IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.514/Agr/2024 (िनधा(cid:330)रणवष(cid:330) / Assessment Year: 2016-17)

State Bank of India CIT (Appeals)

बनाम/

59-61/4, SBI Region-5, Sanjay Place Agra Vs.

Agra – 282002 (cid:830)थायीलेखासं./जीआइआरसं./TAN No. AGRS-15497-G (अपीलाथ५/Appellant) : (ঋ(cid:529)थ५ / Respondent)

अपीलाथ५कीओरसे/ Appellant by : None ঋ(cid:529)थ५कीओरसे/Respondent by : Shri Shailendra Shrivastava – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 19-02-2025 घोषणाकीतारीख /Date of Pronouncement : 28-03-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)

1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 assails demand raised against the assessee u/s 201(1) / 201(1A) of the Act vide order dated 31-03-2023. The first appeal order has been passed by learned Addl. / Joint Commissioner of Income Tax (Appeals), Prayagraj [CIT(A)] on 30-09-2024. At the time of hearing, none appeared for assessee and accordingly, the appeal was heard with the able assistance of Ld. Sr. DR who pleaded for dismissal of the appeal in the light of decision of Hon’ble Apex Court in assessee’s own case.

2. Upon perusal of order passed u/s 201(1)/ 201(1A) by Ld. AO on 31- 03-2023, it could be seen that the assessee reimbursed LTC / LFC payments involving foreign LFC to two of its employees for Rs.7.06 Lacs without deduction of tax at source. The details of the employees have been tabulated at para 6.1 of the order. The Ld. AO held that the said payment was not exempt u/s 10(5) whereas the assessee stated that TDS was not deducted under bona-fide belief that no TDS was required to be deducted against such payments. The Hon’ble High Court of Madras passed an interim order in WP No. 11991/2014 on 16-02-2015 restraining the assessee bank not to deduct TDS on such reimbursements. However, going by the decision of Hon’ble Apex Court in assessee’s own case SBI vs. ACIT (CA No.8181 of 2022 dated 04- 11-2022; 144 Taxmann.com 131) holding that the assessee should have deducted TDS u/s 192(1), Ld. AO held the assessee to be assessee-in-default and raised a demand to Rs.4.05 Lacs for short- deduction of tax at source along with applicable interest. The Ld. CIT(A) confirmed the demand against which the assessee is in further appeal before us.

3. From the facts, it is quite clear that the impugned LFC payments involving foreign LFC are not exempted u/s 10(5) as per the final decision of Hon’ble Apex Court in assessee’s own case (supra). It has been held by Hon’ble Court that the when the assessee-bank claimed exemption towards leave travel concession (LTC) granted to its employees, since travel of said employees was not from one place in India to another place in India but involved a foreign leg, benefit of exemption under section 10(5) could not be granted to assessee. The Hon’ble Court further held that the obligation of deducting tax is distinct from payment of tax. The assessee cannot claim ignorance about the travel plans of its employees as during settlement of LTC Bills the complete facts would be available before the assessee about the details of their employees' travels. Therefore, it cannot be a case of bona fide mistake, as all the relevant facts were before the Assessee employer and he was therefore, fully in a position to calculate the 'estimated income' of its employees. The contention that there may be a bona fide mistake by the assessee-employer in calculating the 'estimated income' cannot be accepted since all the relevant documents and material were before the assessee- employer at the relevant point of time and the assessee employer therefore ought to have applied his mind and deducted tax at source as it was his statutory duty u/s 192(1) of the Act.

The issue thus attained finality in favor of the revenue.

4. At the same time, it could be seen that the impugned payments pertain to LFC granted by assessee bank for