STATE BANK OF INDIA - CORPORATE CENTRE, MUMBAI V. DCIT (TDS)-2(2), MUMBAI

ITA 1526/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3190 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA
• Keywords: Salary income; Benefit of exemption; TDS
• Section: 133A; 201(1); 201; 192; 72; 13; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 1526 /MUM/2019 ASSESSMENT Y EAR: 2010 - 11 & ITA NO. 1527/MUM/2019 ASSESSMENT Y EAR: 2011 - 12 STATE BANK OF INDIA CORPORATE CENTRE, 2 ND FLOOR, OFFICE ADMINISTRATION DEPARTMENT, STATE BANK BHAWAN, MADAM CAMA ROAD, NARIMAN POINT, MUMBAI - 400021 PAN: AAACS8577K VS. DEPUTY COMMISSIONER OF INCOME TAX (TDS) - 2(2), K.G. MITTAL AYURVEDI C HOSPITAL BLDG, CHARNI ROAD (W), MUMBAI - 400002 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NITESH JOSHI (A R) REVENUE BY : SHRI T.S. KHALSA (D R ) DATE OF HEARING : 30 /09 /202 1 DATE OF PRONOUNCEMENT: 12 / 10 /202 1 O R D E R PER SAKTIJIT DEY , JM CAPTIONED APPEALS BY THE SAME ASSESSEE ARISE OUT OF TWO SEPARATE ORDERS , BOTH DATED 10.12.2018 , OF LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - 60 , MUMBAI UPHOLDING THE ORDERS PASSE D BY THE ASSESSING OFFICER UNDER SECTION 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1961 IN THE MATTER OF WITHHOLDING OF TAX FOR THE ASSESSMENT YEAR S 2010 - 11 AND 2011 - 12 . 2. THE COMMON GROUND RAISED BY THE ASSESSEE IN BOTH THE APPEALS READ AS UNDER: - 2 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 1. OR DER UNDER SECTION 201(1) AND 201(1A) BARRED BY LIMITATION 1.1. THE LEARNED CIT(A) ERRED IN NOT HOLDING THAT THE ORDER UNDER SECTION 201(1) AND 201(1A) IS BARRED BY LIMITATION AND HENCE, VOID - AB - INITIO. 1.2. THE LEARNED CIT(A) ERRED IN HOLDING THAT PROVISIO NS OF SECTION 201(3), AS AMENDED BY FINANCE ACT, 2014, ARE RETROSPECTIVE IN NATURE AND APPLIES TO THE CAPTIONED ASSESSMENT YEAR. 1.3. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT FOR THE PURPOSE OF THE TIME LIMIT MENTIONED IN SECTION 201(3), THE DATE OF FILING THE ORIGINAL TDS RETURNS ARE RELEVANT AND NOT THE CORRECTION STATEMENT. 1.4. THE CIT(A) ERRED IN NOT APPRECIATING THAT SECTION 201(3) REFERS TO STATEMENT AND NO REFERENCE IS MADE TO CORRECTION STATEMENT. FURTHER, THE LEARNED DCIT HAD HELD T HE APPELLANT TO BE ASSESSEE IN DEFAULT ON THE BASIS THAT TDS IS NOT DEDUCTED ON LFC PAID BY REFERRING TO ORIGINAL STATEMENT AND NOT CORRECTION STATEMENTS. 