Income Tax Appellate Tribunal - Bangalore
State Bank Of India , Bangalore vs Assistant Commissioner Of Income Tax ... on 15 June, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH : BANGALORE
BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND
SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER
Assess
Appeal No. Appellant Respondent ment
Year
M/s. State Bank of India,
Bagmane Tech Park Branch, Unit 13,
Ground Floor,
ITA No.
Bagmane Commercial Escape Mall, 2011-12
1309/Bang/2017
C.V. Raman Nagar,
Bangalore.
PAN: AAACS8577K
M/s. State Bank of India,
Centralized Clearing Processing Centre,
ITA No.
1st Floor,Vasavi Complex,
1310/Bang/2017
No. 17, St. Marks Road,Bangalore.
PAN: AAACS8577K
M/s. State Bank of India, 2012-13
HR Section Unit Branch,1st Floor,
ITA No. Kanaka's Pride,Opp. Ramakrishna The ACIT,
1311/Bang/2017 Ashram, 13/1 Bull Temple Road, Circle - 18 (2),
Basavanagudi,Bangalore - 560 004. Vs. TDS-Circle 3
PAN: AAACS8577K (1),
M/s. State Bank of India, Bangalore.
Centralized Clearing Processing Centre,
ITA No.
1st Floor,Vasavi Complex,
1312/Bang/2017
No. 17, St. Marks Road,Bangalore.
PAN: AAACS8577K
M/s. State Bank of India,
RACPC-III, BanaswadiMaruthi Mansion,
ITA No.
II 7M-422, 80 Feet Road, Kalyan Nagar, 2013-14
1313/Bang/2017
Bangalore.
PAN: AAACS8577K
M/s. State Bank of India,
Specialised Housing Finance Branch,
ITA No.
1154, 2nd Floor, 26thMain,
1314/Bang/2017
Jayanagar 4th Block, Bangalore.
PAN: AAACS8577K
Appellant by : Shri Muralidhara .H, CA
Respondent by : Shri M. Rajashekar, Addl. CIT (DR)
Date of hearing : 05.06.2018
Date of Pronouncement : 15.06.2018
ITA Nos. 1309 to 1314/Bang/2017
Page 2 of 15
ORDER
PER BENCH All these six appeals are filed by different branches of State Bank of India and these appeals are directed against six separate orders of ld. CIT(A)-13, Bangalore dated 25.04.2017 and 26.04.2017.
2. The grounds raised by the assessee for Assessment Year 2011-12 in ITA No. 1309/Bang/2017 are as under.
"1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective.
2. The learned CIT (Appeals) erred in passing an order under section 201(1) and 201(1A) raising demand of Rs.89,224/- on the basis that tax was not deducted at source on payment of Leave Travel Concession.
3. The learned CIT (Appeals) erred in not appreciating that the benefit of Leave Travel Concession is available to the Bank's employee even in cases where the journey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated.
4. The learned CIT (Appeals) erred in making the following observation, holding as under:
"I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted Tax at Source on a payment, to which the employee is not entitled for any exemption, the Assessing Officer has rightly held the assessee to be in default and raised the demand under section 201(1) and 201(1A) of the Act."
The above observations are without any basis and are contrary to the ITA Nos. 1309 to 1314/Bang/2017 Page 3 of 15 facts of the case. The appellant objects to these observations/ conclusions.
5. The CIT (Appeals) has observed in Para 8.1 of his order as follows:
"Thus, in the case of Gwalior Rayon, the bonafide of the employer was not in doubt whereas in the instant case, as reproduced in Para 6.7 above, the AO has specifically brought out how the appellant was seized of the matter that employees are purposely taking circuitous route. The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)".
The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5).
6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually visits the place as designated even in cases where the journey undertaken by an employee involves a foreign leg.
7. The learned CIT (Appeals) has not appreciated the fact that this practice has been followed for the last several years by the Appellant. The learned CIT (Appeals) has stated that principle of res judicata is not applicable to Income Tax proceedings. The CIT (Appeals) has relied on the following decisions:
(i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53
(ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377
(iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the Appellant. Hence the cases referred are not applicable.
8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the ITA Nos. 1309 to 1314/Bang/2017 Page 4 of 15 interest.
9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective.
10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B.
11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for."
3. The grounds raised by the assessee for Assessment Year 2012-13 in ITA No. 1310/Bang/2017 are as under.
"1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective.
2. The learned CIT (Appeals) erred in passing an order under section 201(1) and 201(1A) raising demand of Rs.8,34,690/- on the basis that tax was not deducted at source on payment of Leave Travel Concession.
3. The learned CIT (Appeals) erred in not appreciating that the benefit of Leave Travel Concession is available to the Bank's employee even in cases where the journey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated.
