M/s. Syndicate Bank, Bangalore V. Asst. Commissioner of Income-Tax(TDS), Bangalore

ITA 1398/BANG/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5546 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Assessee Lawyers: A ANANTHAN
• Keywords: Salary income; Non-deduction of tax; Benefit of exemption
• Section: 10(14); 133A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL BENGALURU BENCH C BENGALURU BEFORE SI S/SHRI GEORGE GEORGE K., JM & S.JAYARAMAN, AM (1 - 6) I.T.A. NOS.1398 TO 1403/BANG/2016 ASSESSMENT YEAR : 2011 - 12 (7 - 49) I.T.A. NOS.1435 TO 1477/BANG/2016 ASSESSMENT YEAR : 2011 - 12 SYNDICATE BANK, REGIONAL OFFICE-1, NO.110, RADHA VITTALA MANSION, R.V. ROAD, V.V.PURAM, BENGALURU. TAN/PAN:AACCS4699E/BLRS14425F VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX (TDS), CIRCLE-18(2), BENGALURU. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI A. ANANTHAN, CA REVENUE BY SHRI M.K.BIJU, JCIT DATE OF HEARING 08/03/2017 DATE OF PRONOUNCEMENT 06 / 04 /2017 O R D E R PER BENCH: THESE 49 APPEALS FILED, AT THE INSTANCE OF THE A SSESSEE-BANK ARE DIRECTED AGAINST THE VARIOUS ORDERS PASSED BY THE CIT(A) RELATING TO VAR IOUS ASSESSMENT YEARS. I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 2 2. THE ASSESSEE-BANK HAS, IN ITS GROUNDS OF APPEAL S FOR ALL THE ASSESSMENT YEARS UNDER DISPUTE, RAISED MORE OR LESS THE FOLLOWING IDENTICA L ISSUES, NAMELY: (1) THAT THE CIT(A) ERRED IN CONFIRMING THE DEMANDS RAI SED BY THE A.O. U/S. 201(1) AND U/S. 201(1A) OF THE ACT; (2) THAT THE CIT(A) ERRED IN CONCLUDING THAT THE EMPLO YEES OF THE ASSESSEE WAS NOT ELIGIBLE EXEMPTION U/S. 10(5) OF THE ACT FOR EX PENDITURE INCURRED FOR REIMBURSEMENT OF LTC/LFC CLAIMS; & (3) THAT THE CIT(A) ERRED IN HOLDING THAT THE ASSESSEE AS AN ASSESSEE IN DEFAULT AND, ACCORDINGLY, CONFIRMED THE DEMAND RAISED U/S. 201 OF THE ACT WITHOUT BRINGING ON RECORD THAT THE EMPLOYEES HAVE NOT PAID THEIR TAXES. 3. AS THE ISSUES RAISED IN THESE APPEALS PERTAINING TO THE SAME ASSESSEE AND ALSO INTERLINKED, FOR THE SAKE OF CONVENIENCE, THEY WERE HEARD, CONSIDERED AND DISPOSED OFF IN THIS CONSOLIDATED ORDER . 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS F OLLOWS:- THE ASSESSEE-BANK IS A NATIONALIZED BANK. A S URVEY U/S. 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 18.03.2014 BY THE ASST. COMMISSIONER OF INCOME-TAX(TDS) THE A.O. TO VER IFY THE TDS COMPLIANCE BY THE ASSESSEE IN THE CASE OF SALARY AND PERQUISITE PAYME NTS MADE TO ITS EMPLOYEES. IT WAS THE STAND OF THE A.O. THAT THE ASSESSEE-BANK HAD ER RONEOUSLY ALLOWED LFC EXEMPTION U/S. 10(5) OF THE ACT TO ITS EMPLOYEES SINCE THE TR AVELS ALSO INCLUDED A LEG OUTSIDE INDIA AND TRAVEL BY LONG CIRCUITOUS ROUTE WHICH WAS NOT I N ACCORDANCE WITH THE PROVISIONS OF S. 10(5) OF THE ACT READ WITH RULE 2B OF I.T. RULES. AFTER DUE CONSIDERATION OF THE I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 3 ASSESSEES EXPLANATION AND ALSO EXTENSIVELY ANALYZI NG THE PROVISIONS OF (I) RULE 2B OF INCOME-TAX RULES, 1962; (II) S.10(5) OF THE ACT AND FOLLOWING THE DECISION OF THE HONBLE ITAT, CHANDIGARH BENCH, IN THE CASE OF SH. OM PARKA SH GUPTA V. ITO (I.T.A. NO. 938/CHD/2011), THE A.O. WAS OF THE VIEW THAT THE DE DUCTOR (THE ASSESSEE-BANK) WAS AN ASSESSEE IN DEFAULT U/S. 201(1) FOR MAKING SHORT- DEDUCTION U/S. 192 AND WAS LIABLE TO PAY THE DEFAULTED AMOUNT AS CALCULATED IN THE RESPE CTIVE IMPUGNED ORDERS PASSED U/S. 201(1) AND 201(1A) OF THE ACT . 5. AGGRIEVED, THE ASSESSEE-BANK TOOK UP THE ISSUE S FOR ALL THE ASSESSMENT YEARS UNDER DISPUTE BEFORE THE CIT(A) FOR CONSIDERATION. AFTER DUE CONSIDERATION OF THE ASSESSEES CONTENTIONS, THE A.O.S REASONING AS ELABORATELY DI SCUSSED IN IMPUGNED ORDERS UNDER DISPUTE, THE CIT(A) CONFIRMED THE A.O.S STAND FOR ALL THE AYS UNDER CONSIDERATION FOR ALMOST IDENTICAL REASONS. FOR APPRECIATION OF FACT S, THE RELEVANT PORTIONS OF THE CIT(A)S REASONING ARE AS UNDER: ( AT PG. 10 OF CIT(A) ORDER FOR AY 2011-12 (I.T.A. NO .550/TDS/CIT(A)13/14-15) AT PGF CITA 6.2. I FIND THAT AS PER PROVISIONS OF SECTION 10(5 ) OF THE ACT, ONLY THAT REIMBURSEMENT OF TRAVEL CONCESSION OR ASSISTANCE