Karnataka High Court
State Bank Of India vs The Assistant Commissioner on 17 December, 2021
Bench: S.Sujatha, Ravi V Hosmani
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF DECEMBER, 2021
PRESENT
THE HON'BLE MRS.JUSTICE S.SUJATHA
AND
THE HON'BLE MR. JUSTICE RAVI V. HOSMANI
I.T.A.No.663/2018 c/w I.T.A.No.642/2018,
I.T.A.No.644/2018, I.T.A.No.646/2018,
I.T.A.No.647/2018, I.T.A.No.648/2018,
I.T.A.No.649/2018, I.T.A.No.650/2018,
I.T.A.No.652/2018, I.T.A.No.666/2018,
I.T.A.No.667/2018, I.T.A.No.669/2018,
I.T.A.No.670/2018, I.T.A.No.654/2018,
I.T.A.No.662/2018, I.T.A.No.664/2018,
I.T.A.No.665/2018, I.T.A.No.671/2018,
I.T.A.No.766/2018, I.T.A.No.768/2018,
I.T.A.No.769/2018 & I.T.A.No.770/2018
IN I.T.A.No.663/2018:
BETWEEN :
STATE BANK OF INDIA
KATRIGUPPE BRANCH
NO.78/1, R.K.REGENCY
KATRIGUPPE MAIN ROAD
BENGALURU-560085
REP BY ITS CHIEF MANAGER,
Mr. PRINCE BHARATHAN,
S/O Mr. K.BHARATHAN
AGED ABOUT 59 YEARS,
PAN NO. AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
-2-
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1408/BANG/2017, FOR
THE ASSESSMENT YEAR 2013-2014 PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1408/BANG/2017 FOR THE ASSESSMENT YEARS
2013-2014.
IN I.T.A.No.642/2018:
BETWEEN :
STATE BANK OF INDIA
RAJARAJESWARI BRANCH,
IDEAL HOME TOWNSHIP,
BENGALURU - 560 098,
REP BY ITS CHIEF MANAGER,
SRI UMESH ADKI,
S/O SRI BASAVARAJAADKI.
AGED ABOUT 46 YEARS,
PAN NO: AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
-3-
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1395 &
1403/BANG/2017, FOR THE ASSESSMENT YEAR 2011-2012 &
2012-2013, PRAYING TO (A) FORMULATE THE SUBSTANTIAL
QUESTIONS OF LAW STATED ABOVE; (B) ALLOW THE APPEAL
AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE
TRIBUNAL DATED 06.04.2018 IN SO FAR IT PERTAINS TO THE
APPELLANT'S APPEAL IN ITA NOS.1395 & 1403/BANG/2017 FOR
THE ASSESSMENT YEARS 2011-2012 & 2012-2013.
IN I.T.A.No.644/2018:
BETWEEN :
STATE BANK OF INDIA
FOCAL POINT LINK BRANCH,
NO.65, STATE BANK ROAD,
BENGALURU - 560 001,
REP BY ITS CHIEF MANAGER,
SRI RANGASWAMY K.,
S/O SRI H.K.KAMALAPPA,
AGED ABOUT 47 YEARS,
PAN NO: AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
-4-
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1396 &
1397/BANG/2017, FOR THE ASSESSMENT YEAR 2011-2012 &
2012-2013, PRAYING TO (A) FORMULATE THE SUBSTANTIAL
QUESTIONS OF LAW STATED ABOVE; (B) ALLOW THE APPEAL
AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE
TRIBUNAL DATED 06.04.2018 IN SO FAR IT PERTAINS TO THE
APPELLANT'S APPEAL IN ITA NOS.1396 & 1397/BANG/2017 FOR
THE ASSESSMENT YEARS 2011-2012 & 2012-2013.
IN I.T.A.No.646/2018:
BETWEEN :
STATE BANK OF INDIA
SPECIALIZED AGRI COMMERCIAL BRANCH,
NO.65, ST.MARK'S ROAD,
BENGALURU-560001
REP BY ITS CHIEF MANAGER,
SRI A.SUBRAMANYA BHAT,
S/O SRI A.PADMANABHA BHAT.
AGED ABOUT 52 YEARS,
PAN: BLRS37784F ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1398/BANG/2017, FOR
THE ASSESSMENT YEAR 2012-2013, PRAYING TO (A)
-5-
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1398/BANG/2017 FOR THE ASSESSMENT YEARS
2012-2013.
IN I.T.A.No.647/2018:
BETWEEN :
STATE BANK OF INDIA
BANASHANKARI 2ND STAGE,
NO.422, 9TH MAIN,
BENGALURU-560 070,
REP BY ITS BRANCH MANAGER,
Mrs. SOUJANYA M.,
D/O SRI H.MAHADEVASWAMY.
AGED ABOUT 30 YEARS,
PAN NO AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1399/BANG/2017, FOR
THE ASSESSMENT YEAR 2012-2013, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
-6-
NO.1399/BANG/2017 FOR THE ASSESSMENT YEARS
2012-2013.
IN I.T.A.No.648/2018:
BETWEEN :
STATE BANK OF INDIA
BANGALORE CITY BRANCH,
NO.22, P.B. NO.651, J.C.ROAD,
BENGALURU-560 002,
REP BY ITS CHIEF MANAGER,
Mrs. MUSHTARI A. SHAH,
D/O ABDUL SHUKUR SHAH
AGED ABOUT 57 YEARS,
PAN No.AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1400/BANG/2017, FOR
THE ASSESSMENT YEAR 2012-2013, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1400/BANG/2017 FOR THE ASSESSMENT YEARS
2012-2013.
