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TMI Blog2021 (10) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned demands raised under section 201 r.w.s 192 ceases to hold good in law. We must, therefore, vacate these demands. Bearing in mind entirety of the case, we cancel the impugned demands under section 201 r.w.s. 192 as unsustainable in law. - Decided in favour of assessee. - ITA No. 1526/MUM/2019 And ITA No. 1527/MUM/2019 - - - Dated:- 12-10-2021 - Shri Saktijit Dey, Judicial Member And Shri M. Balaganesh, Accountant Member For the Assessee : Shri Nitesh Joshi (AR) For the Revenue : Shri T.S. Khalsa (DR) ORDER PER SAKTIJIT DEY, JM Captioned appeals by the same assessee arise out of two separate orders, both dated 10.12.2018, of learned Commissioner of Income Tax (Appeals)-60, Mumbai upholding the orders passed by the Assessing Officer under section 201(1) and 201(1A) of the Income Tax Act, 1961 in the matter of withholding of tax for the assessment years 2010-11 and 2011-12. 2. The common ground raised by the assessee in both the appeals read as under:- 1. Order under section 201(1) and 201(1A) barred by limitation 1.1. The learned CIT(A) erred in not holding that the order under section 201(1) and 201(1A) is barred by limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an employee involves a foreign leg, but where the employee's designated place is in India and he actually visits the place as designated. 2.1.3 The learned CIT(A) erred in relying on the Circular No. 8/2012 [F.No. 275/192/2012 1T(B)] dated 5 October 2012 issued by the Central Board of Direct Taxes for the purpose of tax deduction on salary payments for financial year 2012-13 for the captioned assessment year. 2.1.4. The learned CIT(A) erred in not appreciating that the appellant provided exemption under section 10(5) only when the employee‟s designated place is in India and he actually visit the place as designated. Further, even in cases where the employee travels outside India during the course of his travel to a place in India, the exemption under section 10(5) is restricted for travel within India. Further, all conditions under section 10(5) and Rule 2B are satisfied. 2.1.5. The learned CIT(A) erred in not appreciating that if at all the LFC payments involving a foreign leg are to be held as taxable, the employee is entitled for exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing demands. Assessment year : 2010-11 ₹ 1,37,16,521/- Assessment year: 2011-12 ₹ 1,71,29,855/- 4. Against the aforesaid orders passed under section 201(1)/201(1A) of the Act, assessee preferred appeals before learned Commissioner (Appeals). However, by the impugned orders learned Commissioner (Appeals), by and large, has upheld the decision of the AO. Of course, learned Commissioner (Appeals) has granted partial relief to the assessee to the extent of reducing the demand raised by the AO by reducing an amount of ₹ 27,06,133/- in assessment year 2010-11. 5. Before us, learned Counsel for the assessee submitted, the issue is squarely covered by the orders of the Tribunal in assessee s own case in assessment years 2008-09 and 2012-13. In this regard, he drew our attention to the relevant observations of the Tribunal. Further, he relied upon the following decision: 1. CIT v. Onkarmal Meghraj (HUF) (1974) 93 ITR 233 (Supreme Court) 2. Oracle India Pvt. Ltd. v. DCIT (2016) 72 taxmann.com 138 (Supreme Court) 3. Oracle India Pvt. Ltd. v. DCIT(2015) 376 ITR 411 (Delhi High Court) 4. Oracle India Pvt. Ltd. v. DCIT (Writ Petition (C) No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of taxable income the hands of an assessee under this head . Clearly, therefore, taxability of an income, in the hands of the employee concerned, under the head' income from salaries‟ per se is thus not sufficient to invoke the tax withholding obligations of the employer. There can be situations in which the employer genuinely and reasonably estimates income of the employees under the head salaries, and yet actual taxability of income under the head salaries of the related employees may be higher than employer's estimation. Therefore, while examining the question as to whether the employer has properly discharged his duties under section 192, all that is to be seen is whether the employer has reasonably, or bonafide, estimated the income of the employees and deducted tax in respect of such estimated income. As long as the conduct of the employer in this exercise is bonafide, he cannnot be said to be wanting in his conduct under section 192. Explaining this legal position, in the oft-quoted landmark judgment in the case of CIT v. Gwalior Rayon Silk Mills Ltd. [(1983) 140 ITR 832 (MP)], Hon'ble Madhya Pradesh High Court Judgment has, inter alia, observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant for the present discussion) Conditions for the purpose of section 10(5) as prescribed under rule 2 B of the Income-tax Rules, 1962 2B. (1) The amount exempted under clause (5) of section 10 in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding- (a) on leave to any place in India; (b) to any place in India after retirement from service or after the termination of his service, shall be the amount actually incurred on the performance of such travel subject to the following conditions, namely: (i) where the journey is performed on or after the Ist day of October, 1997, by air, an amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination; (ii) where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of October, 1997, by any mode of transport other than by air, an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al status of taxation; the relevant question is whether the assessee employer could be said to unreasonable or malafide in proceeding on the basis that in such a situation also, the cost of a direct flight between Mumbai Delhi on national airlines will be available for exemption under section 10(5). When we look at the detailed statement of facts, extracts from which have been extensively reproduced by us earlier in this order, we do not find anything wrong or unreasonable in the conduct of the assessee employer. There is no specific bar in the - Jaw f the travel, eligible for exemption under section 10(5), involving a sector of as travel, and, in the absence of such a bar, the assessee employer cannot be faulted for not inferring such a bar. The reimbursement is restricted to airfare, on the national carrier, by the shortest route as is the mandate of rule 2B. The employee has actually travelled, as a part of that composite itinerary involving a foreign sector as well, to the destination in India. The guidance available to the assessee employer indicates that, in such a situation, the exemption under section 10(5) is available to the employee though to the extent of farthest India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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