9911796707
TMI Blog2024 (2) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to section 201(1) of the I.T. Act on production of Form 26A before the A.O as per law after giving categorical finding in para 4.13 of the appellate order that the benefit of proviso to section 201(1) of the I.T. Act is not available to the assessee particularly when the deductor assessee had never filed Form-26A of any Deductee/employee either before the Assessing Officer or even before the CIT(A)? 3. Whether on the facts and in the circumstances of the case and in law, the CIT(A) was justified in giving indirect contradictory finding that the Deductor assessee may not be treated as assessee in default in respect of those Deductee/employees who have filed their Income Tax Return particularly when offering of 'such receipt' as income in the Income Tax Return of the Deductees/employees have not been made a precondition to that? 4. Whether on the facts and in the circumstances of the case and in law, the CIT(A) was justified in not confirming the order of the Assessing Officer in entirely wherein the Assessing Officer has treated the assessee as an assessee in default u/s 201(1) in respect of the amount of tax which has not been deducted from 'such payments' and levying inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nct from the liability of a deductee to pay tax on such income. The onus cannot shift to the deductee. Moreover, it is not a case where the deductees have included the receipts under reference in their income and have declared the same in their Income Tax Return after paying tax on the same. Hence, benefit of proviso to section 201 is not available to the appellant. Accordingly, the argument put forth by the AR of the appellant that it amounts to double recovery of tax, is not acceptable. However, in cases where the deductees/employees of the bank have voluntarily included such LTC amounts in their Income Tax Return and considered the same in computation of their taxable income, the appellant may claim the benefit of proviso to section 201 on production of Form 26A before the AO as per law. The AO is directed to give an opportunity to the appellant to produce the same". 5. On careful perusal of the order of the learned Commissioner of Income-Tax(Appeals), we do not see any infirmity in the observations of the learned CIT(Appeals). Grounds raised by the Revenue are rejected. ITA No.2316/Del/2022 Assessment Year : 2013-14 ITA No.2317/Del/2022 Assessment Year : 2016-17 ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually visits the place as designated. 3. That without prejudice to ground nos. 1 and 2 above and on the facts and circumstanced of the case and provisions of the law, the Ld. A.O as well as Ld CIT(A) erred in treating the bank as "assessee in default" 4. That consequential to our Ground nos. 1, 2 & 3 above, the ld.AO and Ld. CIT(A) erred in charging/confirming interest u/s 201(1A) of Rs. 50,119/- 5. That the appellants request be allowed to add, modify and delete any other ground(s) of appeal. Grounds in ITA No.2318/Del/2022: Sr. No. Grounds of Appeal Tax effect relating to each Ground of appeal 1. That on the facts and circumstances of the case and provisions of the law, the order dated 27/03/2018 passed by the Ld. A.O and confirmed by Ld. CIT(A), ignoring the stay granted by Hon'ble High Court of Madras, is bad in law and need to be quashed. Rs. 3,85,428/- 2. That without prejudice to ground no.1 above and on the facts and circumstances of the case and provisions of the law, the Ld. A.O as well as Ld. CIT(A) erred in raising/confirming the demand of Rs. 4,58,483- (including interest of Rs. 73,055/-) by denying the exemption u/s 10(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravel from a designated place within India to another designated place in India and thus it was in violation of the statutory provisions and hence the payment made to its employees by the Bank could not be exempted, and the Bank ought to have deducted Tax at source, while making this payment. To give an example of one of the employees of the appellant who availed LTC taking a circuitous route of Delhi-Madurai-Columbo-Kuala Lampur-Singapore-Columbo-Delhi and his claim was fully reimbursed by the appellant and no tax was deducted under Section 192(1) for the same. 4. The appellant on the other hand through its counsel senior advocate Shri K.V. Vishwanathan, would argue that though the travel made by its employees under LTC did involve a foreign leg and admittedly a circuitous route as opposed to the shortest route was taken, yet two things go in the favour of the employees. Firstly, the employees of the appellant did travel from one designated place in India to another place within India (though in their travel itinerary a foreign country was also involved), and secondly the payments which were actually made to these employees was for the shortest route of their travel between two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed Provided further that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax. 8. Section 10(5) which exempts payments received as LTC with which we are presently concerned. It reads as under:- "10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- XXXXXXXXX (5) in the case of an individual, the value of any travel concession or assistance received by, or due to him,- (a) from his employer for himself and his family, in connection with his proceeding on leave to any place in India; (b) from his employer or former employer for himself and his family, in connection with his proceeding to any place in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (B) where no recognised public transport system exists, an amount equivalent to the air-conditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.]" 10. The appellant before us is a Public Sector Bank, namely, State Bank of India (SBI). The Revenue has held the appellant to be an "assessee in default", for not deducting the tax at source of its employees. 11. These proceedings started with a Spot Verification under Section 133A when it was discerned by the Revenue that some of the employees of the assessee-employer had claimed LTC even for their travel to places outside India. These employees, even though, raised a claim of their travel expenses between two points within India but between the two points they had also travelled to a foreign country as well, thus taking a circuitous route for their destination which involved a foreign place. The matter was hence examined by the Assessing Officer who was of the opinion that the amount of money received by an employee as LTC is exempted under Section 10(5) of the Act, however, this exemption cannot be claimed by an employee for travel outside Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... room. 17. The contention of the Appellant that there is no specific bar under Section 10(5) for a foreign travel and therefore a foreign journey can be availed as long as the starting and destination points remain within India is also without merits. LTC is for travel within India, from one place in India to another place in India. There should be no ambiguity on this. 18. The second argument urged by the appellant that payments made to these employees was of the shortest route of their actual travel cannot be accepted either. It has already been clarified above, that in view of the provisions of the Act, the moment employees undertake travel with a foreign leg, it is not a travel within India and hence not covered under the provisions of Section 10(5) of the Act. 19. A foreign travel also frustrates the basic purpose of LTC. The basic objective of the LTC scheme was to familiarise a civil servant or a Government employee to gain some perspective of Indian culture by traveling in this vast country. It is for this reason that the 6th Pay Commission rejected the demand of paying cash compensation in lieu of LTC and also rejected the demand of foreign travel. In para 4.3.4 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi High Court. The appeal is dismissed." 12. In the course of hearing, learned counsel appearing for the assessee submitted that Hon'ble Madras High Court has granted interim stay to All India |State Bank Officers Federation holding that any amount paid to petitioners ( State Bank Officers ) towards LTC or reimbursement of LTC would not amount to income so as to enable the bank to deduct tax at source. Learned counsel, therefore, submits that in view of the interim stay order of the Hon'ble Madras High Court, the bank is not liable for TDS. 13. We have perused the order of the Hon'ble Madras High Court in MP No.2 of 2014 in WP No.1199/2014 dated 16.02.2015 and observed that a writ petition was filed challenging the circular issued by the SBI to the effect that officers/employees would not be entitled to visit Overseas Countries/Centers as part of LTC /HTC. In the interim order passed by the Hon'ble Madras High Court, it has been held that any amount paid to the petitioner towards LTC/reimbursement of LTC pursuant to the impugned order would not amount to income so as to enable the bank to deduct tax at source. We further observed that the Hon'ble Madras High ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