-7-
IN I.T.A.No.649/2018:
BETWEEN :
STATE BANK OF INDIA
BIDADI BRANCH, G.R.S. COMPLEX,
MYSORE ROAD, BIDADI,
NOW AT 55 TOWERS, EGLETON ROAD,
B.M.ROAD, BENGALURU - 562 109,
REP BY ITS BRANCH MANAGER,
Mrs. SWETA TOPNO
AGED ABOUT 33 YEARS,
D/O SAGAN TOPNO
PAN NO: AAACS8577K. ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1401/BANG/2017, FOR
THE ASSESSMENT YEAR 2012-2013, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1401/BANG/2017 FOR THE ASSESSMENT YEARS
2012-2013.
IN I.T.A.No.650/2018:
BETWEEN :
STATE BANK OF INDIA
-8-
CENTRALIZED PENSION PROCESSING CENTRE,
NO.12/13, LAKSHMANAYYA LAYOUT,
2ND FLOOR, GANGANAGAR,
BENGALURU-560024
REP BY ITS ASSISTANT GENERAL MANAGER,
SRI NAGESH B.,
S/O SRI M.K.BALASUBRAMANIAM,
AGED ABOUT 58 YEARS,
PAN No.AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1402 &
1412/BANG/2017, FOR THE ASSESSMENT YEAR 2012-2013 &
2013-2014, PRAYING TO (A) FORMULATE THE SUBSTANTIAL
QUESTIONS OF LAW STATED ABOVE; (B) ALLOW THE APPEAL
AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE
TRIBUNAL DATED 06.04.2018 IN SO FAR IT PERTAINS TO THE
APPELLANT'S APPEAL IN ITA NOS.1402 & 1412/BANG/2017 FOR
THE ASSESSMENT YEARS 2012-2013 & 2013-2014.
IN I.T.A.No.652/2018:
BETWEEN :
STATE BANK OF INDIA
LIABILITY CENTRALIZED PROCESSING CENTRE,
PRAGATHI MAHALAKSHMI,
NO.62, 1ST MAIN, 3RD CROSS,
YESHWANTHPURA INDUSTRIAL SUBURB,
-9-
BENGALURU-560 022,
REP BY ITS ASSISTANT GENERAL MANAGER,
SRI V.NANJUNDA MURTHY,
S/O SRI VEERABHADRAPPA.
AGED ABOUT 56 YEARS,
PAN: AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1406 &
1407/BANG/2017, FOR THE ASSESSMENT YEAR 2012-2013 &
2013-2014, PRAYING TO (A) FORMULATE THE SUBSTANTIAL
QUESTIONS OF LAW STATED ABOVE; (B) ALLOW THE APPEAL
AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE
TRIBUNAL DATED 06.04.2018 IN SO FAR IT PERTAINS TO THE
APPELLANT'S APPEAL IN ITA NOS.1406 & 1407/BANG/2017 FOR
THE ASSESSMENT YEARS 2012-2013 & 2013-2014.
IN I.T.A.No.666/2018:
BETWEEN :
STATE BANK OF INDIA
INDIRANAGAR BRANCH
NO.2987, 12TH MAIN
HAL 2ND STAGE, INDIRANAGAR,
BENGALURU-560008
REP BY ITS CHIEF MANAGER,
SRI S.K.ANAND,
S/O SRI ASHOKANATH
- 10 -
AGED ABOUT 44 YEARS,
PAN NO. AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1411/BANG/2017, FOR
THE ASSESSMENT YEAR 2013-2014, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1411/BANG/2017 FOR THE ASSESSMENT YEARS
2013-2014.
IN I.T.A.No.667/2018:
BETWEEN :
STATE BANK OF INDIA
INDUSTRIAL FINANCE BRANCH
NO.16, RESIDENCY ROAD
BENGALURU-560025
REP BY ITS AGM & COO,
SRI GANESH BHAT,
S/O SRI RAMACHANDRA BHAT
AGED ABOUT 56 YEARS,
PAN No.AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
- 11 -
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1424 &
1425/BANG/2017, FOR THE ASSESSMENT YEAR 2011-2012 &
2012-2013, PRAYING TO (A) FORMULATE THE SUBSTANTIAL
QUESTIONS OF LAW STATED ABOVE; (B) ALLOW THE APPEAL
AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE
TRIBUNAL DATED 06.04.2018 IN SO FAR IT PERTAINS TO THE
APPELLANT'S APPEAL IN ITA NOS.1424 & 1425/BANG/2017 FOR
THE ASSESSMENT YEARS 2011-2012 & 2012-2013.
IN I.T.A.No.669/2018:
BETWEEN :
STATE BANK OF INDIA
JIGANI BRANCH, NO.47, AKN ARCADE
JIGANI INDUSTRIAL AREA,
ANEKAL TALUK, BENGALURU-560105
REP BY ITS BRANCH MANAGER
Mrs. ALKA SINGH,
W/O Mr. VIVEK SAHU
AGED ABOUT 33 YEARS,
PAN No.AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
- 12 -
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1426/BANG/2017, FOR
THE ASSESSMENT YEAR 2011-2012, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1426/BANG/2017 FOR THE ASSESSMENT YEARS
2011-2012.