TO AN EMPLOYEE I S EXEMPTED WHICH WAS INCURRED FOR TRAVEL OF THE INDIVIDUAL EMPLOYEE OR HIS FAMILY MEM BERS TO ANY PLACE IN INDIA. NOWHERE IN THIS CLAUSE, IT HAS BEEN STATED THAT EVE N IF THE EMPLOYEE TRAVELS TO FOREIGN COUNTRIES, EXEMPTION WOULD BE LIMITED TO THE EXPEND ITURE INCURRED TO THE LAST DESTINATION IN INDIA. THE APPELLANT HAS RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LARSEN & TOUBRO LTD. ( 2009) 313 ITR 1. THE SAID JUDGMENT IS NOT ABOUT THE CLAIM OF LTC/LFC TO FOREI GN COUNTRIES BUT PERTAINS TO THE ISSUE AS TO WHETHER THE EMPLOYEE HAS ACTUALLY UTILI ZED THE AMOUNT PAID TOWARDS LTC/LFC., AND IS, THEREFORE, NOT APPLICABLE TO THE CASE OF THE APPELLANT. I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 4 ON PERUSAL OF SECTION 10(5) OF THE ACT AND THE CORR ESPONDING RULE 2B OF I.T. RULES, IT IS EVIDENT THAT THERE WAS NO INTENTION OF THE LEGIS LATURE TO ALL THE EMPLOYEES TO TRAVEL ABROAD UNDER THE GARB OF BENEFIT OF LTC AVAILABLE B Y VIRTUE OF SECTION 10(5) OF THE ACT. IN THE INSTANT CASE, THE EMPLOYEES OF THE DEDU CTOR HAVE TRAVELLED OUTSIDE INDIA IN DIFFERENT FOREIGN COUNTRIES AND RAISED CLAIM OF THE IR EXPENDITURE INCURRED THEREIN. NO DOUBT, THE DEDUCTOR MAY NOT BE AWARE WITH THE ULTIM ATE PLAN OF TRAVEL OF ITS EMPLOYEES, BUT, AT THE TIME OF SETTLEMENT OF THE LT C/LFC BILLS, COMPLETE FACTS ARE AVAILABLE BEFORE THE DEDUCTOR AS TO WHERE THE EMPLO YEES HAVE TRAVELLED, FOR WHICH, HE HAS RAISED THE CLAIM; MEANING THEREBY THE DEDUCT OR WAS AWARE OF THE FACT THAT ITS EMPLOYEES HAVE TRAVELLED IN FOREIGN COUNTRIES, FOR WHICH HE WAS NOT ENTITLED FOR EXEMPTION U/S. 10(5) OF THE ACT. RECENTLY, THE HON BLE ITAT, LUCKNOW BENCH A IN THE CASE OF STATE BANK OF INDIA VS. DCIT(TDS), KANPUR ( IT APPEAL NOS. 138 TO 140 (LUCK) OF 2015). ON SIMILAR FACTS HAS HELD THAT THE A.O. HAS RIGHTLY HELD THE ASSESSEE TO BE IN DEFAULT, AS THE ASSESSEE HAS NOT DEDUCTED TDS IN TENTIONALLY ON THE REIMBURSEMENT OF EXPENDITURE INCURRED ON LTC/LFC. THUS, THE PAYM ENT MADE TO ITS EMPLOYEES WAS CHARGEABLE TO TAX AND IN THAT SITUATION, THE DEDUCT OR WAS UNDER OBLIGATION TO DEDUCT TDS ON SUCH PAYMENT, BUT, THE DEDUCTOR DID NOT DO S O.. 6.3 GROUND NO. 4: THE APPELLANT HAS TAKEN THE GROU ND THAT THE ASSESSING OFFICER ERRED IN CONFIRMING THE DEMAND U/S. 201 OF THE ACT WITHOUT BRINGING ON RECORD THAT THE EMPLOYEES HAVE NOT PAID THE TAX AND THAT THE AS SESSING OFFICER FAILED TO APPRECIATE THE FACT THAT THE APPELLANT AS AN EMPLOY ER HAS ONLY TO MAKE A FAIR ESTIMATE OF THE SALARY INCOME FOR MAKING DEDUCTIONS U/S. 192 . AGAIN, IT IS MENTIONED THAT IT IS A SURVEY CASE WHEREIN THE DEPARTMENT FOUND THAT THE DEDUCTOR HAD ALLOWED THE EXEMPTION U/S. 10(5) TO EMPLOYEES FOR TRAVEL OUTSID E INDIA (FOREIGN TRAVEL). THE A.O. IN HER ORDER HAS MENTIONED THAT THE EMPLOYEES ALSO SUBMIT THE QUOTATION FROM THE TOUR AND TRAVEL AGENT ABOUT THE EXPENDITURE EXPECTE D TO BE INCURRED BY THEM TOWARDS THE TRAVEL. THE QUOTATION INCLUDES BOTH INDIAN TR AVEL AND FOREIGN TRAVEL. HOWEVER, THE EMPLOYER CONSIDERS OVERALL EXPENDITURE (I.E., B OTH INDIAN AND FOREIGN) AS NOTIONAL EXPENDITURE INCURRED TOWARDS TRAVEL FROM BANGALORE TO FARTHEST PLACE IN INDIA/DESTINATION PLACED DECLARED BY EMPLOYEE (MAY BE WAGHA BORDER OR DEBRUGARH ETC.) THUS, NOTIONAL EXPENSES REIMBURSED BY EMPLOYE R ARE MUCH HIGHER THAN THE ACTUAL EXPENDITURE INCURRED BY EMPLOYEE FOR HIS PLA CES OF VISIT IN INDIA. THOUGH THE BILLS OF ACTUAL EXPENDITURE INCURRED BY EMPLOYEE FO R TRAVEL WITHIN INDIA IS AVAILABLE ON RECORDS, SAME IS NOT TAKEN INTO CONSIDERATION BY EM PLOYER. INSTEAD, EMPLOYER CALCULATES SEPARATELY BY CONSIDERING NATIONAL CARRI ER PRICES TO THE DESTINATION PLACED DECLARED BY THE EMPLOYEE. THESE NOTIONAL PRICES ARE CALCULATED BASED ON THE PRICE LIST GIVEN BY TRAVEL AGENT AND THESE PRICES ARE HIGHER I N RATES COMPARATIVE TO THE NORMAL BOOKINGS. THE AMOUNT CALCULATED BY THE EMPLOYER IS REIMBURSED TO THE EMPLOYEE. HERE, THE AMOUNT CLAIMED AND THE REIMBURSEMENT AMOU NT USED TO BE THE SAME OR I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 5 MINOR DIFFERENCE I.E., DIFFERENCE IN FEW THOUSANDS ONLY. THE