TaxTMI 
TaxTMI 
2022 (7) TMI 291
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....014. 2. The first writ petitioner is All India State Bank Officers Federation. The second writ petitioner is All India Bank Officers' Confederation and the third petitioner is Mr.K.Bhavanisankar. 3. The first writ petitioner is a registered Trade Union and represents more than 90% of the officers employed in the offices of the State Bank of India all over India. The second writ petitioner is also a registered Trade Union. 4. The writ petitioners state that as early as on 18.09.1982, the Indian Bank's Association issued a Circular pursuant to such bilateral discussions with the petitioners, permitting L.T.C facility to cover foreign travel also within the eligibility to travel within the Country. This was continued and reiterated in the 3rd respondent's Circular dated 08.10.2008. All the public Sector Banks, the State Bank of India and the Scheduled Commercial Banks have implemented and extended the facilities to their officers. There is no additional expenditure for the Banks as the amount paid is only as per the eligibility to travel within the country. 5. The petitioners state that the Leave Travel Concession to the officers' Bank is governed by Rule-44(1) of ....
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.... to the members of the petitioner's federation. 9. The petitioners state the Leave Travel Concession is a precious facility obtained by the officers and is part of their right to welfare to be provided by the employers for rendering dedicated service to the bank. Thus, the said facility cannot be denied to the officers unilaterally by the respondents. It is stated that similar provisions are available in the Banking Companies (Acquisition and takeover of undertakings) Act, 1970, entitles officers of other Banks to be officer Directors in their Banks. 10. The respondents / State Bank of India disputed the contentions raised by the petitioners in their counter affidavit. The respondents state that State Bank of India is a body corporate constituted under the State Bank of India Act, 1955, carrying on business of banking with its Corporate Centre at State Bank Bhavan, Madam Cama Road, Mumbai - 400 021 and its offices and branches all over India. 11. The employees of the State Bank can be broadly classified under two categories viz., (i) Award Staff, who are governed by the Industrial Disputes Act, 1947, and (ii) Officers, who perform managerial and supervisory functions. The St....
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....tination in India, and visit to a foreign land enroute had been only incidentally permitted, while ensuring that no extra financial commitment is incurred for the same. 13. The Indian Banks' Association by Circular dated 07.04.2014 advised as follows: ".......different Banks have issued different administrative guidelines for availing LTC/HTC and reimbursement of expenses incurred in this regard. The matter was also discussed in a review meeting of all CMDs of PSBs, held with the Secretary, Department of Financial Services, Government of India, on 05.03.2014. The Secretary, DFS suggested that IBA should examine the matter and issue uniform guidelines to be followed by all PSBs to prevent the misuse of the facility, if any, by the Officers/employees. Accordingly, the matter was deliberated in the meeting of Managing Committee (MC) of IBA, held on 01.04.2014. The Committee decided that officers/employees shall not be entitled to visit overseas countries/centres as part of LTC/HTC. All the member banks, are therefore, advised to do the needful accordingly." 14. Pursuant to the above Circular, the Management of State Bank by Circular dated 15.04.2014, communicated that it has b....
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....sociation as sought to be wrongly projected by the Petitioners and as such, it is far fetched by the Petitioners to claim that the withdrawal of that benefit, which is impugned in this Writ Petition, could not have been done without negotiations with the authorised representatives of the Officers' Associations. Further, inasmuch as there is nothing pertaining to providing or continuing for any benefit of visiting foreign centres enroute while availing LTC facility for destinations in India in the Joint Note dated 27.04.2010, the reliance placed by the Petitioners on the same cannot improve their case for its continuance in any manner. The respondents state that the negotiations conducted by the Management of State Bank of India with the authorised representatives of Officers' Associations cannot be treated on par with settlements arrived by the Management with the workmen governed by the Industrial Disputes Act, 1947, for all purposes and intent. The Leave Travel Concession facility for destinations in India as statutorily incorporated in Rule 44 of the State Bank of India Officers' Service Rules, 1992, which does not expressly include for travel to any place outside In....
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....reated on par with settlements arrived by the Management with the workmen governed by the Industrial Disputes Act, 1947, for all purposes and intent. Be that as it may, the Leave Travel Concession facility for destinations in India as statutorily incorporated in Rule 44 of the State Bank of India Officers' Service Rules, 1992, which does not expressly include for travel to any place outside India or to any foreign country, continues to be in operation and hence, the Petitioners are not prejudiced by the mere withdrawal of the benefit of visiting centres enroute while availing LTC facility for destinations in India that had been extended only through non-statutory circulars. 21. The 4th respondent / Commissioner of Income Tax filed an affidavit, stating that originally an interim stay of operation of the impugned Circulars issued by the respondents was granted by this Court by order dated 25.04.2014 on the undertaking given by the petitioners that later if the writ petition is dismissed, the amount paid towards LTC to cover foreign/overseas travel will be refunded by the individual officers concerned. However, thereafter, on 16.02.2015, this Hon'ble Court explained the inte....
