BRANCH MANAGER STATE BANK OF INDIA, REGIONAL BUSINESS OFFICE, ADMINISTRETIVE OFFICE,KANPUR V. ACIT (TDS), KANPUR

ITA 490/LKW/2024

AI Insights

The case involves multiple appeals by the State Bank of India against penalties imposed for not deducting tax at source on reimbursements of LTC/LFC paid to employees for foreign travel. The Additional Commissioner of Income Tax (TDS) imposed these penalties, which were upheld by the Commissioner of Income Tax (Appeals). The bank contested these decisions, arguing that the penalties were unjust and that there was a reasonable cause for their failure to deduct the tax. However, the tribunal found no merit in the bank's arguments, noting that the bank had the necessary resources and knowledge to comply with the tax deduction requirements.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126716 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KRISHNA SHARMA
• Keywords: Reasonable cause; Bonafide belief; TDS; Non-deduction of tax
• Section: 250; 13; 273B

Judgement Text

"I.T.A. Nos.487 to 491/Lkw/2024 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.487 & 488/Lkw/2024 Assessment Year:2015-16 & 2016-17 State Bank of India, Overseas Branch, Civil Lines, Kanpur. PAN:KNPSO1627D Vs. Addl. CIT (TDS), Kanpur. (Appellant) (Respondent) I.T.A. No.489 to 491/Lkw/2024 Assessment Year:2015-16 to 2017-18 Branch Manager, State Bank of India, H. R. Section, Zonal Office, The Mall Road, Kanpur Nagar. PAN:KNPSO2318B Vs. Addl. CIT (TDS), Kanpur. (Appellant) (Respondent) O R D E R PER BENCH: (A) These five appeals have been filed by the assessee against impugned appellate orders, each dated 10/06/2025 passed by learned Commissioner of Income Tax (Appeals) [“CIT(A)”] for short]. The grounds raised by the assessee are reproduced as under: Appellant by None Respondent by Shri Sanjeev Krishna Sharma, Addl. CIT (D.R.) I.T.A. Nos.487 to 491/Lkw/2024 2 I.T.A. No.487/Lkw/2024 “1. That on the facts and circumstance of the case and in the law, the order passed u/s 250 r. w. s 271C of the Act dated 10/06/2024 dismissing the appeal filed by the Appellant and confirming the levy of penalty of Rs.1,04,380/- by the Ld. CIT(A), without giving any justifiable reasoning and ignoring the submissions made before the Ld. CIT (A) and without appreciating the facts of the case and judicial precedents, bad in law and is liable to be quashed. 2. That on the facts and in the circumstance of the case and in law, the Ld. CIT (A) failed to appreciate the fact that the order of penalty passed by the Ld. Additional Commissioner of Income Tax (TDS) dated 19-09-2023 U/s 271C of the Act is bad in law and void ab initio, since the penalty proceedings have been initiated after almost 7 years from the end of the financial year which cannot be considered reasonable time period for initiating proceedings as held by various authorities. 3. That on the facts and circumstance of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act 1961, disallowance of LTC/LTA under section 10(5) of the Act, without appreciating that no tax was deductible on the provisions created by the Appellant. 4. That on the facts and circumstances of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act, disallowance of LTC/LTA under section 10(5) of IT Act 1961, without appreciating that there was 'reasonable cause' for the said failure as per the provisions of Section 273B of the Act 1961. 5. That the grounds of appeal as pleaded before the Learned CIT (Appeal) are relied upon the appeal before the Hon'ble Member, IITAT. 6. That the Learned CIT (Appeal) has erred in law in rejecting the appeal arbitrarily and in utter disregard of the submission made before him. I.T.A. Nos.487 to 491/Lkw/2024 3 7. That the above grounds are independent and without prejudice to each other.” I.T.A. No.488/Lkw/2024 “1. That on the facts and circumstance of the case and in the law, the order passed u/s 250 r. w. s 271C of the Act dated 10/06/2024 dismissing the appeal filed by the Appellant and confirming the levy of penalty of Rs.1,/- by the Ld. CIT(A), without giving any justifiable reasoning and ignoring the submissions made before the Ld. CIT (A) and without appreciating the facts of the case and judicial precedents, bad in law and is liable to be quashed. 2. That on the facts and in the circumstance of the case and in law, the Ld. CIT (A) failed to appreciate the fact that the order of penalty passed by the Ld. Additional Commissioner of Income Tax (TDS) dated 19-09-2023 U/s 271C of the Act is bad in law and void ab initio, since the penalty proceedings have been initiated after almost 7 years from the end of the financial year which cannot be considered reasonable time period for initiating proceedings as held by various authorities. 