EMPLOYER REIMBURSED AMOUNT IS OVER AND ABOVE THE ACTUAL EXPENDITURE INC URRED FOR THE PROCEEDINGS WITHIN INDIA. IT MEANS EMPLOYER IS REIMBURSING THE EXPEND ITURE INCURRED ON FOREIGN TRAVEL ALSO. THE REIMBURSEMENT AMOUNT INCLUDES THE EXPEND ITURE INCURRED FOR BOTH INDIAN AND FOREIGN TRAVEL. IN ALL CASES, BOARDING PASSES OF FOREIGN TRAVEL IS AVAILABLE ON RECORD. THUS, HERE IS A CASE WHEREIN THE DEDUCTOR IS FACILITATING THE EMPLOYEES TO VIOLATE SECTION 10(5) OF THE ACT AND TO WRONGLY CLA IM INCOME TAX BENEFITS UNDER THE SAID SECTION 10(5) OF THE ACT AND, THUS, WRONGLY CL AIMS THAT IT IS MAKING THE BONA-FIDE ESTIMATE OF INCOME IN THE HANDS OF EMPLOYEE FOR MAK ING DEDUCTIONS U/S. 192. 6.4.. . 6.5 IN CONSIDERATION OF THE FACTUAL POSITION AND L EGAL PRECEDENTS, I AM OF THE VIEW THAT THE A.O. HAS RIGHTLY HELD THE DEDUCTOR TO BE A SSESSEE IN DEFAULT, AS THE DEDUCTOR HAS NOT DEDUCTED TDS INTENTIONALLY ON THE REIMBURSE MENT OF EXPENDITURE INCURRED ON LTC/LFC SINCE THE CLAIM OF THE EMPLOYEE DOES NOT FA LL UNDER THE PROVISIONS OF SECTION 10(5) OF THE INCOME-TAX ACT, 1961. SO THE PROVISIO N OF SECTIONS 201 AND 201(1A) OF THE INCOME-TAX ACT WILL BE ATTRACTED. 5.1 IN ESSENCE, THE CIT(A) HAD CONFIRMED THE DEMA ND RAISED BY THE A.O. U/S. 201 AND 201(1A) OF THE ACT FOR ALL THE ASSESSMENT YEARS UND ER CONSIDERATION. 6. AGGRIEVED, THE ASSESSEE-BANK HAS COME UP BEFORE US WITH THE PRESENT APPEALS. DURING THE COURSE OF HEARING, THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE ARE SUMMARIZED AS UNDER: -THAT THE ELIGIBILITY TO CLAIM EXEMPTION FOR LFC IS GIVEN IN S. 10(5) OF THE ACT AND THE AMOUNT OF EXEMPTION IS GIVEN IN RULE 2B OF THE INCOME-TAX RULES. THE RULE ALSO HAS LAID DOWN THE CONDITIONS REGARDING VARIOUS MODE S OF TRANSPORT. IN ORDER TO I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 6 APPRECIATE THE AMOUNT THAT WILL BE EXEMPTED AS LFC IN THE HANDS OF THE EMPLOYEE, IT WAS ESSENTIAL TO READ THE SECTION AND THE RELEVA NT RULE TOGETHER. THE SECTION STIPULATES THAT AN EMPLOYEE SHOULD PROCEED ON LEAVE TO ANY PLACE IN INDIA. THE AMOUNT ELIGIBLE FOR EXEMPTION EXCEEDING THE ECONOMY FARE OF THE NATIONAL CARRIED BY THE SHORTEST ROUTE TO THE PLACE OF DESTINATION; -THAT THE EMPLOYEES OF THE ASSESSEE-BANK PROCEEDED ON LEAVE TO A PLACE IN INDIA AS LAID DOWN IN S. 10(5) AND THE AMOUNT THAT WAS R EIMBURSED TO THEM WAS NOT IN EXCESS OF THE ECONOMY FARE OF THE NATIONAL CARRIER TO THAT DESTINATION AS LAID DOWN IN RULE 2B. IN VIEW OF THIS, IT WAS APPARENT THAT T HE ASSESSEE-BANK HAD NOT DEFAULTED IN COMPLYING WITH THE TDS PROVISIONS OF T HE ACT; -THAT THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THERE WAS NO REQUIREMENT UNDER THE LAW OR THE RULES THAT THE JOURNEY SHOULD BE PER FORMED THROUGH SHORTEST ROUTE. -THAT THE CIT(A) ERRED IN HOLDING THAT THE TRAVEL S HOULD BE WITHIN INDIA; -THAT THE CIT(A) ERRED IN CONFIRMING THE DEMAND U/S . 201 OF THE ACT WITHOUT BRINGING ON RECORD THAT THE EMPLOYEES HAVE NOT PAID THE TAXES; -THAT THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE-BANK NEED NOT ESTABLISH THE ELIGIBILITY OF THE EMPLOYEES TO CLAIM DEDUCTION U/S. 10(5) OF THE ACT; -THAT THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE-BANK WAS UNDER BONA-FIDE BELIEF THAT THE LTC WAS EXEMPT IN THE HAN DS OF THE EMPLOYEES ; & -THAT THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE-BANK WAS UNDER THE BONA-FIDE BELIEF THAT THE AMOUNT WAS EXEMPT U/S. 10 (5) AND AS SUCH, THE ASSESSEE- BANK CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT U/S. 201 OF THE ACT. 6.1.1 IN CONCLUSION, IT WAS SUBMITTED THAT IN V IEW OF THE ABOVE CONTENTIONS, THE STAND TAKEN BY THE AUTHORITIES BELOW REQUIRES TO BE QUASH ED. TO BUTTRESS ITS ARGUMENTS, THE ASSESSEE-BANK HAS PLACED STRONG RELIANCE ON THE FOL LOWING CASE LAWS, NAMELY: (I) LARSEN AND TOUBRO LTD. V. CIT (2009) 313 ITR 1 (S C); (II) CIT V. HCL INFO SYSTEM LTD. (2005) 146 TAXMAN 227 (DEL); (III) CIT V. NESTLE INDIA LTD. (2000) 243 ITR 435 (DEL) ; (IV) GWALIOR RAYON SILK CO. LTD. V. CIT (1983) 140 ITR 8 32 (MP); & (V) CIT & ANR. V. M/S. ITC LTD. 2013 (9) TMI 766 (ALL ) I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 7 6.2 ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT AS PER THE PROVISIONS OF S.10(5) OF THE ACT, ONLY THE REIMBURSEMENT OF EXPEN SES WHICH WERE INCURRED ON TRAVEL OF EMPLOYEES AND HIS FAMILY TO ANY PLACE IN INDIA SUBJ ECT TO CERTAIN CONDITIONS ARE EXEMPT. IT WAS, FURTHER, SUBMITTED THAT SINCE THE EMPLOYEES OF THE ASSESSEE-BANK HAD TRAVELLED TO FOREIGN COUNTRIES, THE BENEFIT OF EXEMPTION AVAI LABLE U/S. 10(5) OF THE ACT CANNOT BE EXTENDED. IT WAS ARGUED THAT AT THE TIME OF ADVANC EMENT OF LTC AMOUNT, THE EMPLOYER MAY NOT HAVE BEEN AWARE OF IT, BUT, AT THE TIME OF SETTLEMENT OF BILLS OF LTC/LFC, COMPLETE DETAILS WERE OBTAINED BY THE EMPLOYER AND WERE AVAILABLE ON RECORD. ONCE IT WAS NOTICED THAT THE EMPLOYEE HAD VISITED FOREIGN C OUNTRIES AND HE WAS NOT ENTITLED FOR EXEMPTION OF REIMBURSEMENT OF LTC U/S. 10(5) OF THE ACT, IT WAS CONTENDED BY THE LEARNED DR, THE EMPLOYER (ASSESSEE-BANK) OUGHT TO H AVE DEDUCTED TAX AT SOURCE TREATING THE AMOUNT AS NOT EXEMPT AND AS BEING PART OF THE EMPLOYEES TOTAL SALARY. IT WAS THEREFORE, SUBMITTED THAT SINCE THE ASSESSEE BA NK HAD INTENTIONALLY NOT DEDUCTED TAX AT SOURCE ON A PAYMENT TO WHICH THE EMPLOYEE WA S NOT ENTITLED FOR ANY EXEMPTION, THE A.O.(TDS) HAD RIGHTLY HELD THAT THE ASSESSEE-BA NK TO BE IN DEFAULT AND RAISED THE DEMANDS U/S. 201(1) AND 201(1A) OF THE ACT. 6.2.1 IN SUPPORT OF HIS ARGUMENT, THE LEARNED DR HAD PLAC ED STRONG RELIANCE ON THE FOLLOWING CASE LAWS, NAMELY: (I) SBI V. DCIT (TDS), KANPUR (67 TXMANN.COM 81); (II) OM PARKASH GUPTA V. ITO, CHANDIGARH I.T.A. NO.938 /CHD/2011 DATED: 29.4.2013. 6.3 IT WAS THE ARGUMENT OF THE LEARNED DR THAT THE AS SESSEE-BANK IN THE PRESENT CASE HAD ONLY RELIED UPON A NUMBER OF CASE LAWS (SU PRA) TO SAY WHERE BELIEF WAS BONA- FIDE, IT CANNOT BE HELD TO BE IN DEFAULT. BUT, IT H AD MADE NO EFFORT TO SHOW HOW THE BELIEF I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 8 WAS FORMED TO EXCLUDE SUCH ALLOWANCE FROM SALARY OF THE EMPLOYEE. NEITHER HAD IT ADDUCED ANY EVIDENCE TO SUPPORT ITS CLAIM THAT IT A CTED IN A BONA-FIDE MANNER NOR WAS THAT THERE ANY BASIS FOR FORMING THE BELIEF THAT SU CH ALLOWANCE EXEMPT U/S. 10(5) OF THE ACT. 6.4 IN CONCLUSION, THE LEARNED DR SUMMED UP THAT THE P ROVISIONS OF S.10(5) OF THE ACT PROVIDE THAT REIMBURSEMENT OF TRAVEL CONCESSION OR ASSISTANCE TO AN EMPLOYEE WAS EXEMPT WHICH WAS INCURRED FOR TRAVEL OF THE INDIVID UAL EMPLOYEE OR HIS FAMILY MEMBERS TO ANY PLACE IN INDIA. NOWHERE IN THIS CLAUSE, HAS IT BEEN STATED THAT EVEN IF THE EMPLOYEE TRAVELS TO FOREIGN COUNTRIES, EXEMPTION WO ULD BE LIMITED TO THE EXPENDITURE INCURRED TO THE LAST DESTINATION IN INDIA. IT WAS, THEREFORE, PLEADED THAT THE STAND OF THE AUTHORITIES BELOW REQUIRES TO BE SUSTAINED. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIALS ON RECORD AND ALSO THE CASE LAWS RELIED O N BY EITHER PARTY. 7.1 THE SOLITARY ISSUE FOR CONSIDERATION NOW IS: WHETHE R THE A.O. WAS JUSTIFIED IN TREATING THE ASSESSEE-BANK AS AN ASSESSEE IN DEFAU LT U/S. 201(1) OF THE ACT FOR MAKING SHORT DEDUCTION U/S. 192 OF THE ACT IN ALLOWING EXE MPTION U/S. 10(5) OF THE ACT TOWARDS THE REIMBURSEMENT OF LTC/LFC CLAIMS OF ITS EMPLOYEE S? 7.2 BRIEFLY STATED, A SURVEY U/S. 133A OF THE ACT HAD T AKEN PLACE IN THE BUSINESS PREMISES OF THE ASSESSEE-BANK ON 18.3.2014 BY THE A CIT, TDS CIRCLE 18(2), BENGALURU I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 9 THE A.O. AND IT WAS NOTICED DURING THE COURSE OF SURVEY THAT THE ASSESSEE-BANK (THE DEDUCTOR) HAD ALLOWED EXEMPTION U/S. 10(5) OF THE A CT TO ITS EMPLOYEES FOR TRAVEL OUTSIDE INDIA AND ALSO TRAVELLED BY A CIRCUITOUS RO UTE WHICH WAS NOT IN ACCORDANCE WITH THE PROVISIONS OF S.10(5) OF THE ACT R.W. RULE 2B. ACCORDINGLY, THE A.O. TREATED THE ASSESSEE-BANK AS AN ASSESSEE IN DEFAULT U/S. 201( 1) OF THE ACT FOR THE ELABORATE REASONS SET OUT IN IMPUGNED ASSESSMENT ORDERS FOR T HE ASSESSMENT YEARS UNDER DISPUTE. THE A.O.S STAND WAS DULY CONFIRMED BY THE CIT(A) F OR THE REASONS RECORDED IN THE IMPUGNED ORDERS UNDER DISPUTE. DURING THE COURSE O F HEARING BEFORE US, THE LEARNED