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....Leave Travel Concession on foreign travel, whether such Leave Travel Concession on foreign travel forms a part of income or excluded from income under the Income Tax Act, 1961 will have to be decided as per the provisions of the Income Tax Act, 1961. Such question can be determined only by the assessing officer of the Banks and the individual employees have no say in the same. The individual employees are entitled to take credit of the tax deducted at source by the banks or claim refund of the same, if their income is below the taxable limit or there has been an excess payment by them. 25. The learned Senior Counsel appearing on behalf of the petitioners contended that the benefit of LTC to foreign countries are being extended to the officers of the State Bank of India right from the year 1982. The benefit was granted based on the negotiations between the Officers Association and the Management. Once the benefits or advantages are conferred on the officials of the Bank after negotiation, then it is to be construed as a right and such a right cannot be taken away unilaterally by the Respondent / Management. In the present case, the decision impugned had been taken unilaterally by t....
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.... law validly made." (b) In the case of Mahabir Auto Stores and Others Vs. Indian Oil Corporation and others, reported in (1990) 3 SCC 752, the Hon'ble Supreme Court of India held as follows: "17. We are of the opinion that in all such cases whether public law or private law rights are involved, depends upon the facts and circumstances of the case. The dichotomy between rights and remedies cannot be obliterated by any strait-jacket formula. It has to be examined in each particular case. Mr Salve sought to urge that there are certain cases under Article 14 of arbitrary exercise of such "power" and not cases of exercise of a "right" arising either under a contract or under a statute. We are of the opinion that that would depend upon the factual matrix." 29. Relying on the above judgments, the learned Senior Counsel for the petitioners is of an opinion that even in case, where, there is no law in a particular subject, then also, the principles of natural justice operates and thus, in the present case, even in the absence of any bipartite agreement between the employer and employee, the principles of natural justice is to be followed as the advantage granted to the officers of t....
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....their Managing Committee meeting held on 01.04.2014 to the effect that the Officers / Employees shall not be entitled to visit overseas countries / centres as part of LTC/HTC. 33. The learned Senior Counsel, while narrating the facts, stated that Section 43 of the State Bank of India Act provides terms and conditions of the officers and employees of the Bank. 34. The Leave Travel Concession facility for officers of the Bank are provided in Rule 44 of the State Bank of India Officers Service Rules, 1992, which has got statutory force. On 20.08.1981, the Bank issued a circular of LTC, covering foreign travel, which has no statutory force. In view of the fact the LTC contemplates under Rule 44 does not provide any such travel covering foreign travel. Therefore, the Circular dated 20.08.1981 has no statutory force and it is a concession extended to the officers, which is otherwise not contemplated under Rule 44 of the State Bank of India Officers Service Rules. On 18.09.1982, IBA Circular on LTC to cover foreign travel, regarding reimbursement of actual charges for the entire journey within India or outside India or the cost of fare to his home town / designate place by the shortest ....
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.... withdrawn pursuant to the decision taken by the IBA in its meeting and based on the memorandum issued by the Ministry of Finance, not to provide LTC to travel abroad to the officers of the Public Sector Banks and others. When the benefits granted is not statutory in character and there is no statutory enforceability, then the said benefit is alone is withdrawn by the respondents and thus, there is no infirmity. 38. It is contended that Commissioner of Income Tax (TDS) demanding TDS on LTC / HTC from the officers and also sought to proceed against the respondents 1 and 2 Bank as assessee in default. Several proceedings all over the country before various forums are pending and one of the issue on the subject matter reached the Hon'ble Supreme Court by way of SLP filed by the respondents 1 and 2. On 13.01.2020, the Hon'ble Supreme Court of India stayed the operation and effect of the order presently under challenge that is TDS in the SLP filed by the State Bank of India against the Assistant Commissioner of Income Tax in Special leave Appeal (C) No.9876 of 2020. 39. With reference to the judgment relied on by the petitioners in the case of H.L.Trehan and others (cited supr....
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....n 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 tour received by the tour operator demonstrate that it is the consolidated charges for the entire journey. In such circumstances, in our considered view, the same cannot be split up to avail the benefit of LTC/LFC by the employee. The plea of bona fide belief put up by the assessee placing reliance on the Circular issued by the India Banks' Association is untenable since no clarification from the department was sought by the a....
