TMI Blog2023 (8) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... within India, foreign travel is being availed. The appellant cannot claim ignorance about the travel plans of its employees as during settlement of LTC Bills the complete facts are available before the assessee about the details of their employees travels. Therefore, it cannot be a case of bonafide mistake, as all the relevant facts were before the Assessee employer and he was therefore fully in a position to calculate the estimated income of its employees. The contention of assessee that there may be a bonafide mistake by the assessee-employer in calculating the estimated income cannot be accepted since all the relevant documents and material were before the assessee- employer at the relevant time and the assessee employer therefore ought to have applied his mind and deducted tax at source as it was his statutory duty, under Section 192(1) of the Act. Decided against assessee. - ITA No. 5386/Del/2017 - - - Dated:- 28-7-2023 - Shri C.M. Garg, Judicial Member AND Dr. B. R. R. Kumar, Accountant Member For the Assessee : Shri Vivek Gupta, CA For the Revenue : Shri. H. K. Choudhary, CIT DR ORDER PER C. M. GARG, J. M.: 1. This appeal has been fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der identical facts and circumstances for AY 2013-14 has been decided in favour of the revenue and against assessee with following observations and findings:- 6. Let us first go through some of the relevant provisions of the Income Tax Act, 1961 (for short the Act ) and the Income Tax Rules, 1962 framed therein. Let us first take Section 192(1) of the Act which casts a statutory duty on the employer to deduct Tax at source from the salary of its employee 192(1) Any person responsible for paying any income chargeable under the head Salaries shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year. The consequences of failure to deduct tax at source when it is due, is given in Section 201, which reads as follows:- Consequences of failure to deduct or pay. 201. (1) Where any person, including the principal officer of a company, (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : [Explanation 1]. For the purposes of this clause, family , in relation to an individual, means (i) the spouse and children of the individual ; and (ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual. The above provision has to be read along with Rule 2B of Income Tax Rules. Rule 2B reads as under :- [Conditions for the purpose of section 10(5) . 2B. (1) The amount exempted under clause (5) of section 10 in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding, (a) on leave to any place in India; (b) to any place in India after retirement from service or after the termination of his service, shall be the amount actually incurred on the performance of such travel subject to the following conditions, namely : [(i) where the journey is performed on or after the 1st day of October, 1997, by air, an amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination; (ii) where place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nations thus the Applicant was held to be an assessee in default by the Assessing Officer. The travel undertaken by the employees as LTC was hence in violation of Section 10(5) of the Act read with Rule 2B of the Income Tax Rules, 1962, both of which have been reproduced above. The order of the Assessing Officer was challenged before CIT (A), which was dismissed and so was their appeal before the Income Tax Appellate Tribunal. 9. The Delhi High Court vide its order dated 13.01.2020 dismissed the appeal holding that there was no substantial question of law in the Appeal. It was held that the amount received by the employees of the assessee employer towards their LTC claims is not liable for the exemption as these employees had visited foreign countries which is not permissible under the law. 10. The provisions of law discussed above prescribe that the air fare between the two points, within India will be given and the LTC which will be given will be of the shortest route between these two places, which have to be within India. A conjoint reading of the provisions discussed herein with the facts of this case cannot sustain the argument of the appellant that the travel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much higher. The Commission is, therefore, not inclined to concede the demand to allow foreign travel under LTC. This is also an objection of the Revenue which has been raised in its counter affidavit filed by respondent no. 1-Assistant Commission of Income Tax wherein the Revenue has asserted that the provision for LTC was introduced to motivate employees and encourage its employees towards tourism in India and it is for this reason that reimbursement of LTC was exempted. There was no intention of legislature to allow the employees to travel abroad in the garb of LTC available by virtue of Section 10(5) of the Act. Therefore, the Revenue has a valid objection (apart from other objections which are clearly violative of the Statute), that the intention and purpose of the scheme is also violated in the garb of tour within India, foreign travel is being availed. 16. The aforementioned order passed by the CIT(A) has rightly held that the obligation of deducting tax is distinct from payment of tax. The appellant cannot claim ignorance about the travel plans of its employees as during settlement of LTC Bills the complete facts are available before the assessee about the detai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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