IN I.T.A.No.670/2018:
BETWEEN :
STATE BANK OF INDIA
RAMANAGARAM BRANCH
MADHU COMPLEX
BANGALORE-MYSORE ROAD,
RAMANAGARA-562159
REP BY ITS MANAGER,
Mr. LOUIS ROSARIO J.,
S/O Mr. JACOB K.,
AGED ABOUT 46 YEARS
PAN NO. AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
- 13 -
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1456/BANG/2017, FOR
THE ASSESSMENT YEAR 2011-2012, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1456/BANG/2017 FOR THE ASSESSMENT YEARS
2011-2012.
IN I.T.A.No.654/2018:
BETWEEN :
STATE BANK OF INDIA
GUBBI BRANCH, GUBBI TALUK,
TUMKUR DISTRICT-572 216,
KARNATAKA,
REP BY ITS MANAGER,
SRI N.JANARDHAN,
S/O SRI H.N.NANJUNDA SWAMY
AGED ABOUT 56 YEARS,
PAN NO.AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1458/BANG/2017, FOR
THE ASSESSMENT YEAR 2013-2014, PRAYING TO (A)
- 14 -
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1458/BANG/2017 FOR THE ASSESSMENT YEARS
2013-2014.
IN I.T.A.No.662/2018:
BETWEEN :
STATE BANK OF INDIA
KANAKAPURA BRANCH,
B.G.COMPLEX, A.V.R.ROAD
KANAKAPURA-562117
REP BY ITS MANAGER,
SRI ABHINAV GARG
S/O SRI PARMOD KUMAR
AGED ABOUT 33 YEARS,
PAN NO. AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1405/BANG/2017, FOR
THE ASSESSMENT YEAR 2012-2013, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1405/BANG/2017 FOR THE ASSESSMENT YEARS
2012-2013.
- 15 -
IN I.T.A.No.664/2018:
BETWEEN :
STATE BANK OF INDIA
RACE COURSE ROAD BRANCH
NO.24/1, TRADE CENTRE,
BENGALURU-560001
REP BY ITS CHIEF MANAGER
SRI SATHISH M. KULKARNI
S/O SRI MALHARAO KULAKARNI
AGED ABOUT 54 YEARS,
PAN NO. AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1409/BANG/2017, FOR
THE ASSESSMENT YEAR 2013-2014, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1409/BANG/2017 FOR THE ASSESSMENT YEARS
2013-2014.
IN I.T.A.No.665/2018:
BETWEEN :
STATE BANK OF INDIA
VIJAYANAGAR BRANCH,
NO.2, 5TH MAIN, CHNCS
1ST LAYOUT, NEAR BDA COMPLEX
- 16 -
GOVINDAJ NAGAR, BENGALURU-560040
REP BY ITS BRANCH MANAGER
SRI MURALI KRISHNA S/O SRI V.G.VIJAYAN
AGED ABOUT 28 YEARS,
PAN NO. AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SRI MALLAHARAO K., ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1410/BANG/2017, FOR
THE ASSESSMENT YEAR 2013-2014, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1410/BANG/2017 FOR THE ASSESSMENT YEARS
2013-2014.
IN I.T.A.No.671/2018:
BETWEEN :
STATE BANK OF INDIA
STRESSTED ASSETS MANAGEMENT BRANCH,
RESIDENCY PLAZA, 4TH FLOOR,
NO.61, RESIDENCY ROAD, BENGALURU-560025
REP BY ITS DEPUTY GENERAL MANAGER
Mr. SHAFIULLAKHAN
S/O Mr. ABDUL KARIM KHAN
AGED ABOUT 53 YEARS,
PAN NO. AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SMT.JINITA CHATTERJEE, ADV.)
- 17 -
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 06.04.2018 PASSED IN ITA NO.1457/BANG/2017, FOR
THE ASSESSMENT YEAR 2011-2012, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 06.04.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
NO.1457/BANG/2017 FOR THE ASSESSMENT YEARS
2011-2012.
IN I.T.A.No.766/2018:
BETWEEN :
STATE BANK OF INDIA
CENTRALIZED CLEARING PROCESSING CENTRE,
1ST FLOOR, VASAVI COMPLEX,
NO.17, ST.MARK'S ROAD,
BENGALURU-560001
PAN:AAACS8577K,
REP BY ITS ASST. GENERAL MANAGER,
SRI RAMANUJA KULKARNI,
S/O SRI GURUNATH,
AGED ABOUT 56 YEARS ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SRI MALLAHARAO K., ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
- 18 -
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 15.06.2018 PASSED IN ITA NO.1310 &
1312/BANG/2017, FOR THE ASSESSMENT YEAR 2012-2013 &
2013-2014, PRAYING TO (A) FORMULATE THE SUBSTANTIAL
QUESTIONS OF LAW STATED ABOVE; (B) ALLOW THE APPEAL
AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE
TRIBUNAL DATED 15.06.2018 IN SO FAR IT PERTAINS TO THE
APPELLANT'S APPEAL IN ITA Nos.1310 & 1312/BANG/2017 FOR
THE ASSESSMENT YEARS 2012-2013 & 2013-2014.