4. The learned CIT (Appeals) erred in making the following observation, holding as under:
"I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted Tax at Source on a payment, to which the employee is not entitled for any exemption, the Assessing Officer has rightly held the ITA Nos. 1309 to 1314/Bang/2017 Page 5 of 15 assessee to be in default and raised the demand under section 201(1) and 201(1A) of the Act."
The above observations are without any basis and are contrary to the facts of the case. The appellant objects to these observations/ conclusions.
5. The CIT (Appeals) has observed in Para 8.1 of his order as follows:
"Thus, in the case of Gwalior Rayon, the bonafide of the employer was not in doubt whereas in the instant case, as reproduced in Para 6.7 above, the AO has specifically brought out how the appellant was seized of the matter that employees are purposely taking circuitous route. The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)".
The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5).
6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually visits the place as designated even in cases where the journey undertaken by an employee involves a foreign leg.
7. The learned CIT (Appeals) has not appreciated the fact that this practice has been followed for the last several years by the Appellant. The learned CIT (Appeals) has stated that principle of res judicata is not applicable to Income Tax proceedings. The CIT (Appeals) has relied on the following decisions:
(i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53
(ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377
(iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the ITA Nos. 1309 to 1314/Bang/2017 Page 6 of 15 Appellant. Hence the cases referred are not applicable.
8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest.
9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective.
10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B.
11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for."
4. The grounds raised by the assessee for Assessment Year 2012-13 in ITA No. 1311/Bang/2017 are as under.
"1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective.
2. The learned CIT (Appeals) erred in passing an order under section 201(1) and 201(1A) raising demand of Rs. 13,87,443/- on the basis that tax was not deducted at source on payment of Leave Travel Concession.
3. The learned CIT (Appeals) erred in not appreciating that the benefit of Leave Travel Concession is available to the Bank's employee even in cases where the journey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated.
4. The learned CIT (Appeals) erred in making the following observation, holding as under:
"I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at ITA Nos. 1309 to 1314/Bang/2017 Page 7 of 15 Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted Tax at Source on a payment, to which the employee is not entitled for any exemption, the Assessing Officer has rightly held the assessee to be in default and raised the demand under section 201(1) and 201(1A) of the Act."
The above observations are without any basis and are contrary to the facts of the case. The appellant objects to these observations/ conclusions.
5. The CIT (Appeals) has observed in Para 8.1 of his order as follows:
"Thus, in the case of Gwalior Rayon, the bonafide of the employer was not in doubt whereas in the instant case, as reproduced in Para 6.7 above, the AO has specifically brought out how the appellant was seized of the matter that employees are purposely taking circuitous route. The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)".
The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5).
6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually visits the place as designated even in cases where the journey undertaken by an employee involves a foreign leg.
7. The learned CIT (Appeals) has not appreciated the fact that this practice has been followed for the last several years by the Appellant. The learned CIT (Appeals) has stated that principle of res judicata is not applicable to Income Tax proceedings. The CIT (Appeals) has relied on the following decisions:
(i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53
(ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377 ITA Nos. 1309 to 1314/Bang/2017 Page 8 of 15
(iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the Appellant. Hence the cases referred are not applicable.
8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest.
9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective.
10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B.
11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for."
5. The grounds raised by the assessee for Assessment Year 2013-14 in ITA No. 1312/Bang/2017 are as under.
"1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective.
2. The learned CIT (Appeals) erred in passing an order under section 201(1) and 201(1A) raising demand of Rs. 2,14,590/- on the basis that tax was not deducted at source on payment of Leave Travel Concession.
3. The learned CIT (Appeals) erred in not appreciating that the benefit of Leave Travel Concession is available to the Bank's employee even in cases where the journey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated.
4. The learned CIT (Appeals) erred in making the following observation, holding as under:
"I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, ITA Nos. 1309 to 1314/Bang/2017 Page 9 of 15 complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted Tax at Source on a payment, to which the employee is not entitled for any exemption, the Assessing Officer has rightly held the assessee to be in default and raised the demand under section 201(1) and 201(1A) of the Act."
The above observations are without any basis and are contrary to the facts of the case. The appellant objects to these observations/ conclusions.
5. The CIT (Appeals) has observed in Para 8.1 of his order as follows:
"Thus, in the case of Gwalior Rayon, the bonafide of the employer was not in doubt whereas in the instant case, as reproduced in Para 6.7 above, the AO has specifically brought out how the appellant was seized of the matter that employees are purposely taking circuitous route. The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)".
The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5).
6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually visits the place as designated even in cases where the journey undertaken by an employee involves a foreign leg.
7. The learned CIT (Appeals) has not appreciated the fact that this practice has been followed for the last several years by the Appellant. The learned CIT (Appeals) has stated that principle of res judicata is not applicable to Income Tax proceedings. The CIT (Appeals) has relied on the following decisions:
ITA Nos. 1309 to 1314/Bang/2017 Page 10 of 15
(i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53
(ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377
(iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the Appellant. Hence the cases referred are not applicable.
8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest.