3. That on the facts and circumstance of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act 1961, disallowance of LTC/LTA under section 10(5) of the Act, without appreciating that no tax was deductible on the provisions created by the Appellant. 4. That on the facts and circumstances of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act, disallowance of LTC/LTA under section 10(5) of IT Act 1961, without appreciating that there was 'reasonable cause' for the said failure as per the provisions of Section 273B of the Act 1961. 5. That the grounds of appeal as pleaded before the Learned CIT (Appeal) are relied upon the appeal before the Hon'ble Member, IITAT. I.T.A. Nos.487 to 491/Lkw/2024 4 6. That the Learned CIT (Appeal) has erred in law in rejecting the appeal arbitrarily and in utter disregard of the submission made before him. 7. That the above grounds are independent and without prejudice to each other.” I.T.A. No.489/Lkw/2024 1. That on the facts and circumstance of the case and in the law, the order passed u/s 250 r. w. s 271C of the Act dated 10/06/2024 dismissing the appeal filed by the Appellant and confirming the levy of penalty of Rs.1,46,775/- by the Ld. CIT(A), without giving any justifiable reasoning and ignoring the submissions made before the Ld. CIT (A) and without appreciating the facts of the case and judicial precedents, bad in law and is liable to be quashed. 2. That the order dated 25-05-2023 passed by the Additional Commissioner of Income Tax (TDS) imposing the penalty of Rs.1,46,775/- is bad in law for the reason that said order under section 271C of the IT Act 1961 dated 25-05-2023 vide DIN No- KNP/95/25-05-2023/00099 and said notice of demand u/s 156 of the IT Act 1961 dated 25-05-2023 vide DIN number:- KNP/95/25-05-2023/00099 has been issued with the same Document Identification Number (\"DIN\"), which is wrong and against as per Board Circular, which is mandatory in term of circular No.19 of 2019 dated 14-08-2019 issued by the Central Board of Direct Taxes (\"CBDT\"). 3. That on the facts and in the circumstance of the case and in law, the Ld. CIT (A) failed to appreciate the fact that the order of penalty passed by the Ld. Additional Commissioner of Income Tax (TDS) dated 25-05-2023 U/s 271C of the Act is bad in law and void ab initio, since the penalty proceedings have been initiated after almost 7 years from the end of the financial year which cannot be considered reasonable time period for initiating proceedings as held by various authorities. 4. That on the facts and circumstance of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act 1961, disallowance of LTC/LTA under section I.T.A. Nos.487 to 491/Lkw/2024 5 10(5) of the Act, without appreciating that no tax was deductible on the provisions created by the Appellant. 5. That on the facts and circumstances of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act, disallowance of LTC/LTA under section 10(5) of IT Act 1961, without appreciating that there was 'reasonable cause' for the said failure as per the provisions of Section 273B of the Act 1961. 6. That the grounds of appeal as pleaded before the Learned CIT(Appeal) are relied upon the appeal before the Hon'ble Member, ITAT. 7. That the Learned CIT (Appeal) has erred in law in rejecting the appeal arbitrarily and in utter disregard of the submission made before him. 8. That the above grounds are independent and without prejudice to each other.” I.T.A. No.490/Lkw/2024 1. That on the facts and circumstance of the case and in the law, the order passed u/s 250 r. w. s 271C of the Act dated 10/06/2024 dismissing the appeal filed by the Appellant and confirming the levy of penalty of Rs.3,47,845/- by the Ld. CIT(A), without giving any justifiable reasoning and ignoring the submissions made before the Ld. CIT (A) and without appreciating the facts of the case and judicial precedents, bad in law and is liable to be quashed. 2. That the order dated 25-05-2023 passed by the Additional Commissioner of Income Tax (TDS) imposing the penalty of Rs.3,47,845/- is bad in law for the reason that said order under section 271C of the IT Act 1961 dated 25-05-2023 vide DIN No- KNP/95/25-05-2023/100 and said notice of demand u/s 156 of the IT Act 1961 dated 25-05-2023 vide DIN number:- KNP/95/25-05-2023/100 has been issued with the same Document Identification Number (\"DIN\"), which is wrong and against as per Board Circular, which is mandatory in term of circular No.19 of 2019 dated 14-08-2019 issued by the Central Board of Direct Taxes (\"CBDT\"). I.T.A. Nos.487 to 491/Lkw/2024 6 3. That on the facts and in the circumstance of the case and in law, the Ld. CIT (A) failed to appreciate the fact that the order of penalty passed by the Ld. Additional Commissioner of Income Tax (TDS) dated 25-05-2023 U/s 271C of the Act is bad in law and void ab initio, since the penalty proceedings have been initiated after almost 7 years from the end of the financial year which cannot be considered reasonable time period for initiating proceedings as held by various authorities. 