TaxTMI 
TaxTMI 
2026 (4) TMI 1887
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....ssee in default for failing to deduct tax at source under section 192 of the Income-tax Act, 1961 [the Act). 2. The CIT(A) erred in not appreciating that the Appellant had issued e Circular no. CDO/P&HRD-PM/7/2014-15 dated 15% April 2014 stating that the employees shall not be entitled to visit overseas countries/ centers as part of leave travel concession ("LTC") which Circular was challenged by the All India State Bank Officers Federation & Ors. before the Madras High Court by way of a writ petition (WP no. 11991 of 2014) and that the Madras High Court had vide its order dated 25 April 2014 granted interim stay of the Circular. 3. The CIT(A) further erred in not appreciating that tax was not deducted at source by the Appellant on the LTC paid to its employees during the year under consideration in view of the specific interim directions issued by the Hon'ble Madras High Court in its order dated 16 February 2015 by which the Court held that the LTC paid or reimbursed would not amount to income and that no tax was to be deducted thereon. The CIT(A) ought to have appreciated that if the LIC was not to be treated as income of the employees as per the order of th....
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....leave to add, amend, alter or delete and/or modify the above grounds of appeal before or during the course of hearing. ITA No. 400/Ahd/2026 (A.Y. 2017-18) 1. The Learned Commissioner of Income-tax (Appeals) ("C1T(A)") erred in confirming the order of the Assessing Officer ("AO") holding the appellant to be an assessee in default for failing to deduct tax at source under section 192 of the Income-tax Act, 1961 (the Act1). 2. The CIT(A) erred in not appreciating that the Appellant had issued e Circular no. CDO/P&HRD-PM/7/2014-15 dated 15th April 2014 stating that the employees shall not be entitled to visit overseas countries/ centers as part of leave travel concession ("LTC") which Circular was challenged by the All India State Bank Officers Federation & Ors. before the Madras High Court by way of a writ petition (WP no. 11991 of 2014) and that the Madras High Court had vide its order dated 25th April 2014 granted interim stay of the Circular. 3. The CIT(A) further erred in not appreciating that tax was not deducted at source by the Appellant on the LTC paid to its employees during the year under consideration in view of the specific interim direc....
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....unds, the CIT(A) erred in not holding that the Appellant could not have been deemed to be an assessee in default under section 201(1) of the Act if the employee had furnished the return of income, taken into account such sum for computing income and paid the tax due on income declared by the employee. The appellant craves leave to add, amend, alter or delete and/or modify the above grounds of appeal before or during the course of hearing. 3. The facts of the case are that assessee, M/s. State Bank Of India (TAN: BRDS034528), is a banking branch of M/s. State Bank of India (SBI), which is engaged in the banking business. The Hon'ble Supreme Court, vide order dated 04.11.2022 in Civil Appeal No. 8181 of 2022, held that once an employee undertakes travel involving a foreign leg, such travel cannot be regarded as travel "within India" and, therefore, does not fall within The ambit of section 10(5) of the Act. The Court further held that it is incumbent upon the employer to apply its mind and discharge its statutory obligation under section 192(1) of the Act by deducting tax at source. In view of the above decision of the Hon'ble Apex Court, information was obtained ....
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....it in the aforesaid contention of the assessee. The interim directions of the Hon'ble Madras High Court were in force during the relevant previous year and the assessee, being a party to the proceedings, was duty bound to comply with the same. The obligation under section 192 of the Act to deduct tax at source cannot be read in isolation and must yield to binding judicial orders. Therefore, the failure to deduct tax in such circumstances cannot be equated with a default contemplated under section 201(1) of the Act. 15. We further find that an identical issue has been considered by the Co ordinate Bench of the Tribunal in the case of State Bank of India in ITA No.514/Agr/2024, wherein after considering the decision of the Hon'ble Supreme Court as well as the interim orders of the Hon'ble Madras High Court, ITAT held that the assessee bank could not be treated as an assessee in default since it was bound to follow the interim directions of the Hon'ble High Court. The Tribunal categorically observed that the assessee had no option but to comply with the orders of the Hon'ble High Court and non-deduction of tax in such circumstances could not invite the rigours of section 201(....