TaxTMI 
TaxTMI 
2026 (8) TMI 1558
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....the order of Ld. First Appellate Authority indicated Column-E, herein below: - S. No. Appeal Nos. A.Y.s Appellant CIT(A) Order Details/Addl. JCIT(A)-2 Respondent A B C D E F 1. ITA No. 734/Chny/2026 2016-17 SBI LHO, Chennai, No.16, Circletophouse, Collegelane, Chennai-600 006. [PAN: AAACS8577K] DIN & Order No. ITBA/APL/S/250/2025-26/1083576259(1) dated 11.12.2025 Deputy Commissioner of Income Tax, TDS Circle-3(1), Chennai. 2. ITA No. 742/Chny/2026 2016-17 SBI, CPPC, Chennai Branch CEN Pension Processing Centre, 2nd Floor, 1124 Kaliamman Koil Street, Virugambakkam, Chennai-600 092. [PAN: AAACS8577K] DIN & Order No. ITBA/APL/S/250/2025-26/1083581342(1) dated 11.12.2025 Income Tax Officer, TDS Ward-3(1), Chennai. 3. ITA No. 2895/Chny/2026 2016-17 SBI SME Palipalayam BR Bypass Road, Pallipalayam, Namakkal, Pallipalayam, Tamil Nadu-638 006. [PAN: AAACS8577K] DIN & Order No. ITBA/NFAC/S/250/2025-26/1087464836(1) dated 17.03.2026 Joint Commissioner of Income Tax TDS, TDS Range, Coimbatore. 4. ITA No. 1399/Chny/2026 2016-17 SBI Chinmaya Nagar, No.5, Sayee Nagar, Chinmaya Nagar, Chennai-600....
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....u-641 601. [PAN: AAACS8577K] DIN & Order No. ITBA/APL/S/250/2025-26/1086182232(1) dated 18.02.2026 Deputy Commissioner of Income Tax, TDS Circle Coimbatore. 13. ITA No. 1486/Chny/2026 2017-18 State Bank of India Branch: Attur, MGP Building, Kamarajanar Road, Attur, Salem, Tamil Nadu-636 102. [PAN: AAACS8577K] DIN & Order No. ITBA/APL/S/250/2025-26/1085296545(1) dated 29.01.2026 Income Tax officer, TDS, Salem. GROUDS OF APPEAL ITA No. 734/Chny/2026 1. The Learned Commissioner of Income-tax (Appeals) ("CIT(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 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 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 ....
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....nged before the Division bench and later the Division bench's order before the Hon'ble Supreme Court and that the Hon'ble Supreme Court in SLP(C) no. 16734 of 2023 has ordered the Appellant bank from not making any recoveries from its employees during the pendency of the petition. 8. Without prejudice to above grounds, 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. ITA NO.742/Chny/2026 1 The Learned Commissioner of Income-tax (Appeals) ("CIT(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 Act'). 2 The CIT (A) erred in not appreciating that the Appellant had issued e-Circular no. CDO/P&HRD-PM....
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....ct tax at source 7. The CIT(A) erred in observing that the legal obligation to deduct tax was reinstated once the interim order passed by the Hon'ble Madras High Court was vacated without appreciating that the order of the Single Judge of the Hon'ble Madras High Court was challenged before the Division bench and later the Division bench's order before the Hon'ble Supreme Court and that the Hon'ble Supreme Court in SLP(C) no. 16734 of 2023 has ordered the Appellant bank from not making any recoveries from its employees during the pendency of the petition. Without prejudice to above grounds, 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. ITA No.2895/Chny/2026 1. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in confi....
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....10. The learned CIT(A) erred in not following / appreciating the ratio of the judgment of the Hon'ble Kerala High Court in State Bank of India v. CIT (ITA No. 45 of 2025), wherein, on similar facts, the Appellant's action in not deducting tax at source pursuant to the Madras High Court's interim directions was held to be justified. 11. The learned CIT (A) failed to appreciate that section 271C is subject to section 273B and that once reasonable cause is established, no penalty can survive. 12. The Appellant craves leave to add, amend, alter, delete or modify any of the above grounds at the time of hearing. ITA NO.1399/Chny/2026 1. The Learned Commissioner of Income-tax (Appeals) ("CIT(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 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 15th April 2014 stating that the employees shall not be entitled to visit overseas countries/centers as part of leave travel....
