9911796707
TMI Blog2021 (10) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the 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 observations/ holding as under: "All the operational 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 is 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 process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 submitted 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. It is submitted that the amount of exemption provided to the employees 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 of 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 LFC 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. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative, though, fairly submitted that the issue is covered by the decision of the Tribunal in assessee's 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 (Appeals). Drawing our attention to statement of facts filed before learned 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 have 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 Bench in assessee's 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 bench decision in assessee‟s own case {also reported at State Bank of India Vs ACIT [(2021) 123 taxmann.447 (Mum)]} wherein the coo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 correct and applicable legal position consistently followed by several coordinate benches 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 from 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xists, an amount not exceeding the Ist class 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 distance 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 "any 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 envisage the possibilities 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 exemption 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyer 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 concession 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 really 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 section 10(5) and not with the broader question about the nature of tax deduction at source 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 deman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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