4. That on the facts and circumstance of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act 1961, disallowance of LTC/LTA under section 10(5) of the Act, without appreciating that no tax was deductible on the provisions created by the Appellant. 5. That on the facts and circumstances of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act, disallowance of LTC/LTA under section 10(5) of IT Act 1961, without appreciating that there was 'reasonable cause' for the said failure as per the provisions of Section 273B of the Act 1961. 6. That the grounds of appeal as pleaded before the Learned CIT(Appeal) are relied upon the appeal before the Hon'ble Member, ITAT. 7. That the Learned CIT (Appeal) has erred in law in rejecting the appeal arbitrarily and in utter disregard of the submission made before him. 8. That the above grounds are independent and without prejudice to each other.” I.T.A. No.491/Lkw/2024 1. That on the facts and circumstance of the case and in the law, the order passed u/s 250 r. w. s 271C of the Act dated 10/06/2024 dismissing the appeal filed by the Appellant and confirming the levy of penalty of Rs.1,46,775/- by the Ld. CIT(A), without giving any justifiable reasoning and ignoring the submissions made before the Ld. CIT (A) and without I.T.A. Nos.487 to 491/Lkw/2024 7 appreciating the facts of the case and judicial precedents, bad in law and is liable to be quashed. 2. That the order dated 25-05-2023 passed by the Additional Commissioner of Income Tax (TDS) imposing the penalty of Rs.3,90,393/- is bad in law for the reason that said order under section 271C of the IT Act 1961 dated 25-05-2023 vide DIN No- KNP/95/25-05-2023/00102 and said notice of demand u/s 156 of the IT Act 1961 dated 25-05-2023 vide DIN number:- KNP/95/25-05-2023/00101 has been issued with the same Document Identification Number (\"DIN\"), which is wrong and against as per Board Circular, which is mandatory in term of circular No.19 of 2019 dated 14-08-2019 issued by the Central Board of Direct Taxes (\"CBDT\"). 3. That on the facts and in the circumstance of the case and in law, the Ld. CIT (A) failed to appreciate the fact that the order of penalty passed by the Ld. Additional Commissioner of Income Tax (TDS) dated 25-05-2023 U/s 271C of the Act is bad in law and void ab initio, since the penalty proceedings have been initiated after almost 7 years from the end of the financial year which cannot be considered reasonable time period for initiating proceedings as held by various authorities. 4. That on the facts and circumstance of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act 1961, disallowance of LTC/LTA under section 10(5) of the Act, without appreciating that no tax was deductible on the provisions created by the Appellant. 5. That on the facts and circumstances of the case and in law, the Ld. CIT (A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act, disallowance of LTC/LTA under section 10(5) of IT Act 1961, without appreciating that there was 'reasonable cause' for the said failure as per the provisions of Section 273B of the Act 1961. 6. That the grounds of appeal as pleaded before the Learned CIT(Appeal) are relied upon the appeal before the Hon'ble Member, ITAT. I.T.A. Nos.487 to 491/Lkw/2024 8 7. That the Learned CIT (Appeal) has erred in law in rejecting the appeal arbitrarily and in utter disregard of the submission made before him. 8. That the above grounds are independent and without prejudice to each other.” (A.1) For the sake convenience, these five appeals are hereby disposed of through this consolidated order. (B) First of all appeal vide I.T.A. No.488/Lkw/2024 is taken up. Vide order dated 19/09/2023, penalty amounting to Rs.1,59,596/- was imposed by Addl CIT (TDS) on the ground that the assessee had failed to deduct tax at source in respect of reimbursements of LTC/LFC paid to the employees for travelling abroad. As the reimbursements of LTC/LFC in respect of foreign travel of the employee is not exempt u/s 10(5) of the Act, the Addl. CIT (TDS) levied the aforesaid penalty u/s 271C of the Act. The relevant portion of the aforesaid order dated 19/09/2023 is reproduced as under: I.T.A. Nos.487 to 491/Lkw/2024 9 ((B.1) The assessee filed against the aforesaid order dated 19/09/2023 levying the penalty u/s 271C of the