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TMI Blog2023 (8) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ejudice to ground no 2 above, the Ld CIT (A) has also erred in treating the bank as an "assessee in default" by considering the bona fide belief of the bank as mala fide for alleged non deduction of TDS on reimbursement towards Leave Travel Concession. 4. Without prejudice to ground no 3 above, the Ld CIT(A) has erred in directing to produce the form no 26A to the Ld AO by the appellant for inclusion of such LTC claim by employees in their return of income when the Ld AO can himself collect evidences from its own income tax department as the appellant had already given the name, addresses and PAN of such employees during the course of assessment proceedings which the Ld AO has also recorded in his assessment order. 5. That in light of aforesaid grounds of appeals, the Ld CIT (A) also erred in confirming the action of AO to levy interest under section 201(1A) of IT Act." 3. The assessee's representative (ld AR) in all fairness submitted that since the issue has been decided against the assessee for AY 2012-13 by Hon'ble Supreme Court in assessee's own case in Civil Appeal No. 8181/2022, therefore, the appeal may kindly be disposed off in accordance with the said order of Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed Provided further that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax. Section 10(5) which exempts payments received as LTC with which we are presently concerned. It reads as under :- "10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included - XXX XXX XXX (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 himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service, subject to such conditions as may be prescribed includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the journey by the shortest route, as if the journey had been performed by rail.]" 7. The appellant before us is a Public Sector Bank, namely, State Bank of India (SBI). The Revenue has held the appellant to be an "assessee in default", for not deducting the tax at source of its employees. 8. These proceedings started with a Spot Verification under Section 133A when it was discerned by the Revenue that some of the employees of the assessee- employer had claimed LTC even for their travel to places outside India. These employees, even though, raised a claim of their travel expenses between two points within India but between the two points they had also travelled to a foreign country as well, thus taking a circuitous route for their destination which involved a foreign place. The matter was hence examined by the Assessing Officer who was of the opinion that the amount of money received by an employee as LTC is exempted under Section 10(5) of the Act, however, this exemption cannot be claimed by an employee for travel outside India which has been done in this case and therefore the assessee- employer defaulted in not deducting tax at source from this amount claimed by its employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s long as the starting and destination points remain within India is also without merits. LTC is for travel within India, from one place in India to another place in India. There should be no ambiguity on this. 14. The second argument urged by the appellant that payments made to these employees was of the shortest route of their actual travel cannot be accepted either. It has already been clarified above, that in view of the provisions of the Act, the moment employees undertake travel with a foreign leg, it is not a travel within India and hence not covered under the provisions of Section 10(5) of the Act. 15. A foreign travel also frustrates the basic purpose of LTC. The basic objective of the LTC scheme was to familiarise a civil servant or a Government employee to gain some perspective of Indian culture by traveling in this vast country. It is for this reason that the 6th Pay Commission rejected the demand of paying cash compensation in lieu of LTC and also rejected the demand of foreign travel. In para 4.3.4 of the 6th Pay Commission Report dated March, 2008 this is what was said :- "4.3.4. The demand for allowing travel abroad at least once in the entire career under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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