IN I.T.A.No.768/2018:
BETWEEN :
STATE BANK OF INDIA
HR SECTION UNIT BRANCH
1ST FLOOR, KANAKA'S PRIDE
OPP. RAMAKRISHNA ASHRAM
13/1, BULL TEMPLE ROAD,
BASAVANAGUDI, BENGALURU-4
PAN:AAACS8577K
PRESENTLY AT AO1, 1ST FLOOR
MYSORE BANK BUILDING
K.G.ROAD, BENGALURU-560 009
REP BY ITS CHIEF MANAGER
SRI JANARDHAN M. GODKHINDI
S/O SRI MALHAR RAO
AGED ABOUT 54 YEARS ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SRI MALLAHARAO K., ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
- 19 -
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 15.06.2018 PASSED IN ITA NO.1311/BANG/2017, FOR
THE ASSESSMENT YEAR 2012-2013, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 15.06.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
No.1311/BANG/2017 FOR THE ASSESSMENT YEARS
2012-2013.
IN I.T.A.No.769/2018:
BETWEEN :
STATE BANK OF INDIA
RACPC-III, BANASWADI
"MARUTHI MANSION"
NO.7M-422, 80 FEET ROAD,
KALYAN NAGAR, BENGALURU-560 043
PAN:AACS8577K
REP BY ITS ASST. GENERAL MANAGER
SRI SANJAY SINHA
S/O SRI SACHIDANANDA SINHA
AGED ABOUT 56 YEARS ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SRI MALLAHARAO K., ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 15.06.2018 PASSED IN ITA NO.1313/BANG/2017, FOR
THE ASSESSMENT YEAR 2013-2014, VIDE ANNEXURE-A,
PRAYING TO (A) FORMULATE THE SUBSTANTIAL QUESTIONS
OF LAW STATED ABOVE; (B) ALLOW THE APPEAL AND SET-
- 20 -
ASIDE THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL
DATED 15.06.2018 IN SO FAR IT PERTAINS TO THE
APPELLANT'S APPEAL IN ITA No.1313/BANG/2017 FOR THE
ASSESSMENT YEARS 2013-2014.
IN I.T.A.No.770/2018:
BETWEEN :
STATE BANK OF INDIA
SPECIALISED HOUSING FINANCE BRANCH
NO.1154, 2ND FLOOR, 26TH MAIN
IV T BLOCK, JAYANAGAR
BENGALURU-560 041
REP BY ITS ASST. GENERAL MANAGER
SRI E.SHRISHAKESHAVA
S/O SRI E.VENKATRAMANA UPADHYAYA
AGED ABOUT 56 YEARS,
PAN NO: AAACS8577K ...APPELLANT
(BY SRI S.PARTHASARATHI, ADV. A/W
SRI MALLAHARAO K., ADV.)
AND :
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (TDS),
CIRCLE-18(2), TDS CIRCLE-3(1),
NO.59, HMT BHAVAN, BELLARY ROAD,
BENGALURU-560 032. ...RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION
260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER
DATED 15.06.2018 PASSED IN ITA NO.1314/BANG/2017, FOR
THE ASSESSMENT YEAR 2013-2014, PRAYING TO (A)
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER
OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 15.06.2018
IN SO FAR IT PERTAINS TO THE APPELLANT'S APPEAL IN ITA
No.1314/BANG/2017 FOR THE ASSESSMENT YEARS
2013-2014.
- 21 -
THESE APPEALS HAVING BEEN HEARD AND RESERVED,
COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY,
S. SUJATHA, J., DELIVERED THE FOLLOWING:
JUDGMENT
Since common and akin issues are involved in
these appeals, they are taken up together, heard and
disposed of by this common judgment.
2. These appeals are filed by the assesse -
State Bank of India [respective branches] under Section
260A of the Income Tax Act, 1961 ('Act' for short)
challenging the common orders dated 06.04.2018 and
15.06.2018 passed by the Income Tax Appellate
Tribunal, 'C' Bench, Bengaluru ('Tribunal' for short).
3. The appeals were admitted by this Court to
consider the following substantial questions of law:-
"1. Whether the Tribunal was justified in
upholding the levy of tax under Section 201(1)
and interest under Section 201(1A) of the Act as
determined by the TDS authority?
- 22 -
2. Whether denial of exemption under
Section 10(5) of the IT Act, 1961 read with Rule
2B of the IT Rules, 1962 of reimbursement of
leave travel expenses as claimed by the employee
of the Appellant was justifiable?
3. Whether the Tribunal was justified in
holding that in the light of the provisions of
Section 10(5) of the IT Act, 1961 read with Rule
2B of the IT Rules, 1962 when the employee has
undertaken circuitous route which included
foreign leg, the exemption is totally denied
without considering the expenditure involved by
the shortest route from the place of departure to
the place of destination when both the places are
within India?"
4. The appellant - Bank provides benefit of
leave travel concession ('LTC' for short) to its employees
and while deducting TDS from the salary of the
employees, LTC was considered exempted under Section
10(5) of the Act read with Rule 2B of the Income Tax
Rules, 1962 ('Rules' for short).
- 23 -
5. A survey under Section 133A of the Act was
conducted in the business premises of the appellant's
Head Office on 26.12.2013 and it was noticed that the
appellant - deductor has given exemption under Section
10(5) of the Act towards reimbursement of LTC/Leave
Fare Concession [LFC] claim of the employees for travel
outside India (foreign travel) and travel by long
circuitous route to the destination. It was also noticed
that the same practice has been followed by all the
branches of State Bank of India (SBI). Hence,
proceedings under Sections 201(1) and 201(1A) of the
Act was initiated by issuing show-cause notices to
which the appellant submitted reply contending that
travel concession or assistance was given to the
employees only relating to proceeding on leave to any
place in India and where the journey is performed by air
to the extent of amount not exceeding the economy air
fare of Air India (National Carrier) by shortest route to
the destination inter alia contending that there is no
- 24 -
prohibition under the Act and Rules to reimburse air
economy fare of the National Carrier/rail and the
journey performed by any mode of transport albeit the
employee choses the circuitous route with the foreign
leg. The assessing officer, considering the reply vis-à-vis
the provisions of the Act, rejected the explanation
offered by the appellant - assessee and considered the
appellant - deductor as "assessee in default" under
Section 201 of the Act for making short deduction under
Section 192 of the Act and held to be liable to pay the
defaulted amount.