1.5. THE LEARNED CIT(A) ERRED IN MAKING THE FOLLOWING O BSERVATIONS/ HOLDING AS UNDER: ALL THE OP ERATIONAL SECTIONS AS PER LEGAL PROVISIONS WILL BE APPLIED DE NOVO ON THIS CORRECTION STATEMENT. HENCE, FOR ALL PURPOSES, THE CORRECTION STATEMENT FILED IS AS GOOD AS AND EQUIVALENT TO A STATEMENT FILED U/S 200(3) OF THE ACT. ONCE A CORRECTION STATEMENT I S FILED THE INEVITABLE EFFECT IS THAT, IT PARTAKES THE CHARACTER OF STATEMENT FILED U/S 200(3). IN ALL SUCH CASES, THE STATEMENTS / CORRECTION STATEMENTS ARE LIABLE TO BE PROCESSED AND SCRUTINIZED. IN FACT, ALL THE PROCEEDINGS ON SUCH CORRECTION STATEMENTS FILED WILL TAKE PLACE SUBSEQUENTLY AS IS NORMALLY TAKEN IN CASES WHERE THE ORIGINAL STATEMENT ARE FILED. THE ABOVE OBSERVATIONS ARE WITHOUT ANY BASIS AND ARE CONTRARY TO THE FACTS OF THE CASE. THE APPELLANT OBJECTS TO THESE OBSERVATIONS / CONCLUSIONS. 2. LEAVE FARE CONCESSION 2.1. LFC INVOLVING EN - ROUTE FOREIGN TRAVEL 2.1.1. THE LEARNED CIT(A) ERRED IN HOLDING THE APPELLANT AS ASSESSE IN DEFAULT ON ACCOUNT OF NON - DEDUCTION OF TAX AT SOURCE IN RESPECT OF LEAVE FARE CONCESSION [LFC] PROVIDED BY THE A PPELLANT TO ITS EMPLOYEES AMOUNTING TO RS. 1,59,62,048 3 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 IN CASES WHERE LFC WAS PAID BY THE SHORTEST ROUTE FOR A JOURNEY WHERE THE DESIGNATED PLACE WAS IN INDIA BUT THE SAME ALSO INVOLVED SOME EN - ROUTE FOREIGN TRAVEL BEING UNDERTAKEN BY THE EMPLOYEE 2.1.2. T HE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE BENEFIT OF EXEMPTION UNDER SECTION 10(5) IS AVAILABLE TO THE APPELLANTS EMPLOYEES EVEN IN CASES WHERE THE JOURNEY UNDERTAKEN BY AN EMPLOYEE INVOLVES A FOREIGN LEG, BUT WHERE THE EMPLOYEE'S DESIGNATED P LACE IS IN INDIA AND HE ACTUALLY VISITS THE PLACE AS DESIGNATED. 2.1.3 THE LEARNED CIT(A) ERRED IN RELYING ON THE CIRCULAR NO. 8/2012 [F.NO. 275/192/2012 1T(B)] DATED 5 OCTOBER 2012 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOSE OF TAX DEDUCT ION ON SALARY PAYMENTS FOR FINANCIAL YEAR 2012 - 13 FOR THE CAPTIONED ASSESSMENT YEAR. 2.1. 4 . THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE APPELLANT PROVIDED EXEMPTION UNDER SECTION 10(5) ONLY WHEN THE EMPLOYEES DESIGNATED PLACE IS IN INDIA AND H E ACTUALLY VISIT THE PLACE AS DESIGNATED. FURTHER, EVEN IN CASES WHERE THE EMPLOYEE TRAVELS OUTSIDE INDIA DURING THE COURSE OF HIS TRAVEL TO A PLACE IN INDIA, THE EXEMPTION UNDER SECTION 10(5) IS RESTRICTED FOR TRAVEL WITHIN INDIA. FURTHER, ALL CONDITIONS UNDER SECTION 10(5) AND RULE 2B ARE SATISFIED. 2.1.5. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT IF AT ALL THE LFC PAYMENTS INVOLVING A FOREIGN LEG ARE TO BE HELD AS TAXABLE, THE EMPLOYEE IS ENTITLED FOR EXEMPTION UNDER SECTION 10(5) TO THE EXTEN T OF EXPENSES INCURRED FOR TRAVEL IN INDIA WHERE THE EMPLOYEE'S DESIGNATED PLACE IS IN INDIA AND HE ACTUALLY VISITS THE PLACE AS DESIGNATED. 2.2 LFC INVOLVING DOMESTIC TRAVEL BY CIRCUITOUS ROUTE 2.2. 1. THE LEARNED CIT(A) ERRED IN CARRYING OUT ENHANCEMENT OF ASSESSMENT UNDER SECTION 251(1)(A) AND HOLDING THE APPELLANT AS ASSESSEE IN DEFAULT IN RELATION TO CLAIM OF EXEMPTION OF LFC PAID TO EMPLOYEES WHO HAVE UNDERTAKEN DOMESTIC TRAVEL. 2.2.2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APPELLANT HAS SUBMI TTED THAT OUT OF THE TOTAL DOMESTIC JOURNEY CLAIM OF RS. 79,85,883, RS. 52,79,750 IS THE AMOUNT OF DOMESTIC JOURNEY CLAIM WHERE THE CIRCUITOUS JOURNEY IS NOT PERFORMED BY THE SHORTEST ROUTE. 4 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 IT IS SUBMITTED THAT THE AMOUNT OF EXEMPTION PROVIDED TO THE EMP LOYEES UNDER SECTION 10(5) IS AFTER CONSIDERING THE SHORTEST ROUTE TO THE DESIGNATED DESTINATION. 2.2.3. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE SHORTEST ROUTE IS A CRITERION TO BE TAKEN INTO ACCOUNT FOR CALCULATION OF THE MAXIMUM AMOUNT O F EXEMPTION AND NOT FOR THE ENTITLEMENT OF EXEMPTION FROM INCOME - TAX ITSELF. 3. BONA FIDE BELIEF 3.1 THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE APPELLANT WAS OF THE BONA FIDE BELIEF THAT IT WAS NOT LIABLE TO DEDUCT TAX AT SOURCE IN RESPECT OF L FC PROVIDED TO EMPLOYEES, AND ACCORDINGLY THE APPELLANT CANNOT BE HELD TO BE AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SECTION 201 AND 201(1A). 4. EACH ONE OF THE ABOVE GROUNDS OF APPEAL IS WITHOUT PREJUDICE TO THE OTHER. 3. BRIEFLY THE FACTS ARE, T HE ASSESSEE BEFORE US IS A BRANCH OF THE LARGEST PUBLIC SECTOR B ANKING COMPANY IN INDIA VIZ. STATE BANK OF INDIA. IN COURSE OF A SURVEY CONDUCTED UNDER SECTION 133A OF THE ACT TO VERIFY WHETHER THE ASSESSEE HAS COMPLIED WITH THE TAX WITHHOLDING PROVISIONS REGARDING SALAR IES/PERKS PAID TO THE EMPLOYEES, THE ASSESSING (AO) FOUND THAT CER TAIN EMPLOYEES HAVE CLAIMED LEAVE FARE CONCESSION (LFC) FACILITY, WHEREIN , TRAVEL TO PLACES EVEN OUT SIDE INDIA WAS INVOLVED. IT WAS NOTICED BY THE AO THAT SOME OF THE EMPLOYEE S HAVE TAKEN CIRCUITOUS ROUTE TO ONE OR MORE DESTINATION IN INDIA EVEN INVOLVING TRAVEL ABROAD . BEING OF THE VIEW THAT LFC PROVIDED TO THE CONCERNED EMPLOYEES WAS WRONGLY TREATED AS EXEMPT FROM TAXATION UNDER SECTION 10(5) OF THE ACT AND NO TAX WAS DEDUCTE D ON SUCH PA YMENTS TO THE EMPLOYEES, T HE AO PROCEEDED TO PASS ORDER S UNDER SECTION 201( 1) AND 201(1A) OF THE ACT RAISING THE FOLLOWING DEMANDS. 5 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 ASSESSMENT YEAR : 2010 - 11 RS. 1,37,16,521/ - ASSESSMENT YEAR: 2011 - 12 RS. 1,71,29,855/ - 4. AGAINST THE AFORESAI D ORDERS PASSED UNDER SECTION 201(1)/201(1A) OF THE ACT, ASSESSEE PREFERRED APPEAL S BEFORE LEARNED COMMISSIONER (APPEALS). HOWEVER, BY THE IMPUGNED ORDERS LEARNED COMMISSIONER (APPEALS) , BY AND LARGE , HAS UPHELD THE DECISION OF THE AO. OF COURSE, LEARNED C OMMISSIONER (APPEALS) HAS GRANTED PARTIAL RELIEF TO THE ASSESSEE TO THE EXTENT OF REDUCING THE DEMAND RAISED BY THE AO BY REDUCING AN AMOUNT OF RS. 27,06,133/ - IN ASSESSMENT YEAR 2010 - 11. 5. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED , THE ISSUE IS SQUARELY COVERED BY THE ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 2008 - 09 AND 2012 - 13. IN THIS REGARD, HE DREW OUR ATTENTION TO THE RELEVANT OBSERVATIONS OF THE TRIBUNAL. FURTHER, HE RELIED UPON THE FOLLOWING DECISION: 1. CIT V. ON KARMAL MEGHRAJ (HUF) (1974) 93 ITR 233 (SUPREME COURT) 2. ORACLE INDIA PVT. LTD. V. DCIT (2016) 72 TAXMANN.COM 138 (SUPREME COURT) 3. ORACLE INDIA PVT. LTD. V. DCIT(2015) 376 ITR 411 (DELHI HIGH COURT) 4. ORACLE INDIA PVT. LTD. V. DCIT (WRIT PETITION (C) NO. 2061 O F 2014) (DELHI HIGH COURT. 5. TATA TELESERVICES V. UNION OF INDIA (2016) 385 ITR 497 (GUJARAT HIGH COURT). 6. NOIDA POWER COMPANY LTD. V. CIT (WRIT TAX NO. 150 OF 2016) (ALLAHABAD HIGH COURT). 6 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 7. LEARNED DEPARTMENTAL REPRESENTATIVE , THOUGH , FAI RLY SUBMITTED TH AT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE. HOWEVER, HE SUBMITTED THAT THE FACT , WHETHER THE ASSESSEE HAS PAID LFC FOR THE SHORTEST ROUTE IS NOT FORTHCOMING EITHER FROM THE ORDERS OF THE AO OR LEARNED COMMISSIONER (APPEA LS). DRAWING OUR ATTENTION TO STATEMENT OF FACT S FILED BEFORE LEA RNED COMMISSIONER (APPEALS), LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT LFC WAS PAID TO THE EMPLOYEES FOR THE SHORTEST ROUTE BY THE ENTITLED CLASS TO THE DESTINATION IN INDIA. 8 . WE HAV E CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. IT IS OBSERVED , IDENTICAL DISPUTE REGARDING NON WITHHOLDING OF TAX ON LFC PAID TO EMPLOYEES CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BE NCH IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 2008 - 09 AND 2012 - 13. WHILE DECIDING THE ISSUE, THE TRIBUNAL HAS HELD AS UNDER: - 3. WHEN THESE APPEALS WERE TAKEN UP FOR HEARING, LEARNED REPRESENTATIVE FAIRLY AGREED THAT THE ISSUE IN APPEAL IS NOW COVERED, IN FAVOUR OF THE ASSESSEE, BY A COORDINATE BEN CH DECISION IN ASSESSEES OWN CASE {ALSO REPORTED AT STATE BANK OF INDIA VS ACIT [(2021) 123 TAXMANN.447 (MUM)]} WHEREIN THE COORDINATE BENCH HAS, INFER ALIA, OBSERVED AS FOLLOWS: 7. AS WE PROCEED TO ADJUDICATE ON CONNECTION OF THE IMPUGNED DEMANDS, IT IS IMPORTANT TO BEAR IN MIND WHILE DEALING WITH THE DEMANDS RELATING TO A TAX DEDUCTION OF AT SOURCE FROM PAYMENTS OF SALARIES THAT THERE IS A SUBTLE LINE OF DEMARCATION BETWEEN WHAT IS TAXABLE IN THE HANDS OF THE ASSESSEE AND WHAT IS THE AMOUNT OF ESTIMATED INCOME IN RESPECT OF WHICH TAX IS REQUIRED TO BE DEDUCTED AT SOURCE BY THE EMPLOYER. SECTION 192 (1), WHICH IMPOSES TAX WITHHOLDING OBLIGATIONS ON THE EMPLOYERS IN RESPECT OF PAYMENTS FOR SALARIES, REQUIRES THAT TAX DEDUCTION IS MADE BY THE EMPLOYER 'ON T HE ESTIMATED INCOME OF THE ASSESSEE UNDER THIS HEAD ( I.E. INCOME FROM SALARIES) FOR THAT FINANCIAL YEAR', THUS, THE TAX WITHHOLDING OBLIGATION IS CLEARLY IN RESPECT OF ESTIMATED INCOME OF THE ASSESSEE' AND NOT IN 7 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 RESPECT OF 'TAXABLE INCOME OF THE ASSESSEE '. THE MERE FACT OF TAXABILITY OF A PAYMENT IN NOT IN RESPECT OF TAXABLE INCOME THE HANDS OF AN ASSESSEE UNDER THIS HEAD. CLEARLY, THEREFORE, TAXABILITY OF AN INCOME, IN THE HANDS OF THE EMPLOYEE CONCERNED, UNDER THE HEAD' INCOME FROM SALARIES PER SE IS THUS NOT SUFFICIENT TO INVOKE THE TAX WITHHOLDING OBLIGATIONS OF THE EMPLOYER. THERE CAN BE SITUATIONS IN WHICH THE EMPLOYER GENUINELY AND REASONABLY ESTIMATES INCOME OF THE EMPLOYEES UNDER THE HEAD SALARIES, AND YET ACTUAL TAXABILITY OF INCOME UNDER THE HEAD SALARIES OF THE RELATED EMPLOYEES MAY BE HIGHER THAN EMPLOYER'S ESTIMATION. THEREFORE, WHILE EXAMINING THE QUESTION AS TO WHETHER THE EMPLOYER HAS PROPERLY DISCHARGED HIS DUTIES UNDER SECTION 192, ALL THAT IS TO BE SEEN IS WHETHER THE EMPLOYER HAS REA SONABLY, OR BONAFIDE, ESTIMATED THE INCOME OF THE EMPLOYEES AND DEDUCTED TAX IN RESPECT OF SUCH ESTIMATED INCOME. AS LONG AS THE CONDUCT OF THE EMPLOYER IN THIS EXERCISE IS BONAFIDE, HE CAN NNOT BE SAID TO BE WANTING IN HIS CONDUCT UNDER SECTION 192. EXPLAI NING THIS LEGAL POSITION , IN THE OFT - QUOTED LANDMARK JUDGMENT IN THE CASE OF CIT V. GWALIOR RAYON & SILK MILLS L TD. [(1983) 140 ITR 832 (MP)], HON'BLE MADHYA PRADESH HIGH COURT JUDGMENT HAS, INTER ALIA, OBSERVED THAT, 'A DUTY IS CAST ON AN EMPLOYER TO FOR M AN OPINION ABOUT THE TAX LIABILITY OF HIS EMPLOYEE IN RESPECT OF THE SALARY INCOME. WHILE FORMING THIS OPINION, THE EMPLOYER IS UNDOUBTEDLY EXPECTED TO ACT HONESTLY AND FAIRLY. BUT IF IT IS FOUND THAT THE ESTIMATE MADE BY THE EMPLOYER IS INCORRECT, THIS FACT ALONE, WITHOUT ANYTHING MORE, WOULD NOT INEVITABLY LEAD TO THE INFERENCE THAT THE EMPLOYER HAS NOT ACCEPTED HONESTLY AND FAIRLY. UNLESS THAT INFERENCE CAN BE REASONABLY RAISED AGAINST AN EMPLOYER, NO FAULT CAN BE FOUND WITH HIM. IT CANNOT BE HELD THAT HE HAS NOT DEDUCTED TAX ON THE ESTIMATED INCOME OF THE EMPLOYEE'. WE HUMBLY BOW TO THE LAW SO LAID DOWN BY THEIR LORDSHIPS, AND THIS, IN OUR HUMBLE UNDERSTANDING, THE C ORRECT AND APPLICABLE L EGAL POSITION CONSISTENTLY FOLLOWED BY SEVERAL COORDINATE BENCHE S OF THIS TRIBUNAL. THERE IS NOT EVEN A WHISPER OF DISSENT ON THIS POINT. IT IS IN THIS LIGHT THAT WE HAVE, THEREFORE, PROCEED FURTHER. THE QUESTION THAT WE NEED TO, THEREFORE, ADDRESS IS WHETHER THE ACTION OF THE EMPLOYER IN NOT DEDUCTING TAX AT SOURCE FR OM THE LEAVE TRAVEL FACILITY IN QUESTION COULD BE SAID TO BE REASONABLE OR BONAFIDE. LET US, IN THIS BACKDROP, TAKE A LOOK AT THE RELATED LEGAL PROVISIONS UNDER SECTION 10(5) READ WITH RULE 2 B: SECTION 10(5)EXEMPTION IN RESPECT OF LEAVE TRAVEL CONCESSION 10. 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 8 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 ** ** (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 CONCESSI ON OR ASSISTANCE GRANTED TO THE EMPLOYEES OF THE CENTRAL GOVERNMENT; 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 (REMAINING STATUTORY PROVISION NOT REPR ODUCED AS IT IS NOT CONSIDERED TO BE RELEVANT FOR THE PRESENT DISCUSSION) CONDITIONS FOR THE PURPOSE OF SECTION 10(5) AS PRESCRIBED UNDER RULE 2 B OF THE INCOME - TAX RULES, 1962 2B. (1) THE AMOUNT EXEMPTED UNDER CLAUSE (5) OF SECTION 10 IN RESPECT OF TH E V ALUE 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 RETIREM ENT 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 IST 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; (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 THE REOF ARE NOT CONNECTED BY RAIL AND THE JOURNEY IS PERFORMED ON OR AFTER THE IST DAY OF OCTOBER, 1997, BETWEEN SUCH PLACES, THE AMOUNT ELIGIBLE FOR EXEMPTION SHALL BE: - 9 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 (A) WHERE A RECOGNISED PUBLIC TRANSPORT SYSTEM EXISTS, AN AMOUNT NOT EXCEEDING THE IST C LASS OR DELUXE CLASS FARC, 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 DIST ANCE OF THE JOURNEY BY THE SHORTEST ROUTE, AS IF THE JOURNEY HAD BEEN PERFORMED BY RAIL. (REMAINING STATUTORY PROVISION NOT REPRODUCED AS IT IS NOT CONSIDERED TO BE RELEVANT FOR THE PRESENT DISCUSSION) 8. A PLAIN READING OF THE ABOVE PROVISIONS DOES NOT INDICATE ANY REQUIREMENT OF TAKING THE SHORTEST ROUTE FOR TRAVELLING TO AN Y PLACE IN INDIA OR PUTTING ANY KIND OF RESTRICTIONS THE ROUTE TO BE ADOPTED FOR GOING TO SUCH A DESTINATION. QUITE TO THE CONTRARY, THE STATUTORY PROVISIONS DO ENVISAG E THE POSSIB ILITIES OF SOMEONE TAKING A ROUTE OTHER THAN THE SHORTEST ROUTE, AS IS IMPLICIT IN THE RESTRICTION THAT 'AN AMOUNT NOT EXCEEDING THE AIR ECONOMY FARE OF THE NATIONAL CARRIER BY THE SHORTEST ROUTE TO THE PLACE OF DESTINATION' WILL ONLY BE ELIGIBLE FOR EXEMP TION UNDER SECTION 10(5). WHAT IS ESSENTIALLY IMPLIES, TO GIVE A SIMPLE IS THAT IF SOMEONE IS BASED IN MUMBAI AND HE DECIDES TO GO TO DELHI VIA LET US SAY, LUCKNOW, KOLKATA, OR CHENNAI, THE AMOUNT ADMISSIBLE FOR EXEMPTION UNDER SECTION 10(5) WILL BE RESTRI CTED TO THE PRICE OF DIR ECT FLIGHTS BETWEEN MUMBAI AND DELHI ON THE NATIONAL CARRIER. THIS PROPOSITION IS NOT EVEN DISPUTED BY THE INCOME TAX DEPARTMENT. THE QUESTION, HOWEVER, ARISES WHETHER WHEN THE SAME PERSON GOES TO DELHI, VIA DUBAI , THE EXEMPT L EAVE TRAVEL CONCESSION BEING RESTRIC TED TO THE PRICE OF MUMBAI DELHI DIRECT F IGHT. OF COURSE, THE STAND OF THE INCOME TAX DEPARTMENT IS TH AT EVEN THE COST OF THE DIRECT FLI GHT FROM MUMBAI TO DELHI, ON THE NATIONAL CARRIER ASSUMING THAT IT IS LESS THAN MUMBAI - DU BAI - DELHI AIRFARE, WILL NOT BE ADMISSIBLE LEAVE TRAVEL ASSISTANCE EXEMPTION IN SUCH A CASE. THAT IS THE APPROACH A PPROVED BY THE COORDINATE BENCHES AS WELL, AND, THEREFORE, WE NEED NOT QUESTION THAT AT THIS STAGE. THE RELEVANT QUESTION, HOWEVER, IS NOT THE ACTUAL STATUS OF TAXATION; THE RELEVANT QUESTION IS WHETHER THE ASSESSEE EMPLOYER COULD BE SAID TO UNREASONABLE OR MALAFIDE IN PROCEEDING ON THE BASIS THAT IN SUCH A SITUATION ALSO, THE COST OF A DIRECT FLIGHT BETWEEN MUMBAI DELHI ON NATIONAL AIRLINES WIL L BE AVAILABLE FOR EXEMPTION UNDER SECTION 10(5). WHEN WE LOOK AT THE DETAILED STATEMENT OF FACTS, EXTRACTS FROM WHICH HAVE BEEN EXTENSIVELY REPRODUCED BY US EARLIER IN THIS ORDER, WE DO NOT FIND ANYTHING WRONG OR UNREASONABLE IN THE CONDUCT OF THE ASSESSE E EMPLOYER. THERE IS NO SPECIFIC BAR IN THE - JAW F THE TRAVEL, ELIGIBLE FOR EXEMPTION UNDER SECTION 10(5), INVOLVING A SECTOR OF AS TRAVEL, AND, IN THE ABSENCE OF SUCH A BAR, 10 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 THE ASSESSEE EMPLOYER CANNOT BE FAULTED FOR NOT INFERRING SUCH A BAR. THE REIMBU RSEMENT IS RESTRICTED TO AIRFARE, ON THE NATIONAL CARRIER, BY THE SHORTEST ROUTE AS IS THE MANDATE OF RULE 2B. THE EMPLOYEE HAS ACTUALLY TRAVELLED, AS A PART OF THAT COMPOSITE ITINERARY INVOLVING A FOREIGN SECTOR AS WELL, TO THE DESTINATION IN INDIA. THE G UIDANCE AVAILABLE TO THE ASSESSEE EMPLOYER INDICATES THAT, IN SUCH A SITUATION, THE EXEMPTION UNDER SECTION 10(5) IS AVAILABLE TO THE EMPLOYEE THOUGH TO THE EXTENT OF FARTHEST INDIAN DESTINATION BY THE SHORTEST ROUTE, AND THAT IS WHAT THE ASSESSEE EMPLOYER HAS ALLOWED. IN THE LIGHT OF THIS ANALYSIS OF THE LEGAL POSITION AND THE FACTUAL BACKDROP, WHATEVER MAY BE THE POSITION WITH RESPECT OF TAXABILITY OF SUCH A LEAVE TRAVEL CONCESSION IN THE HANDS OF THE EMPLOYEE, THE ASSESSEE EMPLOYER CANNOT BE FAULTED FOR MOT DEDUCTING TAX AT SOURCE FROM THE LEAVE TRAVEL CONCESSION FACILITY ALLOWED BY HIM TO THE EMPLOYEES. AS WE HOLD SO, WE MAY ADD THAT WE HAVE NOT REALLY ADDRESSED OURSELVES TO THE LARGER QUESTION WITH RESPECT TO THE ACTUAL TAXABILITY OF THIS LEAVE TRAVEL C ONCESSION IN THE HANDS OF THE EMPLOYEES CONCERNED, EVEN THOUGH WE HAVE OUR PRIMA FACIE RESERVATIONS ON THE COORDINATE BENCHES DECISIONS HOLDING TAXABILITY OF THESE AMOUNTS IN THE HANDS OF THE EMPLOYEES CONCERNED, BECAUSE THAT ASPECT OF THE MATTER IS NOT RE ALLY RELEVANT AS ON NOW. WE LEAVE IT AT THAT FOR THE TIME BEING. THE COORDINATE BENCH DECISIONS DEAL WITH ONLY THE ISSUE OF TAXABILITY OF LEAVE TRAVEL FACILITY UNDER SECTIO N 10(5) AND NOT WITH THE BROADER QUESTION ABOUT THE NATURE OF TAX DEDUCTION AT SOURC E LIABILITY UNDER SECTION 192, AS ALSO THE ISSUE ABOUT BONAFIDES OF THE STAND OF THE ASSESSEE EMPLOYER. THESE DECISIONS, THEREFORE, DO NOT COME IN THE WAY OF OUR PRESENT DECISION. ONCE WE HOLD, AS WE DO IN THIS CASE, THAT ESTIMATION OF INCOME, IN THE HANDS OF THE EMPLOYEES UNDER THE HEAD INCOME FROM SALARIES', BY THE EMPLOYER WAS BONAFIDE AND REASONABLE, THE VERY FOUNDATION OF IMPUGNED DEMANDS RAISED UNDER SECTION 201 R.W.S 192 CEASES TO HOLD GOOD IN LAW. WE MUST, THEREFORE, VACATE THESE DEMANDS. 4. WE SE E NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCH. A COPY OF THE SAID ORDER IS DEEMED TO BE ATTACHED TO, AND FORMING PART OF, THIS ORDER AS WELL. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE PLEA OF THE ASSE SSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DEMANDS RAISED UNDER SECTION 201 R.W.S. 192. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. THE ASSESSEE HAS ALSO RAISED SOME PERIPHERAL LEGAL ISSUES, INCLUDING THE ISSUES WITH RESPECT TO THE IMPUGNED ORDERS BEING TIME BARRED BUT GIVEN THE FACT THAT THE CORE ISSUE HAS BEEN, AS DECIDED, IN FAVOUR OF THE ASSESSEE, IT 1S NOT REALLY NECESSARY TO DEAL WITH THESE PERIPHERAL ISSUES. 11 ITA NO S . 1526 & 1527 / MUM/2019 ASSESSMENT YEAR S : 2010 - 1 1 & 2011 - 12 9 . MATERIAL FACTS INVOLVED IN THE IMPUGNED ASSESSMENT YEAR S BEING IDENTIC AL , RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH AS REFERRED TO ABOVE, WE DELETE THE DEMAND RAISED BY THE AO AND SUSTAINED BY LEARNED COMMISSIONER (APPEALS). AT THIS STAGE, WE MUST OBSERVE , THE PRINCIPLE LAID DOWN BY COORDINATE BENCH WOULD A LSO APPL Y TO THE ISSUE RAISE IN GROUND N O. 2.2 OF THESE APPEALS. 10 . IN VIEW OF OUR DE CISION ABOVE GROUND NO. 1 HAVING BECOME INFRUCTUOUS, T HERE IS NO NEED FOR ADJUDICATION. 11 . IN THE RESULT, APPEAL S ARE ALLOWED AS INDICATED ABOVE. ORDER PR ONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER , 2021 . SD/ - SD/ - ( M. BALAGANESH ) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 12 / 10 /202 1 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI