AI Drafter 
TaxTMI 
TaxTMI 
2019 (1) TMI 637
X X X X Extracts X X X X
X X X X Extracts X X X X
.... LTC benefit under section 10(5) due to foreign destination is involved in LFC Payment made by Bank of his Officers i.e, the places of travel are not situated in India, it cannot be termed as the shortest route to the destination in India, and the National carrier is not involved/used for purposes of the air travel. The ITO(TDS), Kota passed an order dated 12.01.2015 under section 201(1) read with section 201(1A) of Rs. 369393/- for deposit as Assessee on default and treating the LTC payments made to employees of corporate office during financial year 2012-13 as taxable and has treated the assessee bank as an assessee in default for purpose of section 201 and also charge intt U/s 201(1A) which was not justify, under the facts & circumstance....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cting the TDS on the reimbursement to the extent of journey performed by these five officers outside of India. Accordingly, an order under Section 201(1)/201(IA) was passed determining the tax and interest liability of Rs. 369393/-. 3. On appeal by the assessee bank, the ld. CIT(A) relying on the decision of the Coordinate Bench in case of SBI vs. ACIT(TDS) 81 taxman.com 192 held that the ITO(TDS) has rightly held the assessee bank to be in default in so far as short deduction of tax U/s 201 and interest U/s 201(1A) of the Act upto the extent of reimbursement made to its Officers for foreign travel leg of LTC claim. 4. The ld AR was heard who has submitted that the assessee bank was under a bonafide belief that no TDS is required to b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct as under:- In computing the total income of a previous year of any person, 10. any income falling within any of the following clauses shall not be included- [(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 India after retirement from service or after the termination of his service, subject to such conditions as may be prescribed (including conditions as to number of journeys and the amount which shall be ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s made to the interim order of the Hon'ble Madras High Court dated 16.2.2015. Through the interim order, the Hon'ble Madras High Court has permitted the bankers not to deduct TDS on or after 16.2.2015 on the amount paid/reimbursed to the employees of the bank in respect of LTC/HTC availed where the employee has visited a foreign city/country, irrespective of the fact whether the LFC bills were submitted and paid prior to 16.2.2015; meaning thereby this Circular was passed consequent to the interim order of the Hon'ble Madras High Court. But in the present case, the journey was undertaken in the year 2012 and the bills were settled during that year; meaning thereby at the relevant point of time when the bills were settled, there ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her under Rule 2B of the Income Tax Rules the condition for allowing exemption under section 10(5) of the Act are laid down. The conditions are in respect of various modes of transport. However, the basic condition is that the employee is to utilize the travel concession in connection with his proceeding to leave to any place within India, either during the course of employment or even after retirement of service or after termination of service. Reading of section 10(5) of the Act and Rule 2B of the Rules in conjunction lays down the guidelines for claiming exemption in relations to the travel concession received by an employee from his employer or former employer, for proceeding on leave to any place in India. The person is to undertake th....