6. Being aggrieved, the assessee preferred
appeals before the First Appellate Authority which came
to be dismissed. On further appeals before the Tribunal,
the Tribunal rejected the same. Being aggrieved, the
assessee - Bank has filed these appeals for different
assessment years.
- 25 -
7. Learned counsel for the appellant - assessee
submitted that the explanation offered by the assessee
has not been properly appreciated by the authorities as
well as the Tribunal. The Tribunal without considering
and addressing the arguments of the appellant merely
following its own judgment in the case of Syndicate
Bank V/s. Assistant Commissioner of Income Tax
[TDS] [(2017) 80 taxmann.com 179 (Bang. Trib)],
which in turn followed the judgment of the ITAT,
Lucknow Bench in the case of State Bank of India V/s.
Deputy Commissioner of Income-tax [TDS], Kanpur
[(2016) 158 ITD 194 (Luck-Trib)], dismissed the
appeals. The fact that the employees departed from a
place in India and ended up his journey in a place in
India should have been considered and atleast the cost
for the shortage route incurred by the employee should
have been considered for exemption under Section 10(5)
of the Act and the appellant should have been directed
to obtain the details to furnish to the Department to
- 26 -
collect short levy, if any. The authorities and the
Tribunal ought to have appreciated that invariably
reimbursement should only be on the basis of the
norms accepted by the banks i.e., the circular issued by
the Bankers' Association and the State Bank of India
Officers Service Rules, 1992. Thus, it was submitted
that there was no default on the part of the appellant to
fix the liability under Section 201(1) of the Act and
interest under Section 201(1A) of the Act. The appellant
was under a bonafide belief that the procedure and
norms adopted by the appellant - Bank supported by
the instructions issued by the Bankers' Association is
justifiable. The Tribunal has failed to consider these
aspects in a right perspective.
8. Learned counsel for the revenue justifying
the impugned orders submitted that the provisions of
Section 10(5) of the Act read with Rule 2B of the Rules
do not permit the employees to take circuitous route
- 27 -
which included foreign legs. The device adopted by the
appellant - Bank would defeat the purpose and object of
LTC/LFS provided to motivate the employees and also
to encourage tourism in India. The legislature has not
intended to allow the employees to travel abroad under
the garb of benefit of LTC. The employees have reached
the destination place in India after taking a foreign tour,
to which they are not entitled to claim reimbursement
as per Section 10(5) of the Act read with Rule 2B of the
Rules. The conditions prescribed under Section 10(5) of
the Act and Rule 2B of the Rules not being fulfilled, the
appellant - Bank cannot take shelter under the Banking
Rules and the circular instructions issued by the
Bankers Association, the plea of bonafide belief
advanced by the appellant is wholly unjustifiable.
9. We have carefully considered the rival
submissions of the learned counsel for the parties and
perused the material on record.
- 28 -
10. Section 10(5) of the Act reads thus:-
"10. Incomes not included in total
income.-- In computing the total income of a
previous year of any person, any income falling
within any of the following clauses shall not be
included--
(1) to (4). xxxxxx
(5) in the case of an individual, the value
of any travel concession or assistance received
by, or due to, him,--
(a) from his employer for himself and his
family, in connection with his proceeding on
leave to any place in India;
(b) from his employer or former employer
for himself and his family, in connection with
his proceeding to any place in India after
retirement from service or after the termination
of his service, subject to such conditions as
may be prescribed (including conditions as to
number of journeys and the amount which
shall be exempt per head) having regard to the
travel concession or assistance granted to the
employees of the Central Government:
- 29 -
Provided that the amount exempt under
this clause shall in no case exceed the amount
of expenses actually incurred for the purpose of
such travel."
11. Rule 2B of the Rules reads thus:-
"2B. (1) The amount exempted under
clause (5) of section 10 in respect of the value of
travel concession or assistance received by or
due to the individual from his employer or former
employer for himself and his family, in
connection with his proceeding,--
(a) on leave to any place in India;
(b) to any place in India after
retirement from service or after the termination of
his service,
shall be the amount actually incurred on the
performance of such travel subject to the
following conditions, namely :--
(i) where the journey is performed on
or after the 1st day of October, 1997, by air, an
amount not exceeding the air economy fare of
the national carrier by the shortest route to the
place of destination;
- 30 -
(ii) where places of origin of journey
and destination are connected by rail and the
journey is performed on or after the 1st day of
October, 1997, by any mode of transport other
than by air, an amount not exceeding the air-
conditioned first class rail fare by the shortest
route to the place of destination; and
(iii) where the places of origin of
journey and destination or part thereof are not
connected by rail and the journey is performed
on or after the 1st day of October, 1997,
between such places, the amount eligible for
exemption shall be :--
(A) where a recognised public transport
system exists, an amount not exceeding the 1st
class or deluxe class fare, as the case may be,
on such transport by the shortest route to the
place of destination; and
(B) where no recognised public
transport system exists, an amount equivalent to
the air-conditioned first class rail fare, for the
distance of the journey by the shortest route, as
if the journey had been performed by rail."
