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TMI Blog2019 (11) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of the assessee has been rejected by the revenue authorities would not make the assessee liable for penalty. - Decided in favour of assessee. - 1118 to 1122/Bang/2019, 1168 to 1172/Bang/2019, 1237 & 1238/Bang/2019 - - - Dated:- 18-11-2019 - Shri B.R. Baskaran, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Assessees : S/Shri Raghavendra Chakravarthy H.Muralidhar, CA For the Respondent : Shri M.Vijay Kumar, Add.CIT(DR) ORDER PER BENCH: The assessee-bank filed appeals for different branches against orders of the CIT(A), Bengaluru-6, Bengaluru, passed u/s 271C and 250 of the Income-tax Act,1961 ['the Act' for short]. Since all these appeals have a common and identical issue. Hence, are clubbed and heard together and common consolidated order is passed. For the sake of convenience, we shall take up the assessee s appeal in ITA No.1237/Bang/2018 and the facts narrated therein. 2. Brief facts of the case are that the assessee-bank branch is a nationalized bank and has filed TDS returns u/s 206 of the Act read with rule 37 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng penalty and considering the fact that TDS is not deducted on payments and the reasonable cause was not explained. AO levied penalty of ₹ 31,085/- and passed order u/s 271C of the Act dated 27/11/2017. 3. Aggrieved by the penalty order, assessee filed appeal with the CIT(A). The CIT(A) having considered grounds of appeal, submissions and judicial decisions has concurred with the findings of the AO and confirmed penalty and dismissed the assessee s appeal. 4. Aggrieved by the order of the CIT(A), the assessee has filed appeal before the Tribunal. At the time of hearing, ld. AR argued that the CIT(A) has erred in confirming penalty levied by the AO without considering the Reasonable cause and the facts that the assessee has accepted the demand raised in proceedings u/s 201 of the Act and has paid. Ld. AR further submitted that the assessee has prima facie good case on Reasonable Cause and was on bona fide belief that no TDS to be deducted. Ld. AR further submitted that the payments are supported with evidence and relied on judicial decisions and prayed for deleting the penalty. Contra, learned DR supported the order of the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al employee. There is no circular of Central Board of Direct Taxes (CBDT) requiring the employer under section 192 to collect and examine the supporting evidence to the declaration to be submitted by an employee(s). Therefore, it was held that an assessee-employer is under no statutory obligation under the Income-tax Act, 1961, and/or the Rules to collect evidence to show that its employee(s) had actually utilized the amount(s) paid towards leave travel concession(s)/conveyance allowance. 11. We thus find that there is nothing specific which has been provided by CBDT in its circular issued under section 192 for the relevant financial year. What has been reiterated is adherence to the provisions as contained in section 10(5) read with Rule 2B. Similarly, the Hon'ble Supreme Court has also held that an assessee employer is under no statutory obligation under the Income-tax Act, 1961, and/or the Rules to collect evidence to show that its employees had actually utilized the amount paid towards leave travel concession. Even though the same is not required as per decision referred supra, in the instant case, the assessee bank has been diligent, and has collected an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries as part of their travel itinerary but at the same time, there is an error of judgment on part of the assessee bank in understanding and applying the provisions of section 10(5) of the Act. Therefore, we are unable to accept the Revenue's contention that the assessee bank has not deducted the tax intentionally, fully knowing that the LFC is applicable for travel in India only and no foreign travel is allowable as it is a case of error of judgment and no malafide can be assumed on part of the bank. Further, nothing has been brought on record which in any ways suggest connivance on part of the assessee bank or forged claims submitted by the employees and which has been discovered by the Revenue during the course of its examination. As fairly submitted by the assessee bank, while calculating the estimated tax liability of its employees, it always consider LFC claim as exempt under section 10(5)and the same position, being followed and accepted consistently in the past years, was followed in the current financial year as well. However, for the first time, after the survey by the tax department, this issue arose for consideration and after the judgment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of substantial questions of law by the High Court lends credence to the bona fides of the assessee in claiming deduction. Once it turns out that the claim of the assessee could have been considered for deduction as per a person properly instructed in law and is not completely debarred at all, the mere fact of confirmation of disallowance would not per se lead to the imposition of penalty. 8. The assessee in the present case had disclosed all the materials on which it was claiming deduction. The matter as to whether the deduction was to be given or not, was taken up by the revenue authorities and it was held that certain deductions claimed by the assessee were to be disallowed. It is not disputed that the questions regarding the disallowance of the deductions claimed by the assessee is under consideration by the High Court, as the appeal filed by the assessee has been admitted, on the substantial questions of law which have been reproduced hereinabove. 9. The mere admission of the appeal by the High Court on the substantial questions of law as have been quoted above, would make it apparent that the additions made were debatable. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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