COUNSEL HAD MADE CERTAIN ARGUMENTS WHICH ARE DEALT WITH AS UNDER: (I) THAT THERE WAS NO REQUIREMENT UNDER THE LAW OR THE RULES THAT THE JOURNEY SHOULD BE PERFORMED THROUGH SHORTEST ROUTE: RULE 2B OF INCOME-TAX RULES, 1962 SAYS CONDITIONS FOR THE PURPOSE OF SECTION 10(5) 2B . (I) WHERE THE JOURNEY IS PERFORMED ON OR AFTER THE 1 ST DAY OF OCTOBER, 1997, BY AIR, AN AMOUNT NOT EXCEEDING THE AIR ECONOMY FAR E OF THE NATIONAL CARRIER BY THE SHORTEST ROUTE TO THE PLACE OF DESTINATION; AS PER THE PROVISIONS OF SECTION 10(5) OF THE INCOM E-TAX ACT & RULE 2B OF INCOME-TAX RULES, THE REIMBURSEMENT OF LTC IS EXEMP T U/S. 10(5) OF INCOME- TAX ACT ONLY WHEN ALL THE CONDITIONS ARE FOLLOWED. THE CONDITIONS ARE AS FOLLOWS: -THERE MUST BE A REIMBURSEMENT OF - ACTUAL EXPENDITURE INCURRED ON - TRAVELLED WITHIN INDIA BY TAKING A - SHORTEST ROUTE [REFER: PAGES 4 & 5 OF A.O.S ORDER] I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 10 THE ABOVE EXPLANATION DISPELS THE ASSES SEES ARGUMENT. (II) THE CIT(A) ERRED IN HOLDING THAT THE TRAVEL SHOULD BE WITHIN INDIA: THE ASSESSEE BANK ITSELF VIDE ITS LETTER DT: 26/3/2 014 HAD STATED AS UNDER: (I) .. (II) IN OUR CASE, WE HAVE REIMBURSED THE LFC ONLY IN RESPECT OF JOURN EY THE DESTINATION OF WHICH IS IN INDIA. FURTHER, THE QUANTUM WAS RESTRICTED TO THE AIR FARE BY ECONOMY CLASS THROUGH THE SHORTEST ROUTE .. [COURTESY: P 6 OF A.O.S ORDER] 7.3 THE ABOVE NARRATIONS ARE HIGHLIGHTING THE CONTRA DICTIONS OF THE ASSESSEES DEFENSE. THE ASSESSEE-BANK HAD IN ITS GROUNDS OF A PPEAL CONTENDED THAT 4.5..THAT THE APPELLANT BANK WAS UNDER THE BONA -FIDE BELIEF THAT THE AMOUNT WAS EXEMPT U/S. 10(5) AND AS SUCH, THE APPEL LANT BANK CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT U/S. 201 OF THE INCOME-TAX ACT, 1961. ON THE CONTRARY, ON EXAMINATION OF THE CASE ON HAND, I T IS EXPLICIT THAT THE ASSESSEE BANK HAD NOT APPLIED ITS MIND WHILE APPLYI NG THE PROVISIONS OF S.10(5) OF THE ACT WITH LETTER AND SPIRIT AND ALLOWED EXEMP TION IN A MECHANICAL WAY. AS RIGHTLY HIGHLIGHTED BY THE LEARNED DR IN HIS SUB MISSIONS, THE PROVISIONS OF S. 10(5) OF THE ACT ARE CLEAR AND ONLY THE REIMBURSEME NT OF EXPENSES WHICH WERE INCURRED ON TRAVEL OF EMPLOYEES AND HIS FAMILY TO A NY PLACE IN INDIA SUBJECT TO CERTAIN CONDITIONS ARE EXEMPT. SINCE THE EMPLOYEES OF THE ASSESSEE-BANK HAD TRAVELLED TO FOREIGN COUNTRIES, THE BENEFIT OF EXEM PTION AVAILABLE U/S. 10(5) OF THE ACT SHOULD NOT HAVE BEEN GRANTED. WE AGREE THA T THE ASSESSEE-BANK MAY NOT HAVE BEEN AWARE OF THE DETAILS OF THE EMPLOYEES PLACES OR DESTINATION OF I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 11 VISITS AT THE TIME OF ADVANCEMENT OF LTC/LFC AMOUNT S. HOWEVER, AT THE FINAL SETTLEMENT OF THE CLAIMS OF THE EMPLOYEES UNDER LTC /LFC, THE ASSESSEE-BANK SHOULD HAVE OBTAINED ALL THE RELEVANT DETAILS SUCH AS THE PLACES OF VISITS (DESTINATIONS) ETC. WHEN THE ASSESSEE-BANK WAS AWAR E OF THE FACT THAT ITS EMPLOYEES HAD VISITED FOREIGN COUNTRIES BY AVAILING LTC/LFC CONCESSION AND SO HE WAS NOT ENTITLED FOR EXEMPTION OF REIMBURSEMENT OF LTC U/S. 10(5) OF THE ACT, THE ASSESSEE-BANK WAS UNDER OBLIGATION TO DEDU CT TAX AT SOURCE TREATING SUCH AN AMOUNT AS NOT EXEMPT. SINCE THE ASSESSEE-BA NK HAD FAILED TO ENFORCE ITS DUTY TO DEDUCT TAX AT SOURCE AS ENVISAGED IN SE CTION S.192 OF THE ACT,, IT IS TANTAMOUNT THAT THE ASSESSEE-BANK WAS AN ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT AND THE A.O.(TDS) WAS WITHIN HER DOMAIN TO HOLD SO. MOREOVER, THE ASSESSEE-BANK DOES NOT HAVE A CASE THAT ITS EMPLOYE ES HAVE INCLUDED THE LTC/LFC IN THEIR TAXABLE SALARY AND PAID TAX ON THE SAME. MOREOVER, THE NATIONAL CARRIER, I.E., AIR INDIA/INDIAN AIRLINES H AD ALSO BEEN OFFERING LTC PACKAGE TO VARIOUS DESTINATIONS IN INDIA AND ALLOWI NG PASSENGERS TO VISIT THE FOREIGN COUNTRIES AT THE FULL FARE CHARGEABLE TO TH E FINAL DESTINATION IN INDIA AND IT WAS CLEARLY MENTIONED IN AIR INDIA WEBSITE THAT THE VALUE OF LTC WAS CHARGEABLE TO INCOME TAX E . THE NATI 7.4 THE HONBLE ITAT, LUCKNOW BENCH A IN THE CASE OF SBI V.DCIT(TDS) REPORTED IN 67 TAXMANN.COM 81 ON IDENTICAL FACTS HA D DECIDED THE