- 31 -
12. The letter of the Indian Banks' Association
dated 12.07.2012 relied on by the appellant - assessee
reads as under:
"Availment of LTC by Officers
eligible to travel by AIR
1. In terms of extant guidelines, the
mode and class by which an officer may avail
of Leave Travel Concession shall be the same
as the officer is normally entitled to travel on
transfer subject to other terms and conditions.
An Officer in Middle Management Grade may
travel by air [economy class] while availing
LTC where the distance is more than 1000
kms. An officer in Senior Management or Top
Management Grade may travel by air
[economy class].
2. One of our member banks has
referred to IBA, stating that in terms of old
norms/guidelines which deals with the
matters relating to LTC to officers who are
eligible to travel by air, they should travel by
Indian Airlines [now Air India] by economy
class on the routes where AIR India is
- 32 -
operating. However, if the journey is
undertaken by airlines other than Air India
where AIR India also operates, then
reimbursement shall be restricted to the
extent of fare charged by Air India to that
centre or the actual fare incurred, whichever
is less.
3. The Bank has solicited our views
as to whether it will be in order, if they
stipulate Air India's fare as the base fare for
arriving at the entitlement. Further, how to
arrive at the entitlement, if the Officer travels
by the round route to the destination.
4. The matter was considered by IBA
Standing Committee on HR at its meeting held
on 16.5.2012 and viewed as under:
4.1 Member Banks may be suitably
advised to the effect that they may reimburse
actual fare incurred for traveling by air of any
airlines if the journey is undertaken by direct
route in terms of the relevant provision of Officers'
Service Regulations, for availment of LTC.
- 33 -
4.2 In regard to travel by round route,
the reimbursement may be made not exceeding
maximum fare applicable for direct route to the
last point of journey destination connected by
air from the originating place of journey.
4.3 Banks may frame appropriate
guidelines under relevant provision of the
Service Regulation.
The Managing Committee at its meeting
held on 2nd July 2012 approved the above
recommendations of the IBA Standing
Committee on HR. "
13. Sample of Staff LFC bills paid, details placed
on record by the assessee would disclose thus:
Sl. Date Name Farthest Places Visited Entitlement as Eligible Amount Amount
No. Destinat per Notional Fare Amount-Rs. claimed- paid.
ion in Rs.
India
1. 17/05/2011 Ajit S Wagha Bangalore- Bangalore to Delhi 24700 221675/- 213575/-
[2011-2012] Khasnis Border Colombo, Kaula Delhi to Amritsar 10700
Lumpur - For 3 Members To 35400 x 2 x 3
Putrajaya- and Fro =212400
Genting 1175
Highlands- Taxi Fates Total-
Singapore- [Rs.575+Rs.600] 213575/-
Bangkok-
Pattaya-Delhi-
Amritsar-
Wagha Border
etc.,
2. 09/02/2013 Ramesh Katra Bangalore- Bangalore to Delhi 29000 271179/- 271179/-
[2012-2013] K Colombo-Hong Delhi to Jammu 19000
Upadhye Kong-Macau- For 3 Members To 48000 x 2 x 3
Bangkok- and Fro =288000/-
Pattaya-Delhi- Jammu to Katra - 2097/-
Jammu-Katra by Helicoptor Total-290097/-
- 34 -
etc.,
3 20/08/2013 TR Gulmarg Bangalore- Bangalore to Delhi 28500 188598/- 182570/-
[2013-2014] Ugalwat Colombo, Kaula New Delhi to 15700
Putrajaya- Srinagar to 45185 x 2 x 2
Genting Gulmarg - by =180740
Highland- Train-ACI Class - 1830
Singapore- for 2 Members To Total-182570/-
Bangkok- and Fro Taxi Fare
Pattaya-Delhi- at Bangalore &
Srinagar- Delhi
Gulmarg etc.,
14. One of the sample travel certificate of the
travel agency placed on record is extracted hereunder:
"TRAVEL CERTIFICATE
This is to certify that, SRI.Ajit Khasnis,
Manager, State Bank of India, No.65, Local
Head Office, St.Marks Road, Bangalore -
560001, has traveled along with his family
members in our package tour from 17-04-
2011 to 01-05-2011. The details of the tour
are as under:
Mode of Transport Farthest point Total Journey Charges
From Bangalore per Person
in India
By Flight, Bus, Train Wagha border Total Journey Charges
& Cab 2,980 kms Rs.73,500 x 3 =
Rs.2,20,500/-
Names of the Sex - Age Relationship
Participants
1. SRI.AJIT
KHASNIS M 51 Self
2. SMT.SANDHYA
KHASNIS F 40 Wife
3. MR.AMOL
KHASNIS M 13 Son
- 35 -
Received with thanks from, SRI.AJIT
KHASNIS, Manager, State Bank of India,
No.65,. Local Head Office, St. Marks Road,
Bangalore-560001, a sum of Rs.2,20,500/-
[Rupees Two Lakh twenty thousand five
hundred only] towards journey charges
excluding boarding & lodging for the package
tour referred above."
