AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 290
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....C payments made to assessee's employees. In accordance with the same, the assessee was directed to provide details of LTC payments [foreign travel] and reasons for non deduction of TDS under section 192B of the Act. The reply of the assessee and details are reproduced in page 2 & 3 of the penalty order. According to the Assessing Officer, as it was observed from the reply, that one of the employees of the assessee claimed LFC (leave fare concession) amounting to Rs..1,85,452/- involving travel places outside India. The Assessing Officer observed that the exemption under section 10(5) of the Act is not available as the place of travelling of the said employee is not situated in India. The Assessing Officer further observed that the Hon'ble Supreme Court in the case of SBI v. ACIT in Civil Appeal No. 8181 of 2022) dated 04.11.2022 confirmed the view of the Assessing Officer's stand therein, treating the employer i.e., the assessee in default for non deducting tax source while realizing payments to its employee as leave fare concession on foreign travel. Accordingly, the Assessing Officer determined non deduction of tax at source under section 201 of the Act and interest under section....
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....rim stay, thereby, following recovery in lieu of TDS. The ld. CIT(A) has passed the impugned order during the pendency of SLP before the Hon'ble Supreme Court. She submits that the ld. CIT(A) failed to consider the proforma submitted by the employees containing the entire details of journey undertaken and the related expenses are not hit by the provisions of section 10(5) of the Act. Further, she argued that the ld. CIT(A) is misplaced in relying on the decision of the Hon'ble Supreme Court in Civil Appeal No. 8181 of 2022. The ld. CIT(A) ought to have seen that once conditions specified in proviso to section 201(1) of the Act are not satisfied, the interest under section 201(1A) of the Act will be untenable. The ld. CIT(A) failed to see that when there are different views taken by the coordinate benches of the Tribunal. However, without prejudice, she argued that the ld. CIT(A) erred in not appreciating that the assessee was under bonafide belief that no TDS is applicable on the reimbursement of the LTC/LFC. The ld. AR prayed to allow the grounds of appeal. 6. The ld. DR Shri N. Madan Kumar, JCIT submits that the assessee is liable to deduct TDS on LTC/LFC from 24.06.2022 to 08.0....
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....nt commissioner of Income Tax Civil Appeal to 8181 of 2022) dated 4th Nov, 2022 has dismissed the assessee's appeal and confirmed AD's stand as treating the employer as assessee in default for not deducting tax at source while releasing payments to its employees as Leave travel Concession (LFC)(on foreign travel). The relevant part of the decision of the Apex Court is as under 10. The provisions of low discussed above prescribe that the air fare between the two points, within India will be given and the LTC which will be given will be of the shortest route between these two places, which have to be within India. A conjoint reading of the provisions discussed herein with the facts of this case cannot sustain the argument of the appellant that the travel of its employees was within India and no payments were made for any foreign leg involved. 11. We do not want to get into the role of the travel agencies and the present dynamics of or fore, but it is difficult for us to accept that a person will avail foreign tour without paying any price for it. We leave it at that. 12. It can be seen from the records that many of the employees of the appellants had undertaken travel t....
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....reimbursement of LTC was exempted. There was no intention of legislature to allow the employees to travel abroad in the garb of LTC available by virtue of Section 10(5) of the Act Therefore, the Revenue has a valid objection (apart from other objections which are clearly violative of the Statute), that the intention and purpose of the scheme is also violated in the garb of tour within India, foreign travel is being availed. 16. The aforementioned order passed by the CIT(A) has rightly held that the obligation of deducting tax is distinct from payment of tax. The appellant cannot claim ignorance about the travel plans of its employees as during settlement of LTC Bills the complete facts are available before the assessee about the details of their employees' travels. Therefore, it cannot be a case of bonafide mistake, as all the relevant facts were before the Assessee employer and he was therefore fully in a position to calculate the 'estimated income' of its employees. The contention of Shri K.V. Vishwanathan, learned senior advocate that there may be a bonafide mistake by the assessee-employer in calculating the 'estimated income' cannot be accepted since all the relevant....
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....can be availed as long as the starting and destination points remain within India. The Hon'ble Supreme Court was pleased to hold that there is no ambiguity in for LTC is for travel within India, from one place in India to another place in India. Further, the Hon'ble Supreme Court did not accept another contention of the assessee i.e., State Bank of India therein, in contending that the payments made to employees was of the shortest route of their actual travel and held the provisions under section 10(5) of the Act is not covered the movement the employees undertake travel with a foreign leg. The Hon'ble Supreme Court was pleased to observe, by referring to 6th Pay Commission Report, the basic objective of the LTC scheme was to familiarize a civil servant or Government employee to gain some perspective of Indian culture by travelling in this vast country. Further, the Pay Commission also rejected the demand of cash compensation in lieu of LTC involving foreign travel. Further, the Hon'ble Supreme Court accepted argument of the Revenue, as there was no intention of the Legislature to allow the employees to travel abroad in the garb of LTC available by virtue of section 10(5) of the A....
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....urt in State Bank of India against the Assistant Commissioner of Income Tax in Special Leave Appeal (C) No.9876 of 2020, SLP No. 9876 of 2020/ CIVIL APPEAL NO 8181 OF 2022 is dated 04.11.2022. From 04-11-20022 onwards the appellant has to deduct TDS on foreign LTC reimbursement given. vi. On 08.06.2023 Hon'ble Division Bench of the Madras High Court allowed the W.A No. 1653/2022 quashed the Circulars dated 07.04.2014 issued by IBA and the letter dated 15.04.2014 issued by the Bank. vii. From 08.06.2023 the employees are eligible for foreign LTC and the bank is liable to deduct TDS according to decision of the Apex Court in [2022] 144 taxmann.com 131 (SC) SUPREME COURT OF INDIA State Bank of India Assistant Commissioner of Income-tax. viii. The Apex Court on 28.08.2023 has stayed the operation of the judgment of the Madras High Court in W.A No. 1653 /2022 and the Bank is directed not to make any recoveries from its employees during the pendency of the SLP. Thus from 28.08.2023 the Bank cannot make any recovery from employee. 10. On perusal of the above, we note that according to the ld. CIT(A) the receipt from LTC of foreign tour are taxable and the assessee is liable to ....