ISSUE IN FAVOUR OF REVENUE. FOR APPRECIATION OF FACTS, THE RELEVANT PORTION OF THE FINDINGS OF THE HONBLE BENCH IS AS FOLLOWS: I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 12 9. ON PERUSAL OF THIS SECTION, WE ARE OF THE VIEW THAT THIS PROVISION WAS INTRODUCED IN ORDER TO MOTIVATE THE EMPLOYEES AND A LSO TO ENCOURAGE TOURISM IN INDIA AND, THEREFORE, THE REIMBURSEMENT OF LTC/LFC WAS EXEMPTED, BUT, THERE WAS NO INTENTION OF THE LEGISL ATURE TO ALLOW THE EMPLOYEES TO TRAVEL ABROAD UNDER THE GARB OF BENEFI T OF LTC AVAILABLE BY VIRTUE OF SECTION 10(5) OF THE ACT. UNDISPUTEDLY, IN THE INSTANT CASE, THE EMPLOYEES OF THE ASSESSEE HAVE TRAVELLED OUTSIDE IN DIA IN DIFFERENT FOREIGN COUNTRIES AND RAISED CLAIM OF THEIR EXPENDITURE INC URRED THEREIN. NO DOUBT, THE ASSESSEE MAY NOT BE AWARE WITH THE ULTIMATE PLA N OF TRAVEL OF ITS EMPLOYEES, BUT AT THE TIME OF SETTLEMENT OF THE LTC /LFC BILLS, COMPLETE FACTS ARE AVAILABLE BEFORE THE ASSESSEE AS TO WHERE THE EMPLOYEES HAVE TRAVELLED, FOR WHICH, HE HAS RAISED THE CLAIM; MEAN ING THEREBY THE ASSESSEE WAS AWARE OF THE FACT THAT ITS EMPLOYEES HAVE TRAVE LLED IN FOREIGN COUNTRIES, FOR WHICH, HE IS NOT ENTITLED FOR EXEMPT ION U/S. 10(5) OF THE ACT. THUS, THE PAYMENT MADE TO ITS EMPLOYEES IS CHARGEAB LE TO TAX AND IN THAT SITUATION, THE ASSESSEE IS UNDER OBLIGATION TO DEDU CT TDS ON SUCH PAYMENT, BUT THE ASSESSEE DID NOT DO SO FOR THE REASONS BEST KNOWN TO IT. 7.5 ON IDENTICAL FACTS, THE HONBLE ITAT, CHANDIG ARH A BENCH IN THE CASE OF SH OM PARKASH GUPTA V. ITO IN I.T.A. NO.938/CHD/2011 D ATED 29.4.2013, HAD RECORDED ITS FINDINGS AS UNDER: 12. THE SAID SUB-SECTION PROVIDES THAT WHERE AN IN DIVIDUAL HAD RECEIVED TRAVEL CONCESSION OR ASSISTANCE FROM HIS EMPLOYER F OR PROCEEDING ON LEAVE TO ANY PLACE IN INDIA, BOTH FOR HIMSELF AND HIS FAM ILY, THEN SUCH CONCESSION RECEIVED BY THE EMPLOYEE IS NOT TAXABLE IN THE HAND S OF THE EMPLOYEE. SIMILAR EXEMPTION IS ALLOWED TO AN EMPLOYEE PROCEED ING TO ANY PLACE IN INDIA AFTER RETIREMENT OF SERVICE OR AFTER THE TERM INATION OF HIS SERVICE. THE PROVISIONS OF THE ACT ARE IN RELATION TO THE TRAVEL CONCESSION/ASSISTANCE GIVEN FOR PROCEEDING ON LEAVE TO ANY PLACE IN INDIA AND THE SAID CONCESSION IS THUS EXEMPT ONLY WHERE THE EMPLOYEE HAS UTILIZED THE TRAVEL CONCESSION FOR TRAVEL WITHIN INDIA. FURTHER, UNDER RULE 2B OF THE INCOME-TAX RULES THE CONDITIONS FOR ALLOWING EXEMPTION U/S. 10(5) OF THE ACT ARE LAID DOWN. THE CONDITIONS ARE IN RESPECT OF VARIOUS MODES OF TRANS PORT. HOWEVER, THE BASIC CONDITION IS THAT THE EMPLOYEE IS TO UTILIZE THE TR AVEL CONCESSION IN CONNECTION WITH HIS PROCEEDING TO LEAVE TO ANY PLAC E WITHIN INDIA, EITHER I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 13 DURING THE COURSE OF EMPLOYMENT OR EVEN AFTER RETIR EMENT OF SERVICE OR AFTER TERMINATION OF SERVICE. READING OF SECTION 10 (5) OF THE ACT AND RULE 2B OF THE RULES IN CONJUNCTION LAYS DOWN THE GUIDEL INES FOR CLAIMING EXEMPTION IN RELATION TO THE TRAVEL CONCESSION RECE IVED BY AN EMPLOYEE FROM HIS EMPLOYER OR FORMER EMPLOYER, FOR PROCEEDIN G ON LEAVE TO ANY PLACE IN INDIA AND THEREAFTER RETURN TO THE PLACE O F EMPLOYER AND IS ENTITLED TO REIMBURSEMENT OF EXPENDITURE ON SUCH TRAVEL BETW EEN THE PLACE OF EMPLOYMENT AND DESTINATION IN INDIA. RULE 2B OF TH E RULES FURTHER LAYS DOWN THE CONDITIONS THAT THE AMOUNT TO BE ALLOWED A S CONCESSION IS NOT TO EXCEED THE AIR ECONOMY FARE OF THE NATIONAL CARRIER BY THE SHORTEST ROUTE TO THE DESTINATION IN INDIA. THE SAID CONDITION IN NO WAY PROVIDES THAT THE ASSESSEE IS AT LIBERTY TO CLAIM EXEMPTION OUT OF HI S TOTAL TICKET PACKAGE SPENT ON HIS OVERSEAS TRAVEL AND PART OF THE JOURNE Y BEING WITHIN INDIA. WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE IN THE P RESENT CASE AND WE ARE IN CONFORMITY WITH THE OBSERVATION OF THE CIT(APPEALS) IN THIS REGARD IN VIEW THEREOF, WE REJECT THE CLAIM OF THE ASSESSE E OF EXEMPTION U/S. 10(5) OF THE ACT 7.6 IN THE CASE OF CIT V. HCL INFO SYSTEMS LTD. (SUPR A) RELIED ON BY THE ASSESSEE-BANK - THE ISSUE WAS THAT THE A.O. HAD RE JECTED THE CLAIM OF THE ASSESSEE (HCL) OF TREATING LTC