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TMI Blog2023 (9) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessment in the assessee's case was completed u/s 144/147 of the Income Tax Act, 1961 on 27.01.2016 determining total income of Rs. 11,40,020/-. The Assessing Officer observed that the assessee, being an employee in the State Bank of India, claimed exemption u/s 10(5) of Rs. 2,68,400/-as part of leave Travel to Singapore, Malaysia, Bank of Kolkata, Dibrugarh, Delhi, Mumbai during the period form 02.06.2011 to 16.06.2011 but an amount of Rs. 2,10,518/- was disallowed out of Total exemption claimed of Rs. 2,68,400/- since this amount pertained to travel out of India and not permissible for exemption as per the provisions u/s 10(5) of the IT. Act, 1961. Therefore, the Assessing Officer initiated penalty proceedings u/s 271(1)(c) for furnishing inaccurate particulars of income to the same extent. The Assessing Officer had issued show cause notice u/s 271(1)(c) r.w.s 274 of the Act to the assessee vide notice dated 13.09.2017 & 01.01.2018. The assessee submitted reply in this regard however, the assessing officer did not find the reply tenable following which minimum penalty of Rs. 65,060/- was levied u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish inaccurate particulars of income, because the assessee is an employee and he has disclosed the entire facts, as per the Form No.16 received from his employer, therefore, assessee should not be treated that he has concealed particulars of his income. 7. Learned Counsel, further stated that in the penalty proceedings of State Bank of India (employer), the penalty levied on the State Bank of India under section 271C, for failure to deduct tax at source (TDS), has been deleted by the Tribunal, in respect of ITA Nos. 1661/Ahd/2017, 1662/Ahd/2017, 1664/Ahd/2017 and 2113/Ahd/2013. Since the penalty levied on State Bank of India (employer) in respect of the same LTC has been deleted by the Tribunal, therefore in the hands of the assessee, the penalty under section 271(1)(c) of the Act may also be deleted. 8. The Ld. Counsel also submitted that Assessing Officer vide assessment order para no.7.2, has initiated the penalty on account of furnishing inaccurate particulars of income. The relevant para 7.2 of assessment order reads as follows: "7.2 As mentioned above, the assessee was reimbursement total sum of Rs. 2,68,400/- out of which the sum of Rs. 2,10,518/- was pertained to his tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the credit is liable to be given to the assessee in accordance with law. Accordingly, we allowed the claim of the assessee and direct the assessing officer to give the credit to the assessee of the TDS amount of Rs. 207970/-. Accordingly, this issue is decided in favour of the assessee against the revenue." 13. I note that addition on account of TDS credit deposited by employer-State bank of India on payment of leave travel concession of Rs. 2,20,518/- has been deleted by the Tribunal, therefore the penalty imposed by the assessing officer under section 271(1) (c ) of the Act, in respect of Rs. 2,20,518/-, does not have any leg to stand, hence penalty under section 271(1) (c ) of the Act of Rs. 65,060/- should be deleted. 14. I note that for AY.2012-13 to 2014-15 in ITA No.1660 to 1666/Ahd/2017 for AYs.2012-13 to 2014-15, in case of State Bank of India vs ITO (TDS), the penalty under section 271C, on account of non-deduction of tax from the amount reimbursed in respect of foreign compensation of LFC/LTC, has been deleted by this Tribunal, observing as follows: "10. The assessee has filed four appeal vide ITA 1661/A/2017, 1662/A/2017, 1664/Ahd/2017 and 2113/Ahd/2013 against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R & R/2012-13/665/F/6264 dated 12th July, 2012. The assessee has retreated the similar submission as submitted before the assessing officer and related to the proceedings u/s. 201(1) and 201(1A). After perusal of the above facts and material on record we observe provision of section 201(1) and 201(1 A) were rightly envisaged as the assessee was in default in not deducting tax as exemption u/s. 10(5) are not available on reimbursement of expenditure on LTC/LFC as if the employees travel to foreign country. We consider that penalty leviable u/s. 271C can be waived off in case the assessee or the person, as the case may be, proves the reasonable cause for example the reason for failure to apply with the requisite provision under which he was liable to deduct at source. Further, we have noticed that section 201 and 271C are two independent and separate proceedings at the time of imposing penalty it is required to examine the assessee's explanation with regard to reasonable cause for failure to deduct tax at source as elaborate above, we observe that there was a reasonable cause as under the circumstances cited above it becomes debatable issue for the assessee to deduct tax or not t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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