TaxTMI 
TaxTMI 
2022 (1) TMI 539
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....law:- "1. Whether the Tribunal was justified in upholding the levy of tax under Section 201(1) and interest under Section 201(1A) of the Act as determined by the TDS authority? 2. Whether denial of exemption under Section 10(5) of the IT Act, 1961 read with Rule 2B of the IT Rules, 1962 of reimbursement of leave travel expenses as claimed by the employee of the Appellant was justifiable? 3. Whether the Tribunal was justified in holding that in the light of the provisions of Section 10(5) of the IT Act, 1961 read with Rule 2B of the IT Rules, 1962 when the employee has undertaken circuitous route which included foreign leg, the exemption is totally denied without considering the expenditure involved by the shortest route from the place of departure to the place of destination when both the places are within India?" 4. The appellant - Bank provides benefit of leave travel concession ('LTC' for short) to its employees and while deducting TDS from the salary of the employees, LTC was considered exempted under Section 10(5) of the Act read with Rule 2B of the Income Tax Rules, 1962 ('Rules' for short). 5. A survey under Section 133A of the Act was....
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....D 194 (Luck-Trib)], dismissed the appeals. The fact that the employees departed from a place in India and ended up his journey in a place in India should have been considered and atleast the cost for the shortage route incurred by the employee should have been considered for exemption under Section 10(5) of the Act and the appellant should have been directed to obtain the details to furnish to the Department to collect short levy, if any. The authorities and the Tribunal ought to have appreciated that invariably reimbursement should only be on the basis of the norms accepted by the banks i.e., the circular issued by the Bankers' Association and the State Bank of India Officers Service Rules, 1992. Thus, it was submitted that there was no default on the part of the appellant to fix the liability under Section 201(1) of the Act and interest under Section 201(1A) of the Act. The appellant was under a bonafide belief that the procedure and norms adopted by the appellant - Bank supported by the instructions issued by the Bankers' Association is justifiable. The Tribunal has failed to consider these aspects in a right perspective. 8. Learned counsel for the revenue justifying the impu....
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....assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding,- (a) on leave to any place in India; (b) to any place in India after retirement from service or after the termination of his service, shall be the amount actually incurred on the performance of such travel subject to the following conditions, namely :- (i) where the journey is performed on or after the 1st day of October, 1997, by air, an amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination; (ii) where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of October, 1997, by any mode of transport other than by air, an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and (iii) where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed on or after the 1st day of October, 1997, between such places, the amount eligible for exemption s....
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....reimbursement may be made not exceeding maximum fare applicable for direct route to the last point of journey destination connected by air from the originating place of journey. 4.3 Banks may frame appropriate guidelines under relevant provision of the Service Regulation. The Managing Committee at its meeting held on 2nd July 2012 approved the above recommendations of the IBA Standing Committee on HR." 13. Sample of Staff LFC bills paid, details placed on record by the assessee would disclose thus: Sl.No. Date Name Farthest Destination in India Places Visited Entitlement as per Notional Fare Eligible Amount-Rs. Amount claimed-Rs. Amount paid. 1. 17/05/2011 [2011-2012] Ajit S Khasnis Wagha Border Bangalore-Colombo, Kaula Lumpur -Putrajaya-Genting Highlands-Singapore-Bangkok-Pattaya-Delhi-Amritsar-Wagha Border etc., Bangalore to Delhi Delhi to Amritsar For 3 Members To and For Taxi Fates [Rs. 575+Rs. 600] 24700 10700 35400 x 2 x 3=212400 1175 Total-213575/- 221675/- 213575/- 2. 09/02/2013 [2012-2013] RameshK Upadhye Katra Bangalore-Colombo-Hong Kong-Macau-Bangkok- ....
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....2011] Airport transfer, Kula Lumpur Tour, Genting Highland Theme Park, Kuala Lumpur, Putrajaya Tour. Singapore [21-04-2011 to 23-04-2011] Jurong Bird Park, Sentosa Island Tour, Bam boat Station, transfer to Singapore Airport. Singapore - Bangkok [23-04-2011] by Flight Pattaya [23-04-2011 to 25-04-2011] Bangkok to Pattaya by Benz coach, Coral Island speed boat Bangkok [25-04-2011 to 27-04-2011] Nong Nooch village, Safari World, Airport transfer Bangkok - Colombo by flight [27-04-2011] Colombo - Delhi by flight [28-04-2011] Delhi - Amritsar [28-04-2011 to 01-05-2011] Delhi - Amritsar By A/C Chair Car Train Amritsar - Wagha border - Amritsar by Cab [29-04- 2011 to 01-05-2011] Amritsar - Delhi By A/C Chair Car Train Delhi - Bangalore by Air [01-05-2011] 16. The receipt of the said travel agency indicates that the amount of Rs. 2,20,500/- only was received towards journey charges/vehicle hired from 17.04.2011 to 01.05.2011 for Singapore-Malaysia- Thailand-Delhi-Amritsar-Wagha Border, for three seats. Thus, the package includes international travel as well in a....
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....ranted to the employees. This provision cannot be interpreted to allow the employees of the Bank to claim LTC for travelling in a circuitous route visiting foreign countries. 18. The intention of the Legislature under Section 10[5] appears to be two fold. One is to provide some relaxation/refreshment to an employee, who can spend time with the family and gain knowledge about the places of visit i.e., to motivate the employees in discharging their regular duties efficiently with the refreshed mind after tour. Secondly, to encourage the tourism in India. Traveling abroad in the guise of LTC/LFC could not entitle for the exemption under Section 10[5] of the Act. The service conditions/circular issued by the Indian Banks' Association is not a statutory Circular and would not govern the department. It would have been different altogether if the employee has traveled to any place in India and then abroad, for example, from Bengaluru to Delhi, thereafter from Delhi to New York. In the instant cases, it is not so. The employees have directly traveled abroad and in the return journey, had visited the places in India. The itinerary confirms the same. 19. The charges towards the said to....
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....an assessee-in-default. For computation of interest under Section 201(1A), there are three elements. One is the quantum on which interest has to be levied. Second is the rate at which interest has to be charged. Third is the period for which interest has to be charged. The rate of interest is provided in the 1961 Act. The quantum on which interest has to be paid is indicated by Section 201 (1A) itself. Sub-section (1A) specifies "on the amount of such tax" which is mentioned in sub-section (1) wherein, it is the amount of tax in respect of which the assessee has been declared in default. The object underlying Section 201(1) is to recover the tax. In the case of short deduction, the object is to recover the shortfall. As far as the period of default is concerned, the period starts from the date of deductibility till the date of actual payment of tax. Therefore, the levy of interest has to be restricted for the above stated period only. It may be clarified that the date of payment by the concerned employee can be treated as the date of actual payment." 22. The liability under Sections 201[1] and 201[1A] would arise only when the assessee has been declared as an a....