IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER I.T.A. No.390 & 391/Lkw/2023 Assessment Year: 2013-14 & 14-15 State Bank of india, SMECCC- Vs. Income Tax Officer(TDS)-II, Code-5030, Zonal Office, Kanpur Nagar.

The Mall Road, Kanpur Nagar.

PAN:AAACS8577K (Appellant) (Respondent)

Appellant by None Respondent by Shri Sanjeev Krishna Sharma, Addl. CIT (D.R.)

O R D E R

PER BENCH:

These two appeals have been filed by the assessee against impugned appellate orders, each dated 13/10/2022 passed by learned Commissioner of Income Tax (Appeals) [“CIT(A)”] for short]. The grounds raised by the assessee are reproduced as under:

I.T.A. No.390/Lkw/2023 “1. That the Learned CIT (A) erred in not holding that the order under sections 201(1) and 201(1A) of the Income Tax Act, 1961 is barred by limitation and hence, void ab initio.

2. That the Learned CIT (A) erred in holding the appellant as assessee in default on account of non-deduction of tax at source in respect of Leave Fare Concession (LFC) provided by the appellant to its employees amounting to Rs.2,11,598/- in cases where LFC was paid by the shortest route for a journey where the designated place was in India but the same also involved some en-route foreign travel being undertaken by the employee.

3. That the Learned CIT (A) erred in failing to appreciate that the benefit of exemption under section 10(5) of the Income Tax Act, 1961 is available to the appellant's employees even in cases where the journey undertaken by an employee involves a foreign leg, but where the employee's designated place is in India and he actually visits the place as designated.

4. That the Learned CIT (A) erred in relying on the circular issued by the Central Board of Direct Taxes for the purpose of tax deduction on salary payments for the Financial Year- 2012-13.

5. That the Learned CIT (A) erred in failing to appreciate that the appellant provided exemption under section 10(5) of the Income Tax Act, 1961 only when the employee's designated place is in India and he actually visits the place as designated. Further, even in cases where the employee travels outside India during the course of his travel to a place in India, the exemption under section 10(5) is restricted for travel with in India. Further, all conditions under section

10(5) Of Income Tax Act, 1961 and Rules 2B are satisfied.

6. That the Learned CIT (A) erred in not appreciating that if at all the LFC payments involving a foreign leg are to be held as taxable, the employee is entitled for exemption under section 10(5) Of Income Tax Act, 1961 to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually visits the place designated.

7. That the Learned CIT (A) erred in failing to appreciate that the appellant was of the bona fide belief that it was not liable to deduct tax at source in respect of LFC provide to employees, and accordingly the appellant cannot be held to be an assessee in default within the meaning of section 201 and 201(1A) of Income Tax Act, 1961. Each one of the above grounds of appeal is without prejudice to the other.

8. Each one of the above grounds of appeal is without prejudice to the other.”

“1. That the Learned CIT (A) erred in not holding that the order under sections 201(1) and 201(1A) of the Income Tax Act, 1961 is barred by limitation and hence, void ab initio.

2. That the Learned CIT (A) erred in holding the appellant as assessee in default on account of non-deduction of tax at source in respect of Leave Fare Concession (LFC) provided by the appellant to its employees amounting to Rs.5,63,310/- in cases where LFC was paid by the shortest route for a journey where the designated place was in India but the same also involved some en-route foreign travel being undertaken by the employee.

3. That the Learned CIT (A) erred in failing to appreciate that the benefit of exemption u