STATE BANK OF INDIA RBO-II,GWALIOR vs. THE INCOME TAX OFFICER, TDS, GWALIOR, GWALIOR

ITA 337/AGR/2026Status: HeardITAT Agra24 June 2026AY 2016-1713 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that LFC exemption under Section 10(5) is only for travel within India. Foreign travel, even with Indian start/end points, violates the purpose of LTC and is not eligible for exemption. Therefore, the assessee is liable for TDS and consequential interest.

What were the facts?

The assessee bank did not deduct tax at source on Leave Fare Concession (LFC) paid to employees who included a foreign leg in their travel. The bank relied on High Court interim orders and the belief that LFC was not taxable. The Assessing Officer treated the bank as an assessee in default.

What were the issues?

Whether LFC paid for travel including a foreign leg is exempt from tax under Section 10(5) and whether the employer is liable for non-deduction of TDS.

Which sections of the Income-tax Act were involved?

Section 10(5),Section 192,Section 201,Section 201(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH “DB”: AGRA

For Appellant: Shri Dinesh Nair, C.A
For Respondent: Shri Anil Kumar, Sr. DR
Hearing: 23/06/2026Pronounced: 24/06/2026
1.

This appeal has been preferred against the impugned order dated 27.01.2026 passed in appeal No. ADDL/JCIT (A)-2 SILIGURI/10084/2014- 15by Addl JCIT(A)-2, Siliguri u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), for A.Y. 2016-17, wherein ld CIT(A) has dismissed assessee’ s appeal, confirming order dated 30.03.2023 passed u/s 201(1) r.w.s 201(1A) of the Act, by ITO, (TDS) Gwalior(hereinafter referred to as ‘ld. AO’).

2.

The only issue for determination under appeal, is as to whether the ld CIT(A) was justified in confirming the action of the ld AO in treating the assessee (a Public Sector Bank) as an assessee in default u/s 201 of the Act and consequential interest u/s 201(1A) of the Act in respect of non-deduction of

The order continues below.

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