Act, in the office of the learned CIT(A). Vide impugned appellate order dated 10/06/2024, the learned CIT(A) confirmed the aforesaid penalty and dismissed assessee’s appeal. The relevant portion of the impugned order of the learned CIT(A) is reproduced as under: I.T.A. Nos.487 to 491/Lkw/2024 10 I.T.A. Nos.487 to 491/Lkw/2024 11 I.T.A. Nos.487 to 491/Lkw/2024 12 I.T.A. Nos.487 to 491/Lkw/2024 13 I.T.A. Nos.487 to 491/Lkw/2024 14 I.T.A. Nos.487 to 491/Lkw/2024 15 I.T.A. Nos.487 to 491/Lkw/2024 16 (B.2) The present appeal vide I.T.A. No.488/Lkw/2024 has been filed by the assessee against the aforesaid impugned appellate order. In the course of appellate proceedings in Income Tax Appellate Tribunal, hearings fixed on 12/11/2024 and 17/02/2024 were not attended by anyone on behalf of the assessee. Once again the hearing was fixed on 22/04/2025 however, there was no representation from the assessee’s side again. In the absence of any representation from assessee’s side, we heard the learned D.R. for Revenue. He relied on the aforesaid orders dated 19/09/2023 and 10/06/2024 passed by the Addl. CIT (TDS) and the learned CIT(A) respectively. (B.2.1) On perusal of records, it is found that there is no dispute that the assessee was required to deduct tax at source in respect of reimbursement of LTC/LFC paid to employees in respect of foreign travel. It is also found that the assessee could not provide any reasonable cause u/s 273B of the Act for the failure to deduct tax at source in respect of the aforesaid reimbursements. The only explanation furnished by the assessee before the learned CIT(A) was that the assessee was under bonafide belief that tax was not deductible at source. The assessee advanced no other pleading to explain how the assessee was prevented by reasonable cause from deducting tax at source. In the course of appellate proceedings in Income Tax Appellate Tribunal also, no reasonable cause has been advanced from the assessee’s side, within the meaning of section 273B of the Act for failure I.T.A. Nos.487 to 491/Lkw/2024 17 to deduct tax at source in respect of reimbursement of LTC/LFC paid to employees in respect of foreign travel. The assessee, State Bank of India, is a leading corporate entity of India; having no dearth of intellectual resources knowledgeable in the field of Income Tax Act; and the concerned person(s) in the assessee could have easily received knowledge inputs either from within the organization or from outside, if required. Failure to observe due diligence in deducting tax at source, despite informed resources easily available to the assessee, pleading and for such that it failed to deduct tax at source due to lack of knowledge or due to bona fide belief that tax was not deductible at source, cannot be accepted as a reasonable explanation. No material has been presented by either side to persuade us to interfere with the impugned appellate order of learned CIT(A), whereby learned CIT(A) confirmed the levy of penalty u/s 271C of the Act. Therefore, we decline to interfere with the impugned appellate order of learned CIT(A), and the appeal filed by the assessee is dismissed. (C) The facts in respect of appeals in I.T.A. No. 490 & 491/Lkw/2024 are similar to the facts of aforesaid appeal I.T.A. No.488/Lkw/2024. The facts being same in pari materia, the appeals vide I.T.A. No.490/Lkw/2024 and I.T.A. No.491/Lkw/2024 are also dismissed as the same reasoning will apply mutatis mutandis in these two appeals as in I.T.A. No.488/Lkw/2024. (D) On merits, facts of I.T.A. No.487/Lkw/2024 and I.T.A. No.489/Lkw/2024 are also similar to facts of appeal vide I.T.A. No.488/Lkw/2024. Facts being similar in pari materia, these two appeals vide I.T.A. No.487/Lkw/2024 and I.T.A. No.489/Lkw/2024 also deserve to be dismissed on merits as the same reasoning would apply mutatis mutandis in these two appeals, as in I.T.A. No.488/Lkw/2024. In addition, we find from the perusal of order sheets in the records that the assessee I.T.A. Nos.487 to 491/Lkw/2024 18 failed to remove the defects in filing of appeal as communicated by the Registry. However, since the appeals deserve to be dismissed on merits, the matter regarding defect in filing of the appeal in I.T.A. No.487/Lkw/2024 and I.T.A. No.489/Lkw/2024 is merely academic. In view of the foregoing, the appeal vide I.T.A. No.487/Lkw/2024 and I.T.A. No.489/Lkw/2024 are also dismissed. (E) In the result, all the appeals of the assessee are dismissed. (Order was pronounced in the open court on 24/04/2025) Sd/. Sd/. (SUDHANSHU SRIVASTAVA) (ANADEE NATH MISSHRA) Judicial Member Accountant Member Dated:24/04/2025 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T., 5. CIT(A) Assistant Registrar "