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Income Tax Appellate Tribunal, BENGALURU BENCH ‘C’ BENGALURU
Per BENCH:
These 49 appeals filed, at the instance of the assessee-Bank are directed against the various orders passed by the CIT(A) relating to various assessment years.
The assessee-Bank has, in its grounds of appeals for all the assessment years under dispute, raised more or less the following identical issues, namely:
(1) That the CIT(A) erred in confirming the demands raised by the A.O. u/s. 201(1) and u/s. 201(1A) of the Act;
(2) That the CIT(A) erred in concluding that the employees of the assessee was not eligible exemption u/s. 10(5) of the Act for expenditure incurred for reimbursement of LTC/LFC claims; &
(3) That the CIT(A) erred in holding that the assessee as ‘an assessee in default’ and, accordingly, confirmed the demand raised u/s. 201 of the Act without bringing on record that the employees have not paid their taxes.
As the issues raised in these appeals pertaining to the same assessee and also interlinked, for the sake of convenience, they were heard, considered and disposed off in this consolidated order.
Briefly stated, the facts of the case are as follows:-
The assessee-Bank is a nationalized bank. A survey u/s. 133A of the Act was conducted in the business premises of the assessee on 18.03.2014 by the Asst.
Commissioner of Income-tax(TDS) – the A.O. – to verify the TDS compliance by the assessee in the case of salary and perquisite payments made to its employees. It was the stand of the A.O. that the assessee-Bank had erroneously allowed LFC exemption u/s. 10(5) of the Act to its employees since the travels also included a leg outside India and travel by long circuitous route which was not in accordance with the provisions of s.
10(5) of the Act read with Rule 2B of I.T. Rules. After due consideration of the assessee’s explanation and also extensively analyzing the provisions of (i) Rule 2B of Income-tax Rules, 1962; (ii) s.10(5) of the Act and following the decision of the Hon’ble ITAT, Chandigarh Bench, in the case of Sh. Om Parkash Gupta v. ITO (I.T.A. No. 938/Chd/2011), the A.O. was of the view that the deductor (the assessee-Bank) was an ‘assessee in default’ u/s. 201(1) for making short-deduction u/s. 192 and was liable to pay the defaulted amount as calculated in the respective impugned orders passed u/s. 201(1) and 201(1A) of the Act.
Aggrieved, the assessee-Bank took up the issues for all the assessment years under dispute before the CIT(A) for consideration. After due consideration of the assessee’s contentions, the A.O.’s reasoning as elaborately discussed in impugned orders under dispute, the CIT(A) confirmed the A.O.’s stand for all the AYs under consideration for almost identical reasons. For appreciation of facts, the relevant portions of the CIT(A)’s reasoning are as under:
(at pg. 10 of CIT(A) order for AY 2011-12 (I.T.A. No.550/TDS/CIT(A)13/14-15) at pgf cita
“6.2. I find that as per provisions of section 10(5) of the Act, only that reimbursement of travel concession or assistance to an employee is exempted which was incurred for travel of the individual employee or his family members to any place in India. Nowhere in this clause, it has been stated that even if the employee travels to foreign countries, exemption would be limited to the expenditure incurred to the last destination in India. The appellant has relied on the decision of the Hon’ble Supreme Court in the case of CIT vs. Larsen & Toubro Ltd. (2009) 313 ITR 1. The said judgment is not about the claim of LTC/LFC to foreign countries but pertains to the issue as to whether the employee has actually utilized the amount paid towards LTC/LFC., and is, therefore, not applicable to the case of the appellant.
On perusal of section 10(5) of the Act and the corresponding Rule 2B of I.T. Rules, it is evident that there was no intention of the Legislature to all the employees to travel abroad under the garb of benefit of LTC available by virtue of section 10(5) of the Act. In the instant case, the employees of the deductor have travelled outside India in different foreign countries and raised claim of their expenditure incurred therein. No doubt, the deductor may not be aware with the ultimate plan of travel of its employees, but, at the time of settlement of the LTC/LFC bills, complete facts are available before the deductor as to where the employees have travelled, for which, he has raised the claim; meaning thereby the deductor was aware of the fact that its employees have travelled in foreign countries, for which he was not entitled for exemption u/s. 10(5) of the Act. Recently, the Hon’ble ITAT, Lucknow Bench ‘A’ in the case of State Bank of India vs. DCIT(TDS), Kanpur (IT Appeal Nos. 138 to 140 (Luck) of 2015). On similar facts has held that the A.O. has rightly held the assessee to be in default, as the assessee has not deducted TDS intentionally on the reimbursement of expenditure incurred on LTC/LFC. Thus, the payment made to its employees was chargeable to tax and in that situation, the deductor was under obligation to deduct TDS on such payment, but, the deductor did not do so…..