ALLOWANCE AS EXEMPT U/S. 10(5) FOR THE REASON OF NOT VERIFYING THE EVIDENCE WITH REGARD TO INCURRING OF ACTUAL EXPENDITURE. HOWEVER, THE TRIBUNAL HAD ACCEPTED THE ARGUMENT OF THE ASSESSEE THAT THE CBDT CIRCULARS DID NOT SPECIFICALLY REQUIRE VERIFICATION OF THE EVIDENCE AND, THUS, HELD THAT THERE WAS SUFFICIENT MATERIAL ON RECORD BY W AY OF DECLARATIONS FURNISHED BY THE EMPLOYEES CONCERNED FOR THE ASSESSEE TO FORM A BONA-FIDE BELIEF THAT LTA GRANTED TO ITS EMPLOYEES WAS EXEMPT U/S. 10(5) OF T HE ACT. ON AN APPEAL, THE HONBLE DELHI HIGH COURT CONCURRED THE FINDINGS OF THE TRIBUNAL BY HOLDING THAT THE BONA-FIDES OF THE ASSESSEE WAS ACCEPTED BY THE FIRST APPELLATE AUTHORITY AND WERE DULY CONFIRMED BY THE APPELLATE TRIBUNAL. I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 14 7.7 ON A CAREFUL PERUSAL OF THE RULING OF THE HONBLE COURT (SUPRA), WE ARE OF THE VIEW THAT THE SAID RULING OF THE HONBLE COURT IS DISTINGUISHABLE SO FAR AS THE ISSUE UNDER DISPUTE IS CONCERNED. THE PRESENT ASSE SSEE-BANK HAD NOT BROUGHT ANY CREDIBLE MATERIAL ON RECORD TO REMOTELY SUGGEST THAT THAT THE BASIS [BY WAY OF DECLARATIONS FURNISHED BY THE EMPLOYEES CONCERNED] FOR FORMATION OF SUCH A BONA- FIDE BELIEF AND HONEST OPINION ON EXEMPTION U/S. 10 (5) OF THE ACT OF SUCH AN ALLOWANCE ON A CIRCUITOUS ROUTE WHEN IT WAS EVIDENT THAT THE EMPLOYEES HAD UNDERTAKEN FOREIGN TRAVEL. 7.8 IN THE CASE OF CIT V. NESTLE INDIA LTD. (SUPRA ) RELIED ON BY THE ASSESSEE- BANK THE ISSUE, IN BRIEF, WAS THAT ON A PERUSAL O F THE ANNUAL RETURN OF THE ASSESSEE, THE ACIT(TDS) NOTICED THAT THE ASSESSEE H AD MADE SHORT DEDUCTION OF TDS WHILE COMPUTING THE INCOME OF ITS EMPLOYEES CHA RGEABLE UNDER THE HEAD SALARIES, THE CONVEYANCE ALLOWANCE (CA)/REIMBURSE MENT GRANTED TO THEM HAD NOT BEEN INCLUDED IN THEIR TAXABLE SALARIES. IN COMPLIA NCE TO THE A.O.S QUERY, THE ASSESSEE, INTER ALIA, EXPLAINED THAT THE CA WAS BEI NG PAID AS REIMBURSEMENT TO THOSE EMPLOYEES WHO HAD NOT BEEN PROVIDED WITH VEHI CLES AGAINST DECLARATION THAT THEY HAD ACTUALLY INCURRED THE SAID AMOUNT FOR THE PURPOSE OF CONVEYANCE ETC., AND, THEREFORE, SUCH EXPENSE WAS EXEMPT U/S. 10(14) OF THE ACT. THE A.O.(TDS) TOOK A DIVERGENT VIEW THAT THE ASSESSEE W AS PAYING SALARIES TO ITS EMPLOYEES UNDER THE GARB OF CA IN ORDER TO AVOID TA XATION AND, ACCORDINGLY, HELD THE ASSESSEE AS AN ASSESSEE IN DEFAULT. WHEN THE ISSUE WENT IN APPEAL BEFORE THE TRIBUNAL WHICH HELD THAT THE ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT CA WAS NOT TAXABLE AND, HENCE, NEITHER ORDER U/S. 201 NOR INTEREST U/S. 201(1A) WAS LEVIABLE. THE STAND OF THE TRIBUNAL WAS CONCURRED BY THE HONBLE HIGH COURT. I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 15 HOWEVER, IN THE PRESENT CASE, THE ASSESSEE-BANK HAD FAILED TO CITE THE PRONOUNCEMENT OF ANY ORDER OF THE JUDICIARY TO DEMO NSTRATE WHY AND HOW IT FORMED THE BELIEF THAT SUCH CONCESSION ON A CIRCUIT OUS ROUTE WAS EXEMPT U/S. 10(5) OF THE ACT. THUS, WE ARE OF THE VIEW THAT TH IS CASE LAW RELIED ON BY THE ASSESSEE-BANK CANNOT BE OF ANY HELP TO IT. 7.9 IN THE CASE OF CIT V.ITC LTD. (SUPRA) RELIED ON BY THE ASSESSEE-BANK THE ISSUE INVOLVED WAS NON-DEDUCTION OF TAX AT SOURCE F ROM THE CONVEYANCE ALLOWANCE (CA) PAID TO ITS EMPLOYEES. THE HONBLE TRIBUNAL A LLOWED THE ASSESSEES CASE AFTER ACCEPTING THE EXPLANATION OF THE ASSESSEE TO BE BONA-FIDE, I.E., THE ASSESSEE HAD AMPLY DEMONSTRATED THAT BELIEF WAS BASED ON A M EETING WITH THE REPRESENTATIVES OF THE ASSESSEE-COMPANY, DECLARATIO NS OBTAINED FROM THE EMPLOYEES ETC. IT WAS ONLY ON THE STRENGTH OF SUCH DEMONSTRATION THAT THE EXPLANATION BEING HONEST, FAIR AND HAVING A BONA-FI DE BELIEF, THE TRIBUNAL ACCEPTED THE ASSESSEES CONTENTION WHICH HAS BEEN S USTAINED BY THE HONBLE HIGH COURT. HOWEVER, IN THE PRESENT CASE, THE ASSESSEE- BANK HAD NOT MADE ANY HONEST EFFORT TO JUSTIFY HOW ITS BONA-FIDE BELIEF W AS FORMED TO EXCLUDE SUCH ALLOWANCE FROM SALARY OF THE EMPLOYEE WAS EXEMPT U/ S. 10(5) OF THE ACT. THIS CASE LAW RELIED BY THE ASSESSEE-BANK IS DISTINGUISH ABLE. 7.10 WE HAVE WITH DUE RESPECTS PERUSED THE RULING OF THE HONBLE SUPREME COURT IN THE CASE OF CIT & ANOTHER V. LARSEN AND TOUBRO L TD. (SUPRA) RELIED ON BY THE ASSESSEE-BANK WHEREIN THE ISSUE BEFORE THE HONBL E COURT WAS THAT THE EMPLOYER IS NOT UNDER ANY STATUTORY OBLIGATION UNDE R THE INCOME-TAX ACT, 1961 OR THE RULES TO COLLECT EVIDENCE TO SHOW THAT THE EMPL OYEE HAD ACTUALLY UTILIZED THE I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 16 AMOUNT PAID TOWARDS LTC OR CONVEYANCE ALLOWANCE U/S . 