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....officers of the State Bank of India. 44. Rule 44 of the State Bank of India Officers, Service Rules, 1992, contemplates Leave Travel Concession and Leave Encashment and Sub Rule-1 to Rule-44 provides that " (1) During each block of four years, an officer shall be eligible for leave travel concession for travel to his home town once in each block of two years. Alternatively, he may travel in one block of two years to his home town and in the other block to any place in India by the shortest route." 45. Further, definitions are also enumerated for the purpose of Rule 44 of the State Bank of India Officers, Service Rules, 1992. 46. Perusal of the Rule reveals that the Leave Travel Concession to the Officers of the State Bank of India is confined only to "any place in India by the shortest route". When the Rule contemplates that the Leave Travel Concession is permissible to any place in India in the absence of amending the Rule to extend the benefit of Leave Travel Concession to abroad, the said Circular issued contrary to the terms of the Rule cannot be construed as a service right extended to the officers. 47. Pertinently, it is not in dispute that Rule 44 contemplates Leave Tra....
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....country may be reimbursed subject to overall ceiling of the entitlement of the officer. The above two letters of the Indian Bank Association and State Bank of India are unambiguous that there was no concrete or definite policy or facility to travel abroad has been incorporated in the State Bank of India Officers Service Rules 1992. 50. Absolutely, there was no bipartite agreement or settlement between the parties. The officers of the Bank are permitted to avail reimbursement facility by way of simple instructions. The ambiguity involved in such instructions normally result in untruthful claims by the officers, though not bogus claims. 51. The State Bank of India itself encouraged such untruthful claims by way of such instructions, which is not issued in consonance with Rule 44 of the State Bank of India Officers Service Rules. For example, without travelling in a particular route within India and based on the ceiling fixed for reimbursement, the officer would be claiming reimbursement for the expenses met out in respect of the foreign travel. 52. In the case of Director General of Foreign Trade and Others Vs. Kanak Exports and Others reported in (2016) 2 SCC 226. The Hon'ble....
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....iples regarding the existing right conferred on the employees and advantage of the benefit enjoyed by the Government servants were taken into consideration by the Hon'ble Supreme Court of India. However, in the present case, a distinction is required with reference to the service conditions, or rights of the employees and also the concessions and facilities provided to such employees, which do not have statutory force in the eye of law. Thus, the principles cannot be applied in respect of the facts and circumstances of the case on hand. 54. Regarding the submission of the Income Tax Department, no doubt, the provisions of the Act are to be applied scrupulously. Under Section 10(5) of the Income Tax Act, Travel Concession within India alone is exempted. The Travel Concession, if extended to other countries, then the exemption Clause cannot be applied and the persons are liable to pay tax under the said provision. Thus, the Income Tax Department is empowered to invoke the provisions, if the Travel Concession is extended to abroad and in all such cases, they are liable to deduct TDS as applicable and by following the procedures as contemplated under the Income Tax Act. 55. Conce....
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.... Cabinet Secretary, with a copy endorsed to Secretary, DFS has raised concern relating to irregularities observed in the leave travel concession/leave travel allowance (LTC/LTA) schemes prevalent in various public sector organisations including PSBs and suggested a review of the rules and guidelines for LTC/LTA in various organisations in the public sector and instruct the said organisations to take strict departmental action against the erring officials in specific cases of violation. 2. Pursuant to the above direction of CVC, the matter was examined in this Department and it was decided that PSBs/PSICs/FIs/NABARD/RBI/IRDA/PFRDA may be advised to formulate LTC/LTA schemes based on the principles of the GOI Scheme. 3. The LTC/LIA scheme in particular should cover following: a) travel to foreign destinations, including travel via foreign destinations while availing LTC facility may not be allowed. b) reimbursement of fare should be based on actual expenditure which in turn should not be beyond the entitled class of travel: c) In case the officer travels in a class lower than his entitled class then his entitlement would be limited to the class of travel. If part of the jou....
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....caused any prejudice and thus, this Court do not find any perversity in respect of the decision taken for withdrawal of the additional concession granted to the officers of State Bank of India to travel abroad under Leave Travel Concession scheme. However, it is made clear that the officers are entitled to the Leave Travel Concession and Leave Encashment as contemplated under Rule 44 of the State Bank of India Officers Service Rules, 1992. 59. Regarding the ground raised on behalf of the petitioners that the principles of natural justice has been violated, this Court is of the considered opinion that natural justice principles cannot be adopted in a straitjacket formula. The principles are to be applied with reference to the facts and circumstances of the particular case. If no prejudice is caused to the person raising the ground of principles of natural justice, then the show cause notice or an opportunity became a futile exercise and non-issuance of show cause notice would not be a ground to vitiate the entire proceedings. Therefore, there cannot be any mechanical approach by the Courts, while applying the principles of natural justice for the purpose of setting aside the decisi....
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....tantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest. (3)No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice. (4)In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person. (5)The "prejudice" exception must be more than a mere appreh....