STATE BANK OF INDIA NALIKUL BRANCH ,NALIKUL V. INCOME TAX TDS WARD 2(2), KOLKATA, KOLKATA

ITA 2691/KOL/2024

AI Insights

This case involves an appeal by the State Bank of India Nalikul Branch against an order passed by the CIT(A), National Faceless Appeal Centre, Delhi, for the assessment year 2016-2017. The appeal was initially time-barred but was admitted after the assessee provided reasonable grounds for the delay, which the Senior DR did not object to. The core issue revolves around the non-deduction of TDS on Leave Fare Concession (LFC) payments to employees, which the assessee argued was under the specific directions of the Hon'ble High Court of Madras. Both the CIT(A) and the TDS officer had previously held the appellant as an assessee in default under section 201(1) of the Income Tax Act, leading to a demand of tax and interest. The Tribunal noted that both lower authorities had issued ex-parte orders and decided to restore the matter to the AO for a fresh examination, considering the interim order of the Madras High Court and the Supreme Court's stay on recovery proceedings.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830221 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Kolkata
• Assessment Year: misc
• Appeal Filed On: 30-12-2024
• Other Referred Cases: SBI Vs. ACIT, Civil Appeal No. 8181 of 2022, All India State Bank Officers Federation vs. W.P.No.11991 of 2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT ADHIKARY
• Keywords: Condonation of delay; Opportunity of being heard; TDS; Recovery proceedings
• Section: 201(1)

Judgement Text

" आयकर अपीलीय अधिकरण, “एस.एम.सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA श्री जाजज माथन, न्याययक सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अपील सं/ITA No.2691/KOL/2024 (नििाारण वर्ा / Assessment Year. :2016-2017) State Bank of India Nalikul Branch Nalikul, Chandannagar, West Bengal-712407 Vs ITO Ward-2(2), Kolkata TAN No. : CALS25411B (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : None राजस्व की ओर से /Revenue by : Shri Abhijit Adhikary, Sr. DR सुनवाई की तारीख / Date of Hearing : 12/01/2026 घोषणा की तारीख/Date of Pronouncement : 12/01/2026 आदेश / O R D E R This is an appeal filed by the assessee against the order dated 06.08.2024 passed by the ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2016-2017. 2. The present appeal filed by the assessee is time barred by 60 days. In this regard, the assessee has filed an application for condonation of delay stating sufficient reasons which are found to be reasonable, to which ld. Sr. DR also did not raise any serious objection to condone the delay. Accordingly, looking to the facts and circumstances of the case and the prayer of the assessee, the delay of 60 days in filing the appeal is condoned and the appeal is admitted for hearing. 3. A perusal of the facts of the present case shows that the order of the AO dated 21.12.2023 is an ex-parte order. Even before the ld. CT(A), the assessee has failed to represent and it is also an ex-parte order. Now, in the appeal before the Tribunal, the assessee has raised the ground that in Printed from counselvise.com ITA No.2691/KOL/2024 2 view of the interim order of the Hon’ble Madras High Court in the case of All India Sate Bank Officers Federation, passed in M.P.No.2 of 2014 in W.P.No.11991 of 2014, dated 16.02.2015, the assessee had not deducted the TDS. This appeal has been filed by the assessee on 30.12.2024 with the following grounds :- The Appellant objects to the order under section 201(1) read with 201(1A) passed by the income tax officer, for the aforesaid assessment year on the following among the grounds: 1. The order of the learned CIT(A), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective. 2. The learned CIT(A) & TDS officer both erred in holding the Appellant as an assessee in default under section 201(1) on the basis that tax was not deducted at source on payment of Leave Fare Concession [LFC) and raising a demand of and interest. 3.The learned CIT(A) & TDS officer both erred in not appreciating that the Appellant did not deduct tax at source on the reimbursement of LFC amounts to its employees under the specific directions of the Hon'ble High Court of Madras in its Interim Order dated 16 February 2015 in W.P. No. 11991 of 2014. 4.The learned CIT(A) & TDS officer both erred in not appreciating that the directions given by the Hon'ble High Court of Madras are binding on the Appellant and had the Appellant deducted the tax at Source, it would have been contrary to the Hon'ble High Court order, which could have amounted to contempt of Court order. 5. Without prejudice to the above, the learned CIT(A) & TDS officer both erred in not appreciating that there cannot be any recovery from the Appellant as there is a stay from initiating recovery proceedings from Appellant's employees in terms of order dated 8 August 2022 passed by the Hon'ble High Court of Madras in Writ Appeal 1653/2022 filed against the judgment dated: 24/06/2022.moreover the apex court also put a stay upon the recovery of taxes from the bank employee 6. Without prejudice to the above, the learned TDS officer & CIT(A) erred in not appreciating that the Appellant was under a bona fide belief that no TDS was applicable on the reimbursement of the LFC paid to its employees involving enroute foreign travel in lieu of section 10(5) and hence, the Appellant ought not be regarded as an assessee in default. Printed from counselvise.com ITA No.2691/KOL/2024 3 7.Without prejudice to the above, the learned TDS officer & CIT(A) erred in not appreciating that it is a well settled principle in law that if two views are possible then the view which is favorable to the appellant is to be adopted. In the present case, as the Appellant has taken a possible view, the Appellant ought not be treated as an assessee in default. 8. Without prejudice to the above, the learned TDS Officer and CIT(A) has not given opportunity time to heard the assessee and passed the order in hurry raising the demand under section 201 and CIT(A) upheld the previous order just on written submission. 9. Without prejudice, TDS officer completed the assessment citing the order of apex court without appreciating the circumstances and the fact of the matter. 10. That the Notice U/s 156 of the Income tax is full of errors and providing erroneous information and is biased in nature. 11. That the appellant craves leave to add to, alter, amend modify, substitute delete and/or rescind all or any of the GROUNDS OF APPEAL on or before the final hearing, if necessity so arises. 4. The appeal had been posted on multiple occasions and on 21.04.2025 and 26.06.2025 the counsel appeared for which there is erratic appearance by the counsel. When the matter was called for hearing today again no one represented on behalf of the assessee. A perusal of the grounds raised by the assessee shows that the assessee is having shelter under the interim order of the Hon’ble Madras High Court, referred to supra. A perusal of the order of the AO shows that the AO had relied upon the decision of the Hon’ble Supreme Court in the case of SBI Vs. ACIT, Civil Appeal No. 8181 of 2022 dated 04.11.2022. Considering the fact that both the orders of the lower authorities are ex-parte orders, therefore, in the interest of justice and so as to grant the assessee one more opportunity to put its affairs in order, the issues in this appeal are restored to the file of Printed from counselvise.com ITA No.2691/KOL/2024 4 ld.AO for re-adjudication after granting the assessee adequate opportunity of being heard. 5. In the result, appeal of the assessee is partly allowed for statistical purposes. Order dictated and pronounced in the open court on 12/01/2026. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 12/01/2026 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// Printed from counselvise.com "