS on the Leave Travel Concession of the assessee, resulting in interest being charged under sections 201 & 201(IA) of the Act from the employer. Citing legal precedent, the Tribunal ruled that since interest had been charged from the employer, no interest could be levied against the assessee. Consequently, this issue was also decided in favor of the assessee against the revenue.

In conclusion, the Tribunal partially allowed the appeal filed by the assessee, directing the Assessing Officer to give credit for the TDS amount and ruling out the levy of interest on the assessee. The delay in filing the appeal was condoned based on the reasonable explanation provided by the assessee.