TaxTMI 
TaxTMI 
2026 (7) TMI 2037
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....er. 2. At the outset, it is noted that the assessee had moved an application seeking consolidation of the present appeals. During the course of hearing, it was submitted that the issues arising in these appeals stood covered by the decisions of the Co-ordinate Benches, copies of which were placed on record. The learned Departmental Representative (DR) fairly agreed that the issues were covered by the aforesaid decisions. Accordingly, the appeals were treated as heard. 3. The particulars of the appeals are as under: Sr. No. ITA No. Assessment Year TAN/branch of the assessee Date of order under section 201(1)/201(1A) Date of order of learned CIT(A) 1 2453/Mum/2026 2016-17 MUMS70563D, SBI RBO Ghatkopar 17.03.2023 29.12.2025 2 3952/Mum/2026 2016-17 MUMS36892C, SBI, N.G.N. Vaidya Marg, Horniman Circle 18.03.2021 05.02.2026 3 3840/Mum/2026 2016-17 MUMS37769E, SBI, Kemps Corner 22.03.2023 19.02.2026 4 2628/Mum/2026 2016-17 MUMS70656F, SBI RBO Region- 2, Thane Western 09.03.2021 11.02.2026 5 2440/Mum/2026 2017-18 MUMS70563D, SBI RBO Ghatkopar 28.02.2024 29.12.2025 6 4000/....
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....ting a foreign destination while proceeding to a designated place in India. According to the assessee, the expression "shortest route" governed only the monetary ceiling of the exemption and did not prescribe the actual route that the employee was required to follow. The Bank maintained that it had allowed exemption only to the extent of the eligible domestic fare and had acted on a bona fide interpretation of the statutory provisions and the prevailing industry practice. These submissions are summarised in the appellate orders, which record the assessee's stand that the designated place was always situated in India and that the exemption was restricted to the eligible fare under rule 2B. 8. The assessee also relied heavily upon the proceedings before the Hon'ble Madras High Court. It was submitted that the Bank had issued e-Circular No. CDO/P&HRD-PM/7/2014-15 dated 15 April 2014 stating that employees would not be entitled to visit overseas countries or centres as part of LTC. The said circular was challenged by the All India State Bank Officers Federation and others in W.P. No. 11991 of 2014. By an interim order dated 25 April 2014, the operation of the circular was st....
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.... 2016- 17 Rs.3,32,135/- Rs.99,640/- Rs.92,665/- Rs. 1,92,305/- 3952/Mum/2026 2016- 17 Rs.6,19,517/- Rs.1,85,855/- Rs. 1,19,877/- Rs.3,05,732/- 3840/Mum/2026 2016- 17 Rs.3,08,046/- Rs.92,414/- Rs.78,556/- Rs. 1,70,970/- 2628/Mum/2026 2016- 17 Rs.2,57,672/- Rs.77,302/- Rs.54,111/- Rs. 1,31,413/- 2440/Mum/2026 2017- 18 Rs.9,78,369/- Rs.2,93,511/- Rs.2,32,497/- Rs.5,26,008/- 4000/Mum/2026 2017- 18 Rs. 1,76,686/- Rs.53,006/- Rs.46,645/- Rs.99,651/- 3953/Mum/2026 2017- 18 Rs.41,65,507.66/-, rounded to Rs.41,65,508/- Rs. 12,49,652/- Rs.11,37,014/- Rs.23,86,666/- 2900/Mum/2026 2017- 18 Rs.3,99,550/- Rs.1,19,865/- Rs.1,07,918/- Rs.2,27,783/- 2629/Mum/2026 2017- 18 Rs.5,66,071/- Rs.1,69,821/- Rs.1,57,934/- Rs.3,27,755/- 14. Aggrieved by the orders passed under sections 201(1) and 201(1A), the assessee preferred appeals before the learned CIT(A). In the appellate proceedings, the assessee reiterated that the reimbursement had been granted only in respect of a designated place situated in India and that the admissible exemption was re....
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....on, the learned CIT(A) directed that a flat rate of 30 per cent should not be mechanically applied. The assessee was directed to furnish the computation of income and the applicable tax rate in respect of each employee, and the Assessing Officer was directed to rectify the orders and reduce any excess demand. Recovery of the demand was also directed to remain stayed until vacation of the stay granted by the Hon'ble Supreme Court. 21. Subject to these directions, all the grounds raised by the assessee were dismissed and the appeals were formally dismissed. 22. Accordingly, the assessee is in further appeal before us. The assessee has raised eight substantially identical grounds in all the appeals. The grounds filed in ITA No. 2440/Mum/2026 for Assessment Year 2017-18 are treated as representative and are reproduced as under: 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 Appellan....
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....s 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. 9. 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. 23. The grounds in the remaining appeals a....
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....is confined to whether the assessee-bank could be treated as an assessee in default under sections 201(1) and 201(1A) in respect of payments made during the period when the interim directions of the Hon'ble Madras High Court dated 16 February 2015 were operating. 29. We find that an identical issue has been considered by the Co-ordinate Bench in the assessee's own case in ITA No. 1832/Mum/2026 and connected appeals, order dated 30 June 2026. The relevant findings of the Co-ordinate Bench are reproduced below: "6. Heard rival contentions and perused the orders of the authorities below. We observe that an identical issue came up for consideration before various Benches of the Tribunal, including the Coordinate Bench of Mumbai in the case of State Bank of India vs. ACIT in ITAs No.2886 and 2887/Mum/2024. The Tribunal, vide order dated 30.05.2025, held that the assessee cannot be treated as an assessee-in-default since the directions issued by the Hon'ble Madras High Court on 16.02.2015 were binding on the assessee during the period under consideration. While holding so, the Coordinate Bench observed as under: "8. We have heard the rival submissions and....
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....;ble High Court of Madras, was under an obligation not to deduct tax at source and therefore, the assessee could not be held to be assessee-in-default for non-deduction of tax at source on impugned LFC payments. We order so. The impugned demand as raised against the assessee stand deleted." 9. As the facts in the present case are identical, respectfully following the above decision of the coordinate bench, we hereby hold that the assessee cannot be treated as 'assessee in default', as directions of the Hon'ble High Court of Madras issued vide order dated 16.02.2015 were binding on the assessee during the period under consideration. Accordingly, the demand raised by Ld. AO against the assessee u/s 201(1)/201(A) is without any justification and is hereby deleted. Accordingly, the appeal of the assessee is allowed." 7. The facts being identical in the present case, respectfully following the above decision of the Coordinate Bench, we hold that the assessee is not in default within the meaning of the provisions of section 201/201(1A), and accordingly, the order passed by the Assessing Officer u/ s 201/201(1A) is hereby quashed. 8. In the result, t....