TMI Blog2018 (5) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... essee- Bank was under obligation to deduct TDS on such payments. 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. The assessee had relied on various case laws for the proposition that its estimate is bona fide and it cannot be held to be an '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 belief was formed that such foreign travel expenses would come within the ambit of sec. 10(5). Respectfully following the ratio of the decision in the case of Syndicate Bank (2017 (4) TMI 533 - ITAT BANGALORE), we dismiss the appeals filed by the assessee. - ITA No. 1395 , 1396 , 1397 , 1398 , 1399 , 1400 , 1401 , 1402 , 1403 , 1404 , 1405 , 1406 , 1407 , 1408 , 1409 1410 , 1411 , 1412 , 1424 , 1425 , 1426 1456 , 1457 , 1458 //Bang/2017 - - - Dated:- 6-4-2018 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER and SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER Assessees by : Shri S.Parthasarathi, Advocate. Revenue by : Dr. P.V.Pradeep Kumar, Addl.CIT(DR) O R D E R Per BENCH : Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and perused material on record. The issue in the appeal is covered against the assessee-bank by the decision of the co-ordinate bench (Bangalore) of the Tribunal in the case of Syndicate Bank vs. Asst.CIT(TDS), (2017) 80 taxmann.com 179(Bang.Trib),wherein, following the decision of the co-ordinate bench (Lucknow) of Tribunal in the case of SBI vs. Dy.CIT(TDS) (2016) 158 ITD 194 (Luck-Trib), [to which one of us viz., the Hon ble Judicial Member is the author] held as follows: 7.1 The solitary issue for consideration now is: Whether the A.O. was justified in treating the assessee-Bank as an 'assessee in default' u/s. 201(1) of the Act for making short deduction u/s. 192 of the Act in allowing exemption u/s. 10(5) of the Act towards the reimbursement of LTC/LFC claims of its employees? 7.2 Briefly stated, a survey u/s. 133A of the Act had taken place in the business premises of the assessee-Bank on 18.3.2014 by the ACIT, TDS Circle 18(2), Bengaluru 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 Act to its employees for travel outside India and also travelled by a circuitous route ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of s.10(5) of the Act with letter and spirit and allowed exemption in a mechanical way. As rightly highlighted by the learned DR in his submissions, the provisions of s. 10(5) of the Act are clear and only the reimbursement of expenses which were incurred on travel of employees and his family to any place in India subject to certain conditions are exempt. Since the employees of the assessee-Bank had travelled to foreign countries, the benefit of exemption available u/s. 10(5) of the Act should not have been granted. We agree that the assessee-Bank may not have been aware of the details of the employees' places or destination of visits at the time of advancement of LTC/LFC amounts. 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 aware 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 deduct tax at source treating such an amount a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings as under: 12. The said sub-section provides that where an individual had received travel concession or assistance from his employer for proceeding on leave to any place in India, both for himself and his family, then such concession received by the employee is not taxable in the hands of the employee. Similar exemption is allowed to an employee 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 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 transport. However, the basic condition is that the employee is to utilize the travel concession in connection with his proceeding to leave to any place within India, either during the course of employment or even after retirement of service or after termination of service. Reading of section 10(5) of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Nestle India Ltd. (supra) relied on by the assessee- Bank the issue, in brief, was that on a perusal of the annual return of the assessee, the ACIT(TDS) noticed that the assessee had made short deduction of TDS while computing the income of its employees chargeable under the head 'salaries', the conveyance allowance (CA)/reimbursement granted to them had not been included in their taxable salaries. In compliance to the A.O.'s query, the assessee, inter alia, explained that the CA was being paid as reimbursement to those employees who had not been provided with vehicles 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 was paying salaries to its employees under the garb of CA in order to avoid taxation and, accordingly, held the assessee as an 'assessee in default'. When the issue went in appeal before the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has no relevance whatsoever to the matter under consideration. The ruling of the Hon'ble Supreme Court relied on by the assessee- Bank, in our considered view, cannot come to its rescue. 8. As rightly highlighted by the Hon'ble Tribunal, Lucknow 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/LFC was exempted, but, there was no intention of the Legislature to allow the employees to travel abroad under the garb of benefit of LTC available by virtue of s.10(5) of the Act. However, in the present case the employees of the assessee-Bank have travelled outside India and raised claims of their expenditure incurred therein. There is no dispute that the assessee- 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 have placed comprehensive details before the assessee-Bank as to where they have travelled/visited and raised the claims, that means to say, the assessee-Bank was well aware ..... X X X X Extracts X X X X X X X X Extracts X X X X
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