6.3 Ground No. 4: The appellant has taken the ground that the Assessing Officer erred in confirming the demand u/s. 201 of the Act without bringing on record that the employees have not paid the tax and that the Assessing Officer failed to appreciate the fact that the appellant as an employer has only to make a fair estimate of the salary income for making deductions u/s.
Again, it is mentioned that it is a survey case wherein the Department found that the deductor had allowed the exemption u/s. 10(5) to employees for travel outside India (foreign travel). The A.O. in her order has mentioned that the employees also submit the quotation from the tour and travel agent about the expenditure expected to be incurred by them towards the travel. The quotation includes both Indian travel and foreign travel. However, the employer considers overall expenditure (i.e., both Indian and foreign) as notional expenditure incurred towards travel from Bangalore to farthest place in India/destination placed declared by employee (may be Wagha border or Debrugarh etc.) Thus, notional expenses reimbursed by employer are much higher than the actual expenditure incurred by employee for his places of visit in India. Though the bills of actual expenditure incurred by employee for travel within India is available on records, same is not taken into consideration by employer. Instead, employer calculates separately by considering national carrier prices to the destination placed declared by the employee. These notional prices are calculated based on the price list given by travel agent and these prices are higher in rates comparative to the normal bookings. The amount calculated by the employer is reimbursed to the employee. Here, the amount claimed and the reimbursement amount used to be the same or minor difference i.e., difference in few thousands only. The employer reimbursed amount is over and above the actual expenditure incurred for the proceedings within India. It means employer is reimbursing the expenditure incurred on foreign travel also. The reimbursement amount includes the expenditure incurred for both Indian and foreign travel. In all cases, boarding passes of foreign travel is available on record. Thus, here is a case wherein the deductor is facilitating the employees to violate section 10(5) of the Act and to wrongly claim income tax benefits under the said section 10(5) of the Act and, thus, wrongly claims that it is making the bona-fide estimate of income in the hands of employee for making deductions u/s. 192……….
6.4……………………………………………………………………………………………………………..…
…………………………………………………………………………………………………………………… ….
6.5 In consideration of the factual position and legal precedents, I am of the view that the A.O. has rightly held the deductor to be assessee in default, as the deductor has not deducted TDS intentionally on the reimbursement of expenditure incurred on LTC/LFC since the claim of the employee does not fall under the provisions of section 10(5) of the Income-tax Act, 1961. So the provision of sections 201 and 201(1A) of the Income-tax Act will be attracted…….”
5.1 In essence, the CIT(A) had confirmed the demand raised by the A.O. u/s. 201 and 201(1A) of the Act for all the assessment years under consideration.
Aggrieved, the assessee-Bank has come up before us with the present appeals.
During the course of hearing, the submissions made by the ld. Counsel for the assessee are summarized as under:
-That the eligibility to claim exemption for LFC is given in s. 10(5) of the Act and the amount of exemption is given in Rule 2B of the Income-tax Rules. The rule also has laid down the conditions regarding various modes of transport. In order to appreciate the amount that will be exempted as LFC in the hands of the employee, it was essential to read the section and the relevant rule together. The section stipulates that an employee should proceed on leave to any place in India. The amount eligible for exemption exceeding the economy fare of the national carried by the shortest route to the place of destination; -That the employees of the assessee-Bank proceeded on leave to a place in India as laid down in s. 10(5) and the amount that was reimbursed to them was not in excess of the economy fare of the national carrier to that destination as laid down in Rule 2B. In view of this, it was apparent that the assessee-Bank had not defaulted in complying with the TDS provisions of the Act; -That the CIT(A) failed to appreciate the fact that there was no requirement under the law or the rules that the journey should be performed through shortest route. -That the CIT(A) erred in holding that the travel should be within India; -That the CIT(A) erred in confirming the demand u/s. 201 of the Act without bringing on record that the employees have not paid the taxes; -That the CIT(A) failed to appreciate the fact that the assessee-Bank need not establish the eligibility of the employees to claim deduction u/s. 10(5) of the Act; -That the CIT(A) failed to appreciate the fact that the assessee-Bank was under bona-fide belief that the LTC was exempt in the hands of the employees ; & -That the CIT(A) failed to appreciate the fact that the assessee-Bank was under the bona-fide belief that the amount was exempt u/s. 10(5) and as such, the assessee- Bank cannot be treated as an ‘assessee in default’ u/s. 201 of the Act. 6.1.1 In conclusion, it was submitted that in view of the above contentions, the stand taken by the authorities below requires to be quashed. To buttress its arguments, the assessee-Bank has placed strong reliance on the following case laws, namely:
(i) Larsen and Toubro Ltd. v. CIT – (2009) 313 ITR 1 (SC); (ii) CIT v. HCL Info system Ltd. – (2005) 146 Taxman 227 (Del); (iii) CIT v. Nestle India Ltd. – (2000) 243 ITR 435 (Del); (iv) Gwalior Rayon Silk Co. Ltd. v. CIT (1983) 140 ITR 832 (MP); & (v) CIT & Anr. V. M/s. ITC Ltd. – 2013 (9) TMI 766 (All)
6.2 On the other hand, the learned DR submitted that as per the provisions of s.10(5) of the Act, only the reimbursement of expenses which were incurred on travel of employees and his family to any place in India subject to certain conditions are exempt.
It was, further, submitted that since the employees of the assessee-Bank had travelled to foreign countries, the benefit of exemption available u/s. 10(5) of the Act cannot be extended. It was argued that at the time of advancement of LTC amount, the employer may not have been aware of it, but, at the time of settlement of bills of LTC/LFC, complete details were obtained by the employer and were available on record. Once it was noticed that the employee had visited foreign countries and he was not entitled for exemption of reimbursement of LTC u/s. 10(5) of the Act, it was contended by the learned DR, the employer (assessee-Bank) ought to have deducted tax at source treating the amount as not exempt and as being part of the employee’s total salary. It was therefore, submitted that since the assessee Bank had intentionally not deducted tax at source on a payment to which the employee was not entitled for any exemption, the A.O.(TDS) had rightly held that the assessee-Bank to be in default and raised the demands u/s. 201(1) and 201(1A) of the Act.
6.2.1 In support of his argument, the learned DR had placed strong reliance on the following case laws, namely:
(i) SBI v. DCIT (TDS), Kanpur (67 Txmann.com 81); (ii) Om Parkash Gupta v. ITO, Chandigarh – dated: 29.4.2013.
6.3 It was the argument of the learned DR that the assessee-Bank in the present case had only relied upon a number of case laws (supra) to say where belief was bona- fide, it cannot be held to be in default. But, it had made no effort to show how the belief was formed to exclude such allowance from salary of the employee. Neither had it adduced any evidence to support its claim that it acted in a bona-fide manner nor was that there any basis for forming the belief that such allowance exempt u/s. 10(5) of the Act.
6.4 In conclusion, the learned DR summed up that the provisions of s.10(5) of the Act provide that reimbursement of travel concession or assistance to an employee was exempt which was incurred for travel of the individual employee or his family members to any place in India. Nowhere in this clause, has it been stated that even if the employee travels to foreign countries, exemption would be limited to the expenditure incurred to the last destination in India. It was, therefore, pleaded that the stand of the authorities below requires to be sustained.
We have carefully considered the rival submissions, perused the relevant materials on record and also the case laws relied on by either party.
7.1 The solitary issue for consideration now is: Whether the A.O. was justified in treating the assessee-Bank as an ‘assessee in default’ u/s. 201(1) of the Act for making short deduction u/s. 192 of the Act in allowing exemption u/s. 10(5) of the Act towards the reimbursement of LTC/LFC claims of its employees?
7.2 Briefly stated, a survey u/s. 133A of the Act had taken place in the business premises of the assessee-Bank on 18.3.2014 by the ACIT, TDS Circle 18(2), Bengaluru – the A.O. – and it was noticed during the course of survey that the assessee-Bank (the deductor) had allowed exemption u/s. 10(5) of the Act to its employees for travel outside India and also travelled by a circuitous route which was not in accordance with the provisions of s.10(5) of the Act r.w. Rule 2B. Accordingly, the A.O. treated the assessee-Bank as an ‘assessee in default’ u/s. 201(1) of the Act for the elaborate reasons set out in impugned assessment orders for the assessment years under dispute.