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....d once the interim order passed by the Hon'ble Madras High Court was vacated without appreciating that the order of the Single Judge of the Hon'ble Madras High Court was challenged before the Division bench and later the Division bench's order before the Hon'ble Supreme Court and that the Hon'ble Supreme Court in SLP(C) no. 16734 of 2023 has ordered the Appellant bank from not making any recoveries from its employees during the pendency of the petition. 8. Without prejudice to above grounds, 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. ITA No.1400/Chny/2026 1. The Learned Commissioner of Income-tax (Appeals) ("CIT(A)") erred in confirming the order of the Assessing Officer ("AO") holding the appellant to be an assessee in default for failing to deduct t....
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....ble Court after considering the above set of facts held that the Appellant was justified in not deducting tax at source in view of the interim directions issued by the Madras High Court asking the Appellant not to deduct tax at source. 7. The CIT(A) erred in observing that the legal obligation to deduct tax was reinstated once the interim order passed by the Hon'ble Madras High Court was vacated without appreciating that the order of the Single Judge of the Hon'ble Madras High Court was challenged before the Division bench and later the Division bench's order before the Hon'ble Supreme Court and that the Hon'ble Supreme Court in SLP(C) no. 16734 of 2023 has ordered the Appellant bank from not making any recoveries from its employees during the pendency of the petition. 8. Without prejudice to above grounds, 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, ....
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....'ble Madras High Court till the time they were in force as acting contrary to the orders of the Hon'ble Court would have amounted to contempt of Court. 6. The CIT (A) erred in not following the judgment of the Hon'ble Kerala High Court in State Bank of India v. CIT (ITA no. 45 of 2025) where the Hon'ble Court after considering the above set of facts held that the Appellant was justified in not deducting tax at source in view of the interim directions issued by the Madras High Court asking the Appellant not to deduct tax at source, 7. The CIT(A) erred in observing that the legal obligation to deduct tax was reinstated once the interim order passed by the Hon'ble Madras High Court was vacated without appreciating that the order of the Single Judge of the Hon'ble Madras High Court was challenged before the Division bench and later the Division bench's order before the Hon'ble Supreme Court and that the Hon'ble Supreme Court in SLP(C) no. 16734 of 2023 has ordered the Appellant bank from not making any recoveries from its employees during the pendency of the petition. 8. Without prejudice to above grounds, the CIT (A) erred....
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....t to be an assessee in default. 5. The CIT (A) erred in not quashing the order of the AO holding the Appellant to be an assessee in default for the reason that the Appellant, even if it wanted to, could not have deducted tax at source on LTC paid during the year under consideration in view of the orders of the Hon'ble Madras High Court till the time they were in force as acting contrary to the orders of the Hon'ble Court would have amounted to contempt of Court. 6. The CIT (A) erred in not following the judgment of the Hon'ble Kerala High Court in State Bank of India v. CIT (ITA no. 45 of 2025) where the Hon'ble Court after considering the above set of facts held that the Appellant was justified in not deducting tax at source in view of the interim directions issued by the Madras High Court asking the Appellant not to deduct tax at source. 7. The CIT(A) erred in observing that the legal obligation to deduct tax was reinstated once the interim order passed by the Hon'ble Madras High Court was vacated without appreciating that the order of the Single Judge of the Hon'ble Madras High Court was challenged before the Division bench and ....
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....ebruary 2015 having directed the Appellant not to deduct at source on LTC had further stated that if the writ petition challenging the Circular was dismissed, the employees would be liable to pay tax on the LTC amount paid by the Appellant and, therefore, the CIT (A) ought to have quashed the order of the AO holding the Appellant to be an assessee in default. 5. The CIT (A) erred in not quashing the order of the AO holding the Appellant to be an assessee in default for the reason that the Appellant, even if it wanted to, could not have deducted tax at source on LTC paid during the year under consideration in view of the orders of the Hon'ble Madras High Court till the time they were in force as acting contrary to the orders of the Hon'ble Court would have amounted to contempt of Court. 6. The CIT (A) erred in not following the judgment of the Hon'ble Kerala High Court in State Bank of India v. CIT (ITA no. 45 of 2025) where the Hon'ble Court after considering the above set of facts held that the Appellant was justified in not deducting tax at source in view of the interim directions issued by the Madras High Court asking the Appellant not to deduct....
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....dings; hence, the Appellant had more than sufficient and reasonable cause for not deducting tax. 6. The learned CIT(A) failed to appreciate that the Hon'ble Madras High Court and also clarified that, in the event the writ petition failed, the tax liability would fall upon the employees, thereby reinforcing that the Appellant's conduct was under judicial sanction and devoid of any revenue-evasive intent. 7. The learned CIT (A) erred in not appreciating that the issue was, in any event, debatable and legally contentious, and therefore penalty under section 271C, being penal in nature, was wholly unsustainable. 8. The learned CIT(A) erred in not following / appreciating the ratio of the judgment of the Hon'ble Kerala High Court in State Bank of India v. CIT (ITA No. 45 of 2025), wherein, on similar facts, the Appellant's action in not deducting tax at source pursuant to the Madras High Court's interim directions was held to be justified. 9. The learned CIT (A) failed to appreciate that section 271C is subject to section 273B and that once reasonable cause is established, no penalty can survive. 10. The Appellant craves l....
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.... Madras High Court was vacated without appreciating that the order of the Single Judge of the Hon'ble Madras High Court was challenged before the Division bench and later the Division bench's order before the Hon'ble Supreme Court and that the Hon'ble Supreme Court in SLP(C) no. 16734 of 2023 has ordered the Appellant bank from not making any recoveries from its employees during the pendency of the petition. 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. ITA No.2894/Chny/2026 1. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in confirming the penalty levied under section 271C of the Income-tax Act, 1961. 2. The learned CIT (A) failed to appreciate that if a case has strong merits, dismissing it solely due to a delay can cause a "gross miscarriage of justice". 3. The learned CIT(A) failed to take a adopt a liberal approach for condoning delay to ensure justice, rather than shutting out cases on technical grounds as held by the Hon'ble Supreme Court in Collector, Land Acquisition, Anantnag & Anr. v. ....
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....no penalty can survive. 12. The Appellant craves leave to add, amend, alter, delete or modify any of the above grounds at the time of hearing. ITA No.1402/Chny/2026 1. The Learned Commissioner of Income-tax (Appeals) ("CIT(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 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 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 th....
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.... 8. Without prejudice to above grounds, 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. ITA No.1486/Chny/2026 1. The Learned Commissioner of Income-tax (Appeal) ("CIT(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 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 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 (....
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.... High Court was challenged before the Division bench and later the Division bench's order before the Hon'ble Supreme Court and that the Hon'ble Supreme Court in SLP(C) no. 16734 of 2023 has ordered the Appellant bank from not making any recoveries from its employees during the pendency of the petition. 8. Without prejudice to above grounds, 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. 2. The brief facts of the case are that the assessee appellants are various branches of the State Bank of India (SBI). We have gone through the grounds raised by the assessee branches. The issue under consideration is identical in all the appeals, i.e., taxability of foreign leave travel concession (LTC). It is observed that orders u/s. 201 and 201(1A) of the Act was passed in the case of ....
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.....2014 is valid and therefore overseas LFC travel not permitted. Annexure-4 7 to 28 No 6. 08.08.2022 Event: Madras High Court gives interim relief to SBI Officers. Condition: No recovery shall be affected from their salary and also that no coercive proceedings shall be instituted by any authorities against them during the pendency of the Writ Appeal. No 7. 04.11.2022 Event: Hon'ble Supreme Court judgment held LFC to be taxable. No 8. 08.06.2023 Event: Madras High court set aside judgment dated 24.06.2022. Condition: Association and SBI to discuss and settle amicably within 3 months. Impact: Foreign LFC continues. Annexure-5 29 to 41 No 9. 28.08.2023 Event: SBI approaches Supreme Court who grants a stay on judgment dt. 08.06.2023. Condition: However, the petitioner Bank shall not make any recoveries from its employees during the pendency of the present Writ Petition. Impact: Foreign LFC Stopped. Annexure-6 42 to 43 Yes 10. 27.02.2024 Event: ITAT Delhi holds SBI in default. No 11. 11.07.2024 Event: Delhi High Court holds SBI in default. ....