9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective.
10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B.
11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for."
6. The grounds raised by the assessee for Assessment Year 2013-14 in ITA No. 1313/Bang/2017 are as under.
"1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective.
2. The learned CIT (Appeals) erred in passing an order under section 201(1) and 201(1A) raising demand of Rs. 67,414/- on the basis that tax was not deducted at source on payment of Leave Travel Concession.
3. The learned CIT (Appeals) erred in not appreciating that the benefit of Leave Travel Concession is available to the Bank's employee even in cases where the journey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated.
4. The learned CIT (Appeals) erred in making the following observation, holding as under:
"I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the ITA Nos. 1309 to 1314/Bang/2017 Page 11 of 15 assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted Tax at Source on a payment, to which the employee is not entitled for any exemption, the Assessing Officer has rightly held the assessee to be in default and raised the demand under section 201(1) and 201(1A) of the Act."
The above observations are without any basis and are contrary to the facts of the case. The appellant objects to these observations/ conclusions.
5. The CIT (Appeals) has observed in Para 8.1 of his order as follows:
"Thus, in the case of Gwalior Rayon, the bonafide of the employer was not in doubt whereas in the instant case, as reproduced in Para 6.7 above, the AO has specifically brought out how the appellant was seized of the matter that employees are purposely taking circuitous route. The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)".
The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5).
6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually visits the place as designated even in cases where the journey undertaken by an employee involves a foreign leg.
7. The learned CIT (Appeals) has not appreciated the fact that this ITA Nos. 1309 to 1314/Bang/2017 Page 12 of 15 practice has been followed for the last several years by the Appellant. The learned CIT (Appeals) has stated that principle of res judicata is not applicable to Income Tax proceedings. The CIT (Appeals) has relied on the following decisions:
(i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53
(ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377
(iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the Appellant. Hence the cases referred are not applicable.
8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest.
9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective.
10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B.
11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for."
7. The grounds raised by the assessee for Assessment Year 2013-14 in ITA No. 1314/Bang/2017 are as under.
"1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective.
2. The learned CIT (Appeals) erred in passing an order under section 201(1) and 201(1A) raising demand of Rs. 1,31,727/- on the basis that tax was not deducted at source on payment of Leave Travel Concession.
3. The learned CIT (Appeals) erred in not appreciating that the benefit of Leave Travel Concession is available to the Bank's employee even in cases where the journey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated.
4. The learned CIT (Appeals) erred in making the following observation, holding as under:
ITA Nos. 1309 to 1314/Bang/2017 Page 13 of 15 "I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted Tax at Source on a payment, to which the employee is not entitled for any exemption, the Assessing Officer has rightly held the assessee to be in default and raised the demand under section 201(1) and 201(1A) of the Act."
The above observations are without any basis and are contrary to the facts of the case. The appellant objects to these observations/ conclusions.
5. The CIT (Appeals) has observed in Para 8.1 of his order as follows:
"Thus, in the case of Gwalior Rayon, the bonafide of the employer was not in doubt whereas in the instant case, as reproduced in Para 6.7 above, the AO has specifically brought out how the appellant was seized of the matter that employees are purposely taking circuitous route. The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)".
The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5).
6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually ITA Nos. 1309 to 1314/Bang/2017 Page 14 of 15 visits the place as designated even in cases where the journey undertaken by an employee involves a foreign leg.
7. The learned CIT (Appeals) has not appreciated the fact that this practice has been followed for the last several years by the Appellant. The learned CIT (Appeals) has stated that principle of res judicata is not applicable to Income Tax proceedings. The CIT (Appeals) has relied on the following decisions:
(i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53
(ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377
(iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the Appellant. Hence the cases referred are not applicable.
8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest.
9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective.
10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B.
11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for."
8. At the very outset, it was fairly conceded by ld. AR of assessee that the issue involved in these appeals is squarely covered against the assessee and in favour of the revenue by Tribunal order rendered in the case of some other branches of State Bank of India. He submitted a copy of this Tribunal order. The ld. DR of revenue supported the order of CIT(A).
9. We have considered the rival submissions and since the issue involved is admittedly covered against the assessee by the Tribunal order in the case of various branches of State Bank of India, we decline to interfere in the order of CIT(A) in all these cases.
ITA Nos. 1309 to 1314/Bang/2017 Page 15 of 15
10. In the result, all these six appeals filed by the assessee are dismissed. Order pronounced in the open court on the date mentioned on the caption page.
Sd/- Sd/-
(N.V. VASUDEVAN) (ARUN KUMAR GARODIA)
Judicial Member Accountant Member
Bangalore,
Dated, the 15th June, 2018.
/MS/
Copy to:
1. Appellant 4. CIT(A)
2. Respondent 5. DR, ITAT, Bangalore
3. CIT 6. Guard file
By order
Senior Private Secretary,
Income Tax Appellate Tribunal,
Bangalore.