The A.O.’s stand was duly confirmed by the CIT(A) for the reasons recorded in the impugned orders under dispute. During the course of hearing before us, the learned Counsel had made certain arguments which are dealt with as under:
(i) that there was no requirement under the law or the rules that the journey should be performed through shortest route: Rule 2B of Income-tax Rules, 1962 says Conditions for the purpose of section 10(5) 2B………………………………………………………………………………………………………… …………………………………………………………………………………………….…………… (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; ……………………………………………………………………………………………………… As per the provisions of section 10(5) of the Income-tax Act & Rule 2B of Income-tax Rules, the reimbursement of LTC is exempt u/s. 10(5) of Income- tax Act only when all the conditions are followed. The conditions are as follows: -There must be a reimbursement of - Actual expenditure incurred on - Travelled within India by taking a - Shortest route
[Refer: Pages 4 & 5 of A.O.’s order] The above explanation dispels the assessee’s argument. (ii) the CIT(A) erred in holding that the travel should be within India:
The assessee Bank itself vide its letter dt: 26/3/2014 had stated as under: (i) ………………………………………………………………………………………………….. ………………………………………………………………………………………………… … (ii) In our case, we have reimbursed the LFC only in respect of journey the destination of which is in India. Further, the quantum was restricted to the air fare by economy class through the shortest route………..”
[Courtesy: P 6 of A.O.’s order] 7.3 The above narrations are highlighting the contradictions of the assessee’s defense. The assessee-Bank had in its grounds of appeal contended that “4.5………..that the appellant bank was under the bona-fide belief that the amount was exempt u/s. 10(5) and as such, the appellant bank cannot be treated as ‘an assessee in default’ u/s. 201 of the Income-tax Act, 1961”. On the contrary, on examination of the case on hand, it is explicit that the assessee bank had not applied its mind while applying the provisions of s.10(5) of the Act with letter and spirit and allowed exemption in a mechanical way.
As rightly highlighted by the learned DR in his submissions, the provisions of s.
10(5) of the Act are clear and only the reimbursement of expenses which were incurred on travel of employees and his family to any place in India subject to certain conditions are exempt. Since the employees of the assessee-Bank had travelled to foreign countries, the benefit of exemption available u/s. 10(5) of the Act should not have been granted. We agree that the assessee-Bank may not have been aware of the details of the employees’ places or destination of visits at the time of advancement of LTC/LFC amounts. However, at the final settlement of the claims of the employees under LTC/LFC, the assessee-Bank should have obtained all the relevant details such as the places of visits
(destinations) etc. When the assessee-Bank was aware of the fact that its employees had visited foreign countries by availing LTC/LFC concession and so he was not entitled for exemption of reimbursement of LTC u/s. 10(5) of the Act, the assessee-Bank was under obligation to deduct tax at source treating such an amount as not exempt. Since the assessee-Bank had failed to enforce its duty to deduct tax at source as envisaged in section s.192 of the Act,, it is tantamount that the assessee-Bank was an ‘assessee in default’ u/s. 201(1) of the Act and the A.O.(TDS) was within her domain to hold so. Moreover, the assessee-Bank does not have a case that its employees have included the LTC/LFC in their taxable salary and paid tax on the same. Moreover, the national carrier, i.e., Air India/Indian Airlines had also been offering LTC package to various destinations in India and allowing passengers to visit the foreign countries at the full fare chargeable to the final destination in India and it was clearly mentioned in Air India website that the value of LTC was chargeable to Income Taxe. the nati
7.4 The Hon’ble ITAT, Lucknow Bench ‘A’ in the case of SBI v.DCIT(TDS) reported in 67 Taxmann.com 81 on identical facts had decided the issue in favour of Revenue. For appreciation of facts, the relevant portion of the findings of the Hon’ble Bench is as follows:
“9. On perusal of this section, we are of the view that this provision was introduced in order to motivate the employees and also to encourage tourism in India and, therefore, the reimbursement of LTC/LFC was exempted, but, there was no intention of the Legislature to allow the employees to travel abroad under the garb of benefit of LTC available by virtue of section 10(5) of the Act. Undisputedly, in the instant case, the employees of the assessee have travelled outside India in different foreign countries and raised claim of their expenditure incurred therein. No doubt, the assessee may not be aware with the ultimate plan of travel of its employees, but at the time of settlement of the LTC/LFC bills, complete facts are available before the assessee as to where the employees have travelled, for which, he has raised the claim; meaning thereby the assessee was aware of the fact that its employees have travelled in foreign countries, for which, he is not entitled for exemption u/s. 10(5) of the Act. Thus, the payment made to its employees is chargeable to tax and in that situation, the assessee is under obligation to deduct TDS on such payment, but the assessee did not do so for the reasons best known to it.”