15. Day-to-day itinerary of the said tour reads
thus:
"Day to day itinerary of the Far East
Package tour operated From 17-04-2011 to
01-05-2011
• Bangalore - Colombo - Kuala Lumpur By Srilankan
Airways Flight
• Kuala Lumpur to Singapore By Benz Coach
• Singapore - Bangkok By Flight
• Bangkok to Pattaya by Benz Bus
• Bangkok - Colombo - Delhi By Air
• Delhi - Amritsar - Delhi By A/C Chair Car Train
• Delhi - Bangalore by Air
Bangalore - Colombo [17-04-2011 to 18-04-2011]
Colombo to Nigambo Colombo by Benz bus
Colombo to Malaysia [18-04-2011 to 21-04-2011]
Airport transfer, Kula Lumpur Tour, Genting Highland
Theme Park, Kuala Lumpur, Putrajaya Tour.
Singapore [21-04-2011 to 23-04-2011]
Jurong Bird Park, Sentosa Island Tour, Bam boat Station,
transfer to Singapore Airport.
Singapore - Bangkok [23-04-2011] by Flight
- 36 -
Pattaya [23-04-2011 to 25-04-2011]
Bangkok to Pattaya by Benz coach, Coral Island speed boat
Bangkok [25-04-2011 to 27-04-2011]
Nong Nooch village, Safari World, Airport transfer
Bangkok - Colombo by flight [27-04-2011]
Colombo - Delhi by flight [28-04-2011]
Delhi - Amritsar [28-04-2011 to 01-05-2011]
Delhi - Amritsar By A/C Chair Car Train
Amritsar - Wagha border - Amritsar by Cab [29-04-
2011 to 01-05-2011]
Amritsar - Delhi By A/C Chair Car Train
Delhi - Bangalore by Air [01-05-2011]
16. The receipt of the said travel agency
indicates that the amount of Rs.2,20,500/- only was
received towards journey charges/vehicle hired from
17.04.2011 to 01.05.2011 for Singapore-Malaysia-
Thailand-Delhi-Amritsar-Wagha Border, for three seats.
Thus, the package includes international travel as well
in a single itinerary. It is evident that in the case of
Indian Institute of Science V/s. The Dy.
Commissioner of Income Tax [TDS] [ITA
No.1589/Bang/2014], the Income Tax Appellate
Tribunal, "A" Bench, Bangalore, considering the plea of
the assessee inasmuch as the bonafide estimate of
employees' salary by valuing the perquisites in the form
- 37 -
of residential accommodation provided to the employees
by valuing the same as if employees were employees of
Central Government, accepted the same. The assessees'
obligation under Section 192 was held to be properly
discharged, quashing the proceedings under Section
201[1] and 201[1A] of the Act. Though this order of the
Tribunal was challenged by the Revenue in ITA
Nos.431/2015 and 89/2016, due to the modified
monetary limits for filing the appeals before the High
Courts in terms Circular No.3/2018 dated 11th July,
2018, the appeals were withdrawn with liberty to the
Revenue to revive the said appeals if it is found that the
matter falls within the exception carved out in Class-10
of the said Circular No.3/2018.
17. In the case of Central Food Technological
Research Institute V/s. The Income Tax Officer,
[TDS] [ITA No.486/2014, D.D. 14.07.2021], the Co-
ordinate Bench of this Court in the context of Rule 3 of
the Income Tax Rules, referring to the case of Indian
- 38 -
Institute of Bangalore supra, held that the assessee
had made a bonafide estimate of the employees salary to
value the perquisite in the form of residential
accommodation provided to the employees as if they are
the employees of the central Government, the same was
accepted and the proceedings under Sections 201 and
201[1A] of the Act have been quashed. Learned counsel
for the appellant has placed reliance on these
judgments to contend that it was based on a bonafide
reason and referring to the Indian Banks' Circular,
exemption was granted under Section 10[5] of the Act
read with Rule 2B of the Rules, as such, appellant
cannot be treated as a defaulter to pass an order under
Section 201 and 201[1A] of the Act. This argument
cannot be countenanced in the teeth of Section 10[5] of
the Act which contemplates that the value of any travel
concession or assistance received by, or due to him,
from his employer for himself and his family in
connection with this proceeding on leave to any place in
- 39 -
India shall be exempt having regard to the travel
concession and assistance granted to the employees.
This provision cannot be interpreted to allow the
employees of the Bank to claim LTC for travelling in a
circuitous route visiting foreign countries.
18. The intention of the Legislature under
Section 10[5] appears to be two fold. One is to provide
some relaxation/refreshment to an employee, who can
spend time with the family and gain knowledge about
the places of visit i.e., to motivate the employees in
discharging their regular duties efficiently with the
refreshed mind after tour. Secondly, to encourage the
tourism in India. Traveling abroad in the guise of
LTC/LFC could not entitle for the exemption under
Section 10[5] of the Act. The service conditions/circular
issued by the Indian Banks' Association is not a
statutory Circular and would not govern the
department. It would have been different altogether if
the employee has traveled to any place in India and
- 40 -
then abroad, for example, from Bengaluru to Delhi,
thereafter from Delhi to New York. In the instant cases,
it is not so. The employees have directly traveled abroad
and in the return journey, had visited the places in
India. The itinerary confirms the same.
19. The charges towards the said tour received
by the tour operator demonstrate that it is the
consolidated charges for the entire journey. In such
circumstances, in our considered view, the same cannot
be split up to avail the benefit of LTC/LFC by the
employees. The plea of bonafide belief put up by the
assessee placing reliance on the Circular issued by the
Indian Banks' Association is untenable since no
clarification from the department was sought by the
assessee on this aspect.
20. Section 192 of the Act reads thus:
"Salary.
