TaxTMI 
TaxTMI 
2020 (7) TMI 25
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.... 3. The Commissioner of income Tax (Appeals) has grossly erred in upholding the levy of penalty u/s 271C of the Act without appreciating the fact that the appellant had complied with all the provisions of TDS on salaries under the facts and circumstances of the case and thereby appellate order sustaining penalty is liable to be set aside. 4. The Commissioner of Income Tax (Appeals) has grossly erred in upholding penalty u/s 271C of the Act without appreciating the fact that the interpretation of provisions of Sec. 10(5) was debatable under the facts and circumstances of the case and thereby appellate order sustaining penalty is liable to be set aside. 5. Without prejudice to the above, the Commissioner of Income Tax (Appeals) has grossly erred in upholding penalty u/s 271C of the Act without appreciating the fact that the appellant did not have mala fide intention in not deducting tax at source on LTC portion of salaries under the facts and circumstances of the case and thereby appellate order sustaining penalty is liable to be set aside. 6. Without prejudice to the above, the Commissioner of Income Tax (Appeals) has grossly erred in upholding pen....
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....the Act and further erred in not considering the appellant's claim that the appellant was eligible to be sheltered u/s 273B of the Act for having reasonable cause for not deducting impugned tax at source under the facts and circumstances of the case and thereby appellate order sustaining penalty is liable to be set aside. 12. For these and such other grounds as maybe raised by the appellant during the course of appellate proceedings, appellant hereby humbly prays before this Hon'ble Tribunal to allow the appeal of the appellant in the interest of equity and advancement of substantial cause of justice in the eyes of law." Brief facts of the case are as under: 2. Assessee is a banking institution and the survey under section 130A of the Act was conducted ON 26/12/2013, to verify compliance of TDS. During the course of survey, Ld.AO noticed that, assessee paid reimbursement of leave travel concession to its employees, even in cases where foreign destination was included in the itinerary of such employees. Ld.AO noted that, such reimbursements was made without deducting TDS, and amount paid on foreign travel was treated as exempt under section 10(5) of the Act. A....
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....nce upon orders passed by authorities below. 12. We have perused submissions advanced by both sides in light of records placed before us. We have also perused decision of assessee's own case dated 18/11/2019(supra), relied upon by Ld.AR, wherein identical issue has been dealt with and decided as under: 5. We heard rival submissions and perused material on record. Prima fade, the sole disputed issue in respect of penalty levied u/s 271C of the Act for non-deduction of tax at source on LTC. The assessee-bank has failed to deduct TDS but in proceedings u/s 201 of the Act, the a.ssessee has accepted the claim and paid the amounts. The fact that non-deduction of TDS has come out in the survey operations u/s 133A of the Act. We found that the assessee has not deducted TDS and explained reasonable cause in the penalty proceedings and the assessee's action is not wanton but on a bona fide belief. We found the co-ordinate bench of Tribunal in the case of Syndicate Bank vs. ACIT in ITA Nos.651 to 656/Bang/2019 dated 19/07/2019 has deleted the penalty u/s 271C of the Act and has observed at paras.11 to 14 which read as under: 11. The learned counsel for the .4ssessee ....
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....e to show that its employees had actually utilized the amount paid towards leave travel concession. Even though the same is not required as per decision referred supra, in the instant case, the assessee bank has been diligent, and has collected and brought on record evidence to show that its employees had actual/v utilized the amount paid towards leave travel concession. 12. At the same time, in terms of adherence to the provisions as contained in section 10(5) read with Rule 2B, we find that the assessee bank has allowed exemption to all its employees who have submitted LTC claim, The Revenue has not disputed the LTC claim in respect of these employees except in respect of 12 employees. These 12 employees, who have travelled to foreign countries as part of their travel itinerary with designated place of travel in India, and in respect of which they have submitted their LTC claim, has been disputed by the Revenue as n 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 LTC was always exempted and this r....