10(5). HOWEVER, THE PRESENT ISSUE IS: WHETHER THE DEDUCTOR (ASSESSEE-BA NK) WAS RIGHT IN ALLOWING EXEMPTION U/S. 10(5) TO ITS EMPLOYEES FOR TRAVEL OU TSIDE INDIA AND TRAVEL BY A LONG CIRCUITOUS ROUTE WHICH WAS, ACCORDING TO THE A.O., NOT IN ACCORDANCE WITH THE PROVISIONS OF S.10(5) READ WITH RULE 2B? THUS, THE ISSUE BEFORE THE HONBLE COURT (SUPRA) WAS ON A DIFFERENT FOOTING AND HAS NO RELEV ANCE WHATSOEVER TO THE MATTER UNDER CONSIDERATION. THE RULING OF THE HONBLE SUP REME COURT RELIED ON BY THE ASSESSEE-BANK, IN OUR CONSIDERED VIEW, CANNOT COME TO ITS RESCUE. 8. AS RIGHTLY HIGHLIGHTED BY THE HONBLE TRIBUNAL, LU CKNOW BENCH (SUPRA) AND CAREFUL PERUSAL OF THE PROVISIONS OF S.10(5) OF THE ACT, WE ARE OF THE VIEW THAT THE SAID PROVISION WAS INTRODUCED IN ORDER TO MOTIVATE THE EMPLOYEES AND ALSO TO ENCOURAGE TOURISM IN INDIA AND, THEREFORE, THE REIMBURSEMENT OF LTC/L FC WAS EXEMPTED, BUT, THERE WAS NO INTENTION OF THE LEGISLATURE TO ALLOW THE EMPLOYEES TO TRAVEL ABROAD UNDER THE GARB OF BENEFIT OF LTC AVAI LABLE BY VIRTUE OF S.10(5) OF THE ACT . HOWEVER, IN THE PRESENT CASE THE EMPLOYEES OF TH E ASSESSEE-BANK HAVE TRAVELLED OUTSIDE INDIA AND RAIS ED CLAIMS OF THEIR EXPENDITURE INCURRED THEREIN. THERE IS NO DISPUTE THAT THE ASS ESSEE-BANK MAY NOT BE AWARE WITH THE PLAN OF TRAVEL OF ITS EMPLOYEES INITIALLY, HOWEVER, AT THE TIME OF SETTLEMENT OF LTC/LFC BILLS, THE EMPLOYEES SHOULD H AVE PLACED COMPREHENSIVE DETAILS BEFORE THE ASSESSEE-BANK AS TO WHERE THEY H AVE TRAVELLED/VISITED AND RAISED THE CLAIMS, THAT MEANS TO SAY, THE ASSESSEE- BANK WAS WELL AWARE OF THE FACT THAT ITS EMPLOYEES HAVE TRAVELLED IN FOREIGN C OUNTRIES TOO BY AVAILING LTC/LFC FOR WHICH THEY WERE NOT ENTITLED FOR EXEMPTION U/S. 10(5) OF THE ACT. SUCH BEING I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 17 THE SCENARIO, THE ASSESSEE-BANK CANNOT NOW PLEAD TH AT IT WAS UNDER THE BONA-FIDE BELIEF THAT THE AMOUNTS CLAIMED WERE EXEMPT U/S. 10 (5) OF THE ACT. THUS, THE ASSESSING OFFICER(TDS) WAS WITHIN HER DOMAIN TO TER M/CHARGE THAT THE ASSESSEE- BANK WAS UNDER OBLIGATION TO DEDUCT TDS ON SUCH PAY MENTS. SINCE THE ASSESSEE- BANK HAD FAILED TO DO SO, THE A.O.(TDS) HAD RIGHTLY TREATED THE ASSESSEE AN ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT. 9. THE ASSESSEE HAD RELIED ON VARIOUS CASE LAWS FOR T HE PROPOSITION THAT ITS ESTIMATE IS BONA FIDE AND IT CANNOT BE HELD TO BE A N ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT. THIS CONTENTION OF THE ASSESSEE IS WITHOUT LEGAL BASIS, SINCE THE ASSESSEE HAD MADE NO EFFORT TO PROVE HOW ITS BE LIEF WAS FORMED THAT SUCH FOREIGN TRAVEL EXPENSES WOULD COME WITHIN THE AMBIT OF SEC. 10(5) OF THE I.T. ACT. TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE ISSUE AS DELIBERATED UPON IN THE FORE-GOING PARAGRAPHS AND ALSO IN CONFO RMITY WITH THE JUDICIAL VIEWS (SUPRA), WE ARE OF THE VIEW THAT THE AUTHORITIES BE LOW WERE JUSTIFIED IN THEIR STAND WHICH REQUIRES NO INTERFERENCE OF THIS BENCH. IT I S ORDERED ACCORDINGLY. 10. IN THE RESULT , THE ASSESSEE-BANKS APPEALS ARE DISMISSED . PRONOUNCED IN THE OPEN COURT ON 6 TH APRIL,2017. SD/- SD/- (S.JAYARAMAN ) (GEORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: BENGULURU DATED:06.04 , 2017 GJ I.T.A. NO S S .1398 TO 1403/BANG/2016 & 1435 TO 1477/BANG/2016 18 COPY TO: 1. SYNDICATE BANK, REGIONAL OFFICE-1, NO.110, RADHA VITTALA MANSION, R.V. ROAD, V.V.PURAM, BENGALURU. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX (TDS), CIRCLE-18(2), BENGALURU. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-13, BENG ALURU. 4. THE COMMISSIONER OF INCOME-TAX(TDS), BENGALURU. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTR AR) I.T.A.T., BENGALURU