192. (1) Any person responsible for
paying any income chargeable under the
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head "Salaries" shall, at the time of payment,
deduct income-tax on the amount payable at
the average rate of income-tax computed on
the basis of the rates in force for the
financial year in which the payment is
made, on the estimated income of the
assessee under this head for that financial
year."
This provision contemplates that any person
responsible for paying any income chargeable as
salaries shall at the time of payment, deduct income tax
at the rates in force on the estimated income of the
assessee.
21. It is beneficial to refer to the judgment of the
Hon'ble Apex Court in the case of Commissioner of
Income Tax, New Delhi V/s. Eli Lilly & Co. [India] [P]
Ltd., [(2009) 178 Taxman 505 (SC)], wherein the scope
of Sections 192 [1], 201[1], 201[1A], 271 and 273B has
been extensively considered. In paragraph 34, the
Hon'ble Apex Court has held thus:
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"34. A perusal of Section 201(1) and
Section 201(1A) shows that both these provisions
are without prejudice to each other. It means that
the provisions of both the sub-sections are to be
considered independently without affecting the
rights mentioned in either of the sub-sections.
Further, interest under Section 201(1A) is
compensatory measure for withholding the tax
which ought to have gone to the exchequer. The
levy of interest is mandatory and the absence of
liability for tax will not dilute the default. The
liability of deducting tax at source is in the nature
of a vicarious liability, which pre-supposes
existence of primary liability. The said liability is
a vicarious liability and the principal liability is of
the person who is taxable. A bare reading of
Section 201(1) shows that interest under Section
201(1A) read with Section 201(1) can only be
levied when a person is declared as an
assessee-in-default. For computation of interest
under Section 201(1A), there are three elements.
One is the quantum on which interest has to be
levied. Second is the rate at which interest has to
be charged. Third is the period for which interest
has to be charged. The rate of interest is provided
in the 1961 Act. The quantum on which interest
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has to be paid is indicated by Section 201 (1A)
itself. Sub-section (1A) specifies "on the amount of
such tax" which is mentioned in sub-section (1)
wherein, it is the amount of tax in respect of
which the assessee has been declared in default.
The object underlying Section 201(1) is to recover
the tax. In the case of short deduction, the object
is to recover the shortfall. As far as the period of
default is concerned, the period starts from the
date of deductibility till the date of actual
payment of tax. Therefore, the levy of interest has
to be restricted for the above stated period only. It
may be clarified that the date of payment by the
concerned employee can be treated as the date of
actual payment."
22. The liability under Sections 201[1] and
201[1A] would arise only when the assessee has been
declared as an assessee-in-default, the object of which
is to recover the tax. Tax compliance has to be made
strictly in terms of the Act, not on the advise/Circulars
of the Association. Tax being compulsorily payable, in
default interest is liable to be paid under Section
201[1A] which is compensatory in nature but that is not
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so in the case of penalty. The Hon'ble Apex Court in Eli
Lilly & Co., supra, has set aside the penalty order
made under Sections 271C read with 273B of the Act
directing the Assessing Authority to examine each case
to ascertain whether the employee-assessee [recipient]
has paid the tax due on, in case tax due on stands paid
off, then the Assessing Officer shall not proceed under
Section 201[1]. In cases where the tax has not been
paid, the Assessing Officer has been directed to proceed
under Section 201[1] of the Act. Similarly with respect
to Section 201[1A] of the Act, relief has been granted
only with respect to penalty proceedings. In the light of
this judgment, the shelter taken by the assessee under
the bonafide reason cannot be countenanced.
23. We have also perused the e-Circular referred
to, by the learned counsel for the assessee dated
03.03.2015, where the interim order of the Hon'ble
Madras High Court dated 16.02.2015 has been referred
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to. But in the present cases, journey was undertaken
prior to 16.02.2015.
24. In the judgment referred to by the learned
counsel for the appellant in the case of Commissioner
of Income-tax and Another V/s. Larsen and Toubro
Ltd., and Another [(2009) 313 ITR 1 (SC)], the
question that fell for determination was, whether the
assessee[s] was under statutory obligation under the
Income Tax Act, 1961, and/or the Rules to collect
evidence to show that its employee[s] had actually
utilized the amount[s] paid towards leave travel
concession[s]/conveyance allowance? In that context, it
was held that beneficiary of exemption under Section
10[5] is an individual employee. There is no Circular of
the Central Board of Direct Taxes [CBDT] requiring the
employer under Section 192 to collect and examine the
supporting evidence to the declaration to be submitted
by an employee[s]. With great respect, we are of the
considered view that this judgment would not come to
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the aid of the appellant to substantiate the arguments
advanced in the present case.
25. Having regard to Section 10[5] and Rule 2B,
it is clear that leave travel concession is available for an
employee to proceed on leave to any place in India
[destination] and thereafter return to the place of origin
in the shortest route but not with a foreign leg. Such an
amount to be allowed as concession cannot exceed the
air economy fair of the National carrier by the shortest
route to the destination in India. We are of the
considered view that no claim of exemption could be
made, out of the total ticket package spent on overseas
travel with part of the journey being within India by the
employee.
26. The bonafide belief pleaded by the appellant-
assessee is without any legal basis. Considering these
aspects, the authorities have rightly held that the
assessee as an 'assessee in default' under Section
201[1] of the Act.
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For the reasons aforesaid, we answer the
substantial questions of law against the assessee and in
favour of the Revenue.
Resultantly, appeals stand dismissed.
Sd/-
JUDGE
Sd/-
JUDGE
PMR/NC.