7.5 On identical facts, the Hon’ble ITAT, Chandigarh ‘A’ Bench in the case of Sh Om Parkash Gupta v. ITO in dated 29.4.2013, had recorded its findings as under:
“12. The said sub-section provides that where an individual had received travel concession or assistance from his employer for proceeding on leave to any place in India, both for himself and his family, then such concession received by the employee is not taxable in the hands of the employee. Similar exemption is allowed to an employee proceeding to any place in India after retirement of service or after the termination of his service. The provisions of the Act are in relation to the travel concession/assistance given for proceeding on leave to any place in India and the said concession is thus exempt only where the employee has utilized the travel concession for travel within India. Further, under Rule 2B of the Income-tax Rules the conditions for allowing exemption u/s. 10(5) of the Act are laid down. The conditions are in respect of various modes of transport. However, the basic condition is that the employee is to utilize the travel concession in connection with his proceeding to leave to any place within India, either during the course of employment or even after retirement of service or after termination of service. Reading of section 10(5) of the Act and Rule 2B of the rules in conjunction lays down the guidelines for claiming exemption in relation to the travel concession received by an employee from his employer or former employer, for proceeding on leave to any place in India and thereafter return to the place of employer and is entitled to reimbursement of expenditure on such travel between the place of employment and destination in India. Rule 2B of the Rules further lays down the conditions that the amount to be allowed as concession is not to exceed the air economy fare of the National Carrier by the shortest route to the destination in India. The said condition in no way provides that the assessee is at liberty to claim exemption out of his total ticket package spent on his overseas travel and part of the journey being within India. We find no merit in the claim of the assessee in the present case and we are in conformity with the observation of the CIT(Appeals) in this regard………… In view thereof, we reject the claim of the assessee of exemption u/s. 10(5) of the Act………”
7.6 In the case of CIT v. HCL Info systems Ltd. (supra) – relied on by the assessee-Bank - the issue was that the A.O. had rejected the claim of the assessee (HCL) of treating LTC allowance as exempt u/s. 10(5) for the reason of not verifying the evidence with regard to incurring of actual expenditure.
However, the Tribunal had accepted the argument of the assessee that the CBDT Circulars did not specifically require verification of the evidence and, thus, held that there was sufficient material on record – by way of declarations furnished by the employees concerned – for the assessee to form a bona-fide belief that LTA granted to its employees was exempt u/s. 10(5) of the Act. On an appeal, the Hon’ble Delhi High Court concurred the findings of the Tribunal by holding that ‘the bona-fides of the assessee was accepted by the first appellate authority and were duly confirmed by the Appellate Tribunal.’ 7.7 On a careful perusal of the ruling of the Hon’ble Court (supra), we are of the view that the said ruling of the Hon’ble Court is distinguishable so far as the issue under dispute is concerned. The present assessee-Bank had not brought any credible material on record to remotely suggest that that the basis [by way of declarations furnished by the employees concerned] for formation of such a bona- fide belief and honest opinion on exemption u/s. 10(5) of the Act of such an allowance on a circuitous route when it was evident that the employees had undertaken foreign travel.
7.8 In the case of CIT v. Nestle India Ltd. (supra) – relied on by the assessee- Bank – the issue, in brief, was that on a perusal of the annual return of the assessee, the ACIT(TDS) noticed that the assessee had made short deduction of TDS while computing the income of its employees chargeable under the head ‘salaries’, the conveyance allowance (CA)/reimbursement granted to them had not been included in their taxable salaries. In compliance to the A.O.’s query, the assessee, inter alia, explained that the CA was being paid as reimbursement to those employees who had not been provided with vehicles against declaration that they had actually incurred the said amount for the purpose of conveyance etc., and, therefore, such expense was exempt u/s. 10(14) of the Act. The A.O.(TDS) took a divergent view that the assessee was paying salaries to its employees under the garb of CA in order to avoid taxