STATE BANK OF BIKANER AND JAIPUR, Jaipur V. ACIT, Jaipur

ITA 164/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2159 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 24-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: NEELAM ASHOK
• Section: 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 164/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. STATE BANK OF INDIA, JAIPUR ADMIN OFFICER I, A-5 NEHRU PLACE, TONK ROAD, JAIPUR, RAJASTHAN. CUKE VS. THE ASSTT. COMMISSIONE R OF INCOME TAX (TDS), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. JPRS08235D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SMT. NEELAM ASHOK (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.04.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27 /04/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-3, JAIPUR DATED 18.11.2015 PERTAINING TO A.Y. 2012-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL :- THE BANK OBJECTS TO THE ORDER U/S 201(1) READ WITH 201(1A) DATED 18.11.2015 RECEIVED ON 01.01.2016 PASSED BY THE COM MISSIONER OF INCOME TAX APPEALS-3 FOR THE AFORESAID ASSESSMENT YEAR ON THE FOLLOWING AMONG OTHER GROUNDS: 1. THE ORDER OF THE LD. CIT, ON ASPECTS AGITATED IN TH IS APPEAL, IS BAD IN LAW, CONTRARY TO THE PROVISIONS OFF LAW AND FACTS OF THE CASE AND WITHOUT APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN THEIR RIGHT PERSPECTIVE. 2. THE LD. CIT ERRED IN PASSING AN ORDER UNDER SECTION 201(1) /201(1A) AND IN RAISING DEMAND OF RS. 10,29,292 (I.E. TAX OF RS. 7,70,720 AND INTEREST OF RS. 2,58,292) ON THE BASIS THAT TAX WAS NOT DEDUCTE D AT SOURCE ON PAYMENT OF LEAVE TRAVEL CONCESSION. 2 ITA NO. 164/JP/2016 STATE BANK OF INDIA, JAIPUR. 3. THE LD. CIT ERRED IN NOT APPRECIATING THAT THE BENE FIT OF LEAVE TRAVEL CONCESSION IS AVAILABLE TO THE BANKS EMPLOYEE EVEN IN CASES WHERE THE JOURNEY UNDERTAKEN BY AN EMPLOYEE INVOLVES A FOREIG N LEG BUT THE EMPLOYEES DESIGNATED PLACED IS IN INDIA AND HE ACT UALLY VISITS THE PLACE AS DESIGNED. 4. THE LD. CIT ERRED IN MAKING THE FOLLOWING OBSERVATI ON, HOLDING AS UNDER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , FINDINGS OF THE AO AND SUBMISSION OF THE APPELLANT. IN LIGHT OF ABOVE MY FINDINGS AR E AS UNDER:- I FIND THAT EXPENSE ALLOWED BY THE BANK TO 16 EMPLO YEES FOR TRAVEL OUT OF INDIA (AS PART OF LTC) IS NOT COVERED BY EXEMPTION UNDER 10(5). EXEM PTION WAS ALLOWED BY THE BANK BY TREATING THE NOTIONAL EXPENSES ON SHORTEST ROUTE IN INDIA EVEN THOUGH THE EMPLOYEES DID NOT RAVEL THERE AT ALL. IN FACT THEY TRAVELED OUTSI DE THE COUNTRY WHICH IS NOT ELIGIBLE FOR EXEMPTION U/S 10(5) AT ALL THE TDS SHOULD NATURALLY BE DEDUCTED ON THE SAME. SINCE THE ASSESSEE FAILED TO DEDUCT THE TDS ON THE SAME, AO R IGHT RAISED DEMAND U/S 201(1) AND INTEREST U/S 201(1A). ACCORDINGLY APPEAL IS DISMIS SED. THE ABOVE OBSERVATIONS ARE WITHOUT ANY BASIS AND AR E CONTRARY TO THE FACTS OF THE CASE. THE APPELLANT OBJECTS TO THESE OBSERVATIONS/CONCLUSIONS. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT ERRED I N NOT APPRECIATING THE BONA FIDE BELIEF OF THE BANK IN GRANTING BENEFIT OF LEAVE TRAVEL CONCESSION PAID TO THE BANKS EMPLOYEES WHO TRAVELLED OUT OFF INDIA AND HELD THE BANK TO BE AS ASSESSEE IN DEFAULT. 6. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT ERRED I N NOT APPRECIATING THAT THE EMPLOYEE IS ENTITLED TO EXEMPTION UNDER SECTION 10(5) TO THE EXTENT OF EXPENSES INCURRED FOR TRAVEL IN INDIA WHERE THE EMP LOYEES DESIGNATED PLACE IS IN INDIA AND HE ACTUALLY VISITS THE PLACE AS DESIGNATED EVEN IN CASES WHERE THE JOURNEY UNDERTAKEN BY AN EMPLOYEE I NVOLVES A FOREIGN LEG. 7. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT ERRED I N APPLYING A FLAT RATE OF 30% FOR COMPUTATION OF TDS INSTEAD OF APPLYING THE ACTUAL INCOME-TAX RATE APPLICABLE CASE OF EACH EMPLOYEE. 8. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT ERRED I N COMPUTING INTEREST FOR A PERIOD OF 35 MONTHS (I.E. FROM 1 APRIL 2011 TO 28 FEBRUARY 2014) INSTEAD 3 ITA NO. 164/JP/2016 STATE BANK OF INDIA, JAIPUR. OF CONSIDERING THE ACTUAL DATE OF PAYMENT OF THE LT C IN CASE OF EACH EMPLOYEE. 9. THE LD. CIT ERRED IN NOT APPRECIATING THE SUBMISSIO NS MADE BY THE BANK IN THE CORRECT PERSPECTIVE. 10. EACH ONE OF THE ABOVE GROUNDS OF APPEAL IS WITHOUT PREJUDICE TO THE OTHER. 11. THE BANK RESERVES THE RIGHT TO AMEND, ALTER OR ADD TO THE GROUNDS OF APPEAL. 2. AT THE OUTSET, LD. REPRESENTATIVES POINTED OUT T HAT IDENTICAL GROUNDS WERE RAISED IN ASSESSEES APPEAL PERTAINING TO THE ASSES SMENT YEAR 2013-14 AND 2014-15 IN ITA NO. 145/JP/2017 AND ITA NO. 146/JP/2017. THI S FACT IS DULY CONCEDED BY THE LD. COUNSEL FOR THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEAL PERTAINING TO THE SUBSEQUENT YEARS HAVE BEEN DECIDED BY THIS HONBLE TRIBUNAL VIDE ORDER DATED 28/03/2017. BOTH THE PARTIES HAVE AGREED THAT THE FACTS ARE IDENTICAL IN THIS YEAR AS WELL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CO-ORDINATE BENCH OF THIS HONBLE TRIB UNAL IN ITA NO. 145/JP/2017 HAS DECIDED THE ISSUE BY OBSERVING AS UNDER:- 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS OF THE CASE ARE PAR I-MATERIA WITH THE DECISION OF THE CO-ORDINATE BENCH IN CASE OF SBI VS DCIT, TD S, KANPUR (SUPRA) WHEREIN THE RELEVANT FINDINGS ARE AS UNDER: 8. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER A UTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS AND THE DOCUMENTS PLA CED ON RECORD, WE 4 ITA NO. 164/JP/2016 STATE BANK OF INDIA, JAIPUR. FIND THAT AS PER PROVISIONS OF SECTION 10(5) OF THE A CT, ONLY THAT REIMBURSEMENT OF TRAVEL CONCESSION OR ASSISTANCE TO AN EMPLOYEE IS EXEMPTED WHICH WAS INCURRED FOR TRAVEL OF THE INDIVIDUA L EMPLOYEE OR HIS FAMILY MEMBERS TO ANY PLACE IN INDIA. NOWHERE IN THIS CLAUSE IT HAS BEEN STATED THAT EVEN IF THE EMPLOYEE TRAVELS TO FORE IGN COUNTRIES, EXEMPTION WOULD BE LIMITED TO THE EXPENDITURE INCURRED TO THE LAST DESTINATION IN INDIA. FOR THE SAKE OF REFERENCE, WE E XTRACT THE PROVISIONS OF SECTION 10(5) OF THE ACT AS UNDER:- 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YE AR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAU SES SHALL NOT BE INCLUDED- [(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 HIMSEL F AND HIS FAMILY, IN CONNECTION WITH HIS PROCEEDING TO ANY PL ACE IN INDIA AFTER RETIREMENT FROM SERVICE OR AFTER THE TERMINATION OF HIS SERVICE, SUBJECT TO SUCH CONDITIONS AS MAY BE PRESCRIBED (IN CLUDING CONDITIONS AS TO NUMBER OF JOURNEYS AND THE AMOUNT WHICH SHALL BE EXEMPT PER HEAD) HAVING REGARD TO THE TRAVEL CONCESSION OR ASS ISTANCE GRANTED TO THE EMPLOYEES OF THE CENTRAL GOVERNMENT: 9. ON PERUSAL OF THIS SECTION, WE ARE OF THE VIEW THA T THIS PROVISION WAS INTRODUCED IN ORDER TO MOTIVATE THE EMPLOYEES AND ALSO TO ENCOURAGE TOURISM IN INDIA AND, THEREFORE, THE REIMBURSEMENT OF LT C/LFC WAS EXEMPTED, BUT THERE WAS NO INTENTION OF THE LEGISLAT URE TO ALLOW THE EMPLOYEE TO TRAVEL ABROAD UNDER THE GARB OF BENEFIT OF LTC AVAILABLE BY 5 ITA NO. 164/JP/2016 STATE BANK OF INDIA, JAIPUR. VIRTUE OF SECTION 10(5) OF THE ACT. UNDISPUTEDLY, I N THE INSTANT CASE THE EMPLOYEES OF THE ASSESSEE HAVE TRAVELLED OUTSIDE IND IA IN DIFFERENT FOREIGN COUNTRIES AND RAISED CLAIM OF THEIR EXPENDITURE INCURRED THEREIN. NO DOUBT, THE ASSESSEE MAY NOT BE AWARE WITH THE ULT IMATE PLAN OF TRAVEL OF ITS EMPLOYEES, BUT AT THE TIME OF SETTLEME NT OF THE LTC/LFC BILLS, COMPLETE FACTS AND AVAILABLE BEFORE THE ASSES SEE AS TO WHERE THE EMPLOYEES HAVE TRAVELLED, FOR WHICH HE HAS RAISED THE CLAIM ;MEANING THEREBY THE ASSESSEE WAS AWARE OF THE FACT THAT ITS E MPLOYEES HAVE TRAVELLED IN FOREIGN COUNTRIES, FOR WHICH HE IS NOT ENT ITLED FOR EXEMPTION UNDER SECTION 10(5) OF THE ACT. THUS, THE PAYMENT M ADE TO ITS EMPLOYEES IS CHARGEABLE TO TAX AND IN THAT SITUATION , THE ASSESSEE IS UNDER OBLIGATION TO DEDUCT TD ON SUCH PAYMENT, BUT T HE ASSESSEE DID NOT DO SO FOR THE REASONS BEST KNOWN TO IT. WE HAVE CAREFULLY EXAMINED THE CIRCULAR PLACED BY THE LD. COUNSEL FOR THE ASSESSE E DURING THE COURSE OF HEARING, IN WHICH A REFERENCE WAS MADE TO THE INTERI M ORDER OF THE HONBLE MADRAS HIGH COURT HAS PERMITTED THE BANKER NOT TO DEDUCT TDS ON OR AFTER 16/2/2015 ON THE AMOUNT PAID/REIMBURSED TO THE EMPLOYEES OF THE BANK IN RESPECT OF LTC/HTC AVAILED WHERE THE EMPLOYEE HAS VISITED A FOREIGN CITY/COUNTRY, IRRESPECT IVE OF THE FACT WHERE THE LFC BILLS WERE SUBMITTED AND PAID PRIOR TO 16 /2/2015, MEANING THEREBY THIS CIRCULAR WAS PASSED CONSEQUENT TO THE INTERIM ORDER OF THE HONBLE MADRAS HIGH COURT. BUT IN THE PRE SENT CASE, THE JOURNEY WAS UNDERTAKEN IN THE YEAR 2012 AND THE BILL W ERE SETTLED DURING THAT YEAR; MEANING THEREBY AT THE RELEVANT POIN T OF TIME WHEN THE BILLS WERE SETTLED, THERE WAS NO ORDER OF THE HONB LE MADRAS HIGH COURT AND THE ASSESSEE WAS UNDER OBLIGATION TO DEDUCT TDS ON THE REIMBURSEMENT OF EXPENDITURE INCURRED BY THE ASSESSEE ON FOREIGN TRAVEL. IN THE LIGHT OF THESE FACTS, WE ARE OF THE C ONSIDERED OPINION THAT 6 ITA NO. 164/JP/2016 STATE BANK OF INDIA, JAIPUR. THE REVENUE HAS RIGHTLY HELD THE ASSESSEE TO BE IN D EFAULT, AS THE ASSESSEE HAS NOT DEDUCTED TDS INTENTIONALLY ON THE REIMBURSEMENT OF EXPENDITURE INCURRED ON LTC/LFC. MOREOVER, THE LD. CIT (A) HAS DIRECTED THE ASSESSING OFFICER TO RECALCULATE THE LIABILITY O F TDS AT 10%. WE , THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE LD. CI T(A) AND WE CONFIRM THE SAME. 10. SIMILARLY, THE DECISION OF THE CO-ORDINATE BENC H IN CASE OF OM PRAKASH GUPTA VS ITO (SUPRA) ALSO SUPPORT THE CASE OF THE R EVENUE WHEREIN THE CO- ORDINATE BENCH HAS HELD AS UNDER:- 12. THE SAID SUB-SECTION PROVIDES THAT WHERE AS INDIV IDUAL HAD RECEIVED TRAVEL CONCESSION OR ASSISTANCE FROM HIS EMPLOYER OR PRO CEEDING ON LEAVE TO ANY PLACE IN INDIA, BOTH FOR HIMSELF AND HI S FAMILY, THEN SUCH CONCESSION RECEIVED BY THE EMPLOYEE IS NOT TAXABLE I N THE HANDS OF THE EMPLOYEE. SIMILAR EXEMPTION IS ALLOWED TO AN EMPLOY EE PROCEEDING TO ANY PLACE IN INDIA AFTER RETIREMENT OF SERVICE OR AFTER THE TERMINATION OF HIS SERVICE. THE PROVISIONS OF THE ACT ARE IN RELATION TO THE TRAVEL CONCESSION/ASSISTANCE GIVEN FOR PROCEEDING ON LEAVE T O ANY PLACE IN INDIA AND THE SAID CONCESSION IS THUS EXEMPT ONLY W HERE THE EMPLOYEE HAS UTILIZED THE TRAVEL CONCESSION FOR TRAVEL WITHIN INDIA. FURTHER UNDER RULE 2B OF THE INCOME TAX RULES THE CONDITION FOR ALL OWING EXEMPTION UNDER SECTION 10(5) OF THE ACT ARE LAID DOWN. THE CO NDITIONS ARE IN RESPECT OF VARIOUS MODES OF TRANSPORT. HOWEVER, THE B ASIC CONDITION IS THAT THE EMPLOYEE IS TO UTILIZE THE TRAVEL CONCESSIO N IN CONNECTION WITH IS PROCEEDING TO LEAVE TO ANY PLACE WITHIN INDIA, EI THER DURING THE COURSE OF EMPLOYMENT OR EVEN AFTER RETIREMENT OF SERVICE OR AFT ER TERMINATION OF SERVICE. READING OF SECTION 10(5) OF THE ACT AND RULE 2B OF THE RULES IN CONJUNCTION LAYS DOWN THE GUIDELINES FOR CLAIMING EXEMPTION IN RELATION TO THE TRAVEL CONCESSION RECEIVED BY AN EMPLO YEE FROM HIS EMPLOYER OR FORMER EMPLOYER, FOR PROCEEDING ON LEAVE TO ANY PLACE IN 7 ITA NO. 164/JP/2016 STATE BANK OF INDIA, JAIPUR. INDIA. THE PERSON IS TO UNDERTAKE THE JOURNEY TO ANY PLACE IN INDIA AND THEREAFTER RETURN TO THE PLACE OF EMPLOYMENT AND IS ENT ITLED TO REIMBURSEMENT OF EXPENDITURE ON SUCH TRAVEL BETWEEN 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 CONCESSIONS IS NOT TO EXCEED THE AIR ECONOMY FAIR OF THE NATIONAL C ARRIER BY THE SHORTEST ROUTE TO THE DESTINATION IN INDIA. THE SAI D CONDITION IN NO WAY PROVIDES THAT THE ASSESSEE IS AT LIBERTY TO CLAIM EXE MPTION OUT OF HIS TOTAL TICKET PACKAGE SPENT ON HIS OVERSEAS TRAVEL AND PART OF THE JOURNEY BEING WITHIN INDIA. WE FIND NO MERIT IN THE CLAIM O F THE ASSESSEE IN THE PRESENT CASE AND WE ARE IN CONFORMITY WITH THE OBSERVAT ION OF THE CIT(A) IN THIS REGARD, WHICH HAS BEEN REPRODUCED BY US IN THE PARAS HEREINABOVE. IN VIEW THEREOF, WE REJECT THE CLAIM OF THE ASSESSEE OF EXEMPTION UNDER SECTION 10(5) OF THE ACT. THE GROUN D OF APPEAL NO. 3 RAISED BY THE ASSESSEE IS THUS DISMISSED . 11. NO CONTRARY AUTHORITY HAS BEEN BROUGHT TO THE N OTICE OF THE BENCH. WE, THEREFORE, DO NOT SEE ANY REASON TO DEVIATE FROM TH E SAID VIEW TAKEN BY THE CO-ORDINATE BENCHES. IN THE RESULT, THE GROUND NOS . 1-6 OF THE ASSESSEES APPEAL ARE DISMISSED. 10. REGARDING GROUND NO. 7, IT IS NOTED THAT THE LD . CIT(A) HAS ALREADY HELD THAT FLAT RATE OF 30% APPLIED BY AO IN EACH CASE FO R COMPUTATION OF TDS LIABILITIES NOT IN ACCORDANCE WITH THE PROVISIONS O F SECTION 192 AND THE AO HAS BEEN DIRECTED TO COMPUTE TDS IN CASE OF EACH EMPLOY EE ACCORDING TO THE TAX SLAB IN WHICH EACH EMPLOYEE FALLS. THIS GROUND IS THUS IN FRUCTUOUS AND IS HEREBY DISMISSED. 11. REGARDING GROUND NO. 8, THE LD. CIT(A) HAS ALRE ADY THE AO TO COMPUTE INTEREST U/S 201(1A) WITH REFERENCE TO THE ACTUAL D ATE OF PAYMENT OF LTC IN EACH CASE. THIS GROUND IS THUS IN FRUCTUOUS AND IS HEREBY DISMISSED. 12. IN THE RESULT, WE CONFIRM THE FINDINGS OF THE L D. CIT(A) AND THE APPEAL OF THE ASSESEE IS DISMISSED. 8 ITA NO. 164/JP/2016 STATE BANK OF INDIA, JAIPUR. 5. THERE IS NO CHANGE INTO FACTS AND CIRCUMSTANCES. THEREFORE, TAKING A CONSISTENT VIEW, WE HEREBY DISMISS THE GROUNDS RAIS ED IN THIS APPEAL. 6. IN THE RESULT, APPEAL OF THE ASSESSEE, IN ITA NO . 164/JP/2016 IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 27TH DAY OF APRIL 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 27 /04/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- STATE BANK OF INDIA, JAIPUR ADMI N OFFICE I, A-5. 2. THE RESPONDENT THE ACIT (TDS), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 164/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR