STATE BANK OF INDIA V. THE ASSISTANT COMMISSIONER OF INCOME TAX

ITA/74/2021

AI Insights

The case involves the State Bank of India appealing against the order of the Income Tax Appellate Tribunal, which upheld the levy of tax and interest on certain reimbursements and denied exemptions related to leave travel expenses for the assessment years 2011-12, 2012-13, and 2013-14. The main legal issues revolved around the interpretation of Sections 201(1) and 201(1A) concerning tax deductions at source (TDS) and the applicability of Section 10(5) read with Rule 2B regarding exemptions for travel expenses. The High Court of Karnataka, referencing a decision by the Supreme Court in a similar case, dismissed the appeal, agreeing with the Tribunal's findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 752779 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-02-2023
• Assessment Year: misc
• Other Referred Cases: State Bank of India Vs. Assistant Commissioner of Income-Tax [2022] 144 taxmann.com 131 (SC)
• Laws Referred To: Income Tax Act 1961, Income Tax Rules 1962
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: JINITA CHATERJEE
• Keywords: Circuitous Route; Exemption denial; Income Tax; Leave Travel Expenses; Natural Justice; TDS
• Section: 201(1); 201(1A); 10(5); 2B; 260-A

Judgement Text

"- 1 - ITA No. 74/2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2023 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR INCOME TAX APPEAL NO. 74 OF 2021 BETWEEN: STATE BANK OF INDIA INSPECTION AND AUDIT DEPARTMENT BRANCH 58, CORPORATE CENTRE 1ST MAIN ROAD, SESHADRIPURAM BENGALURU - 560 020 (PAN:BLR00742A) PRESENTLY AT: NOW CIRCLE AUDIT OFFICE 7TH FLOOR, SBI BUILDING K.G.ROAD BENGALURU - 560 009 REPRESENTED BY ITS ASSISTANT GENERAL MANAGER SRI. A. RAJENDRA PRASAD S/O SRI. A. MANIKYA CHARY AGED ABOUT 57 YEARS PAN NO:BLRS00742A …APPELLANT (BY MS. JINITA CHATERJEE, ADVOCATE FOR SHRI. S. PARTHASARATHI, ADVOCATE) 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 Digitally signed by YASHODHA N Location: HIGH COURT OF KARNATAKA - 2 - ITA No. 74/2021 (BY SHRI. M. DILIP STANDING COUNSEL FOR SHRI. E.I. SANMATHI, STANDING COUNSEL) THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 28.09.2018 PASSED IN ITA NOS.1098, 1100 AND 1101/BANG/2017, FOR THE ASSESSMENT YEARS 2011-12, 2012-2013 AND 2013-2014 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL, SET ASIDE THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 28.09.2018 IN SO FAR IT PERTAINS TO THE APPELLANT’S APPEALS IN ITA NO. 1098, 1100 AND 1101/BANG/2017, FOR THE ASSESSMENT YEARS 2011-12, 2012-2013 AND 2013-2014 AND ETC. THIS ITA, COMING ON FOR FINAL HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the assessee directed against order dated September 28, 2018 in ITAs No.1098, 1100 to 1101/Bang/2017 for the Assessment Years 2011-2012, 2012-2013 and 2013-2014 passed by the ITAT1, Bengaluru, has been admitted to consider the following questions of law; “(i) 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? 1 Income Tax Appellate Tribunal - 3 - ITA No. 74/2021 (ii) Whether denial of exemption under Section 10(5) of the IT Act, 1961 rws Rule 2B of the IT Rules, 1962 of reimbursement of leave travel expenses as claimed by the employee of the Appellant was justifiable? (iii) Whether the employee of the Appellant was not eligible for exemption in respect of travel from the place of departure to the place of destination by shortest route even when the employee travels in circuitous route which include foreign leg? (iv) Whether the Tribunal was justified in holding that in light of the provisions of Section 10(5) of the IT Act, 1961 rws 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? (v) Whether the failure to afford an opportunity to the Appellant to furnish the details with regard to the expenditure in relation to the shortest route of travel in the case of employee to avail the benefit of exemption under Section 10(5) of the IT Act, 1961 was violation of principles of natural justice and the order of the Tribunal to that extent was sustainable?” 2. Heard Ms.Jinitha Chaterjee, learned advocate for the assessee and Shri M.Dilip, learned standing counsel for the Revenue. 3. At the outset, Shri Dilip submitted that the issue involved in this appeal is covered by the - 4 - ITA No. 74/2021 decision of the Apex Court in State Bank of India Vs. Assistant Commissioner of Income-Tax2, wherein the Apex Court has dismissed the appeal filed by the assessee holding the questions of law in favour of the Revenue. The same is not refuted by Ms.Jinitha Chaterjee. 4. Hence, the following; ORDER (i) Appeal is dismissed; and (ii) Questions of law are answered in favour of the Revenue and against the assessee. No costs. Sd/- JUDGE Sd/- JUDGE AV 2 [2022] 144 taxmann.com 131 (SC) "