Tribunal allows appeals post-Supreme Court ruling, emphasizing compliance with higher judicial decisions.

The Tribunal allowed the appeals for statistical purposes, restoring the matters to the Assessing Officer for further consideration after the Supreme Court's judgment in Special Leave Appeal No. 9876/2020. The issues related to LTC reimbursement and TDS liability were deemed to require alignment with the Supreme Court's decision, emphasizing compliance with higher judicial rulings in tax matters.

---

---

Issues:
1. Appeal against order of CIT (Appeals) for Assessment Year 2016-17 & 2017-18 regarding exemption u/s 10(5) for Leave Travel Concession (LTC) involving foreign leg.
2. Charging/confirming interest u/s 201(1A) by AO and CIT (Appeals).
3. Restoration of issues to the Assessing Officer (AO) pending disposal of Special Leave Appeal No. 9876/2020 by the Hon'ble Supreme Court.

Issue 1: Appeal against order of CIT (Appeals) for Assessment Year 2016-17 & 2017-18 regarding exemption u/s 10(5) for Leave Travel Concession (LTC) involving foreign leg:
The appeals were filed by the assessee against the CIT (Appeals) order for Assessment Year 2016-17 & 2017-18. The grounds of appeal challenged the denial of exemption u/s 10(5) for reimbursement of Leave Travel Concession involving foreign legs. The contention was that as long as the employee's designated place is in India for LTC and they actually visit the place, the exemption should apply. The AO and CIT (Appeals) were criticized for raising/confirming demands without proper appreciation of the facts and law. The AO determined the expenditure reimbursed for the foreign component separately, leading to tax deductions and interest u/s 201(1A).

Issue 2: Charging/confirming interest u/s 201(1A) by AO and CIT (Appeals):
The AO and CIT (Appeals) were accused of charging/confirming interest u/s 201(1A) in both cases. The demands were upheld, and interest amounts were included in the total demands. The appeals contested the legality of these charges, claiming they were contrary to the provisions of the law and lacked proper consideration of the case's circumstances.

Issue 3: Restoration of issues to the Assessing Officer (AO) pending disposal of Special Leave Appeal No. 9876/2020 by the Hon'ble Supreme Court:
The Tribunal decided to restore the issues to the AO for both assessment years pending the disposal of Special Leave Appeal No. 9876/2020 by the Hon'ble Supreme Court. The issues revolved around the liability for TDS on LTC reimbursement under Section 10(5) and Rule 2B of the Act. The Tribunal considered the similarity of the issue with that of Assessment Year 2013-14, which was under the Supreme Court's consideration. The decision to restore the issues to the AO was made to align with the outcome of the Supreme Court's judgment in the related case, emphasizing the need for compliance with the Supreme Court's decision.

In conclusion, the Tribunal allowed the appeals for statistical purposes, restoring the matters to the AO for further consideration after the Hon'ble Supreme Court's judgment in Special Leave Appeal No. 9876/2020. The issues related to LTC reimbursement and TDS liability were deemed to require alignment with the Supreme Court's decision, highlighting the importance of compliance with higher judicial rulings in tax matters.

---