O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

Both appeals have been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), ADDL/JCIT(A)-2, Siliguri vide orders dated 22.01.2026 & 12.01.2026 passed for A.Y. 2016-17 & 2017-18. Since common facts and issues for consideration are involved for both the appeals before us, both the appeals are being disposed by way of a common order.

The assessee has taken the following grounds of appeal:

ITA No. 1011/Ahd/2026 (A.Y. 2016-17)

“In our cases assessing officer has disallowed exemption u/s.10(5) of Income Tax Act, on the base of differences in interpretation of law and treated us as assessee in default and passed order against us u/s. 201(1) and 201(1A) of the Income Tax Act and we filed appeal against said order before CIT (Appeals), which is dismissed and order was issued u/s.250 of the Income Tax Act.

The Kerala High Court has held in a recent judgment that State Bank of India (SBI) cannot be treated as an “Assessee in Default” under section 201 of the Income Tax act for not deducting Tax at Source (TDS) on Leave Travel Concession (LTC) payments, as it was bound by an interim order which prohibited such deduction. The copy of said order is attached herewith.

Therefore against said order u/s. 250 and u/s. 201(1) and 201(1A), we prefer to file appeal before ITAT and furnished facts of the case along with said appeal along with relevant documentary evidences and we demand the withdrawal of the same from your honour by allowing our appeal on the basis of grounds and evidences furnished by us.”

ITA No. 1044/Ahd/2026 (A.Y. 2017-18)

“In our cases assessing officer has disallowed exemption u/s.10(5) of Income Tax Act, on the base of differences in interpretation of law and treated us as assessee in default and passed order against us u/s. 201(1) and 201(1A) of the Income Tax Act and we filed appeal against said order before CIT (Appeals), which is dismissed and order was issued u/s.250 of the Income Tax Act.

The Kerala High Court has held in a recent judgment that State Bank of India (SBI) cannot be treated as an “Assessee in Default” under section 201 of the Income Tax act for not deducting Tax at Source (TDS) on Leave Travel Concession (LTC) payments, as it was bound by an interim order which prohibited such deduction. The copy of said order is attached herewith.

Therefore against said order u/s. 250 and u/s. 201(1) and 201(1A), we prefer to file appeal before ITAT and furnished facts of the case along with said appeal along with relevant documentary evidences and we demand the withdrawal of the same from your honour by allowing our appeal on the basis of grounds and evidences furnished by us.”

The brief facts of the case are that the assessee, State Bank of India Currency Administration Cell, Gandhinagar, was subjected to proceedings under section 201(1) and 201(1A) of the Income-tax Act, 1961 ("the Act") the assessee on the ground that it had failed to deduct tax at source under section 192 of the Act on Leave Fare Concession/Leave Travel Concession (LFC/LTC) granted to certain employees who had undertaken journeys involving a foreign leg during the financial year relevant to Assessment Year 2016-17. During the course of assessment proceedings, the Assessing Officer observed that exemption under section 10(5) of the Act read with Rule 2B of the Income Tax Rules is available only in respect of travel within India and once the employee undertakes travel involving a foreign destination, the exemption ceases to apply. The Assessing Officer relied upon the judgment of the Hon’ble Supreme Court in Civil Appeal No. 8181 of 2022 dated 04.11.2022 in the case of State Bank of India v. Assistant Commissioner of Income Tax reported in [2022] 144 taxmann.com 131 (SC), wherein the Hon’ble Apex Court held that LTC exemption is restricted only to travel from one place in India to another place in India and the moment th