TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 1163
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....u/s 271C (1) of the Incometax Act, 1961. 3. The learned Commissioner of Income (Appeals) erred in confirming levy of penalty without appreciating the fact that as per Section 273B, if there is any reasonable cause, no penalty can be levied. 3.1. The learned Commissioner of Income Tax (Appeals) erred in levying penalty without appreciating the fact that there was a reasonable cause for the Appellant bank in not deducting the TDS. 3.2. The learned Commissioner of Income Tax (Appeals) failed to appreciate that appellant was under the bonafide belief that even where the journey undertaken by an employee involves a foreign leg, the employee is entitled to exemption under Section 10(5) when the employee's designated place is in India. 3.3. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the appellant had honestly and fairly formed an opinion and arrived at the estimated income of the employees. 3.4. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the appellant was not required go beyond the declarations given by employees and ascertain the LFC amount exempted. 3.5. The learned Commissioner of Income Tax (Ap....
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....e decision of the Tribunal applicable to the facts of the case. For all these and other grounds, which may be urged at the time of hearing, the appellant prays that its appeal be allowed." 4. The grounds raised by the assessee for Assessment Year 2012-13 in ITA No. 534/Bang/2019 are as under. "1. The order of the learned Commissioner of Income Tax (Appeals) is bad in law and against the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) erred in upholding levy of the penalty of Rs. 39,830/- u/s 271C (1) of the Incometax Act, 1961. 3. The learned Commissioner of Income (Appeals) erred in confirming levy of penalty without appreciating the fact that as per Section 273B, if there is any reasonable cause, no penalty can be levied. 3.1. The learned Commissioner of Income Tax (Appeals) erred in levying penalty without appreciating the fact that there was a reasonable cause for the Appellant bank in not deducting the TDS. 3.2. The learned Commissioner of Income Tax (Appeals) failed to appreciate that appellant was under the bonafide belief that even where the journey undertaken by an employee involves a foreign leg, the employee is entitled to exemp....
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.... appreciate that the appellant was not required go beyond the declarations given by employees and ascertain the LFC amount exempted. 3.5. The learned Commissioner of Income Tax (Appeals) failed to appreciate that very fact that the appeal of the appellant has been admitted by the Hon'ble Karnataka High Court, would itself show that the issue is debatable and there was a reasonable cause and hence, no penalty is leviable u/s 271C. 4. The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Tribunal applicable to the facts of the case. For all these and other grounds, which may be urged at the time of hearing, the appellant prays that its appeal be allowed." 6. The grounds raised by the assessee for Assessment Year 2013-14 in ITA No. 536/Bang/2019 are as under. "1. The order of the learned Commissioner of Income Tax (Appeals) is bad in law and against the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) erred in upholding levy of the penalty of Rs. 37,470/- u/s 271C (1) of the Incometax Act, 1961. 3. The learned Commissioner of Income (Appeals) erred in confirming levy of penalty without appreciating ....
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.... 1403 & 1435 to 1477/Bang/2016 dated 06.04.2017 and submitted that as per this Tribunal order, the Tribunal upheld the order passed by the AO u/s. 201(1) of the IT Act and this finding is also given by the Tribunal in this case that the assessee has made no efforts to prove how its belief was formed that such foreign travel expenses would come within the ambit of section 10(5) of the IT Act. He submitted that in view of this finding of Tribunal in quantum proceedings, penalty should be confirmed. 8. At this juncture, the bench pointed out that as per para 12 of the Tribunal order rendered in the case of State Bank of India Vs. ACIT (supra), the Tribunal has considered various factual aspects such as the assessee bank has allowed exemption to all its employees who have submitted LFC claim and the Revenue has not disputed the LFC claim in respect of these employees except in respect of 12 employees who have travelled to foreign countries as part of their travel itinerary with designated place of travel in India. The bench made a query as to whether these details are available on record that the demand in the present case has been raised in respect of all employees or only few emplo....
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....d by the Revenue as not eligible for exemption under section 10(5) in respect of amount reimbursed towards foreign leg of their travel. The explanation of the assessee bank is that while calculating the tax liability of its employees, the figure of LFC was always exempted and this rule was being followed since many years, being in a nature of thumb rule and TDS exemption of LFC was thus allowed almost mechanically year after year. To our mind, it is important to be consistent but at the same time, one needs to be mindful of what been submitted by the employees towards their LFC claims. It appears that the assessee bank has looked at these 12 employees' claim broadly, as in other cases, in terms of actual travel being undertaken, the designated place being in India and the amount of claim not exceeding the economy fare of the national carrier by the shortest route to the place of destination. However, the Revenue's case is that what the assessee bank has failed to consider is that the travel plan includes the foreign leg of travel and corresponding travel expenses which is not eligible for exemption under section 10(5) of the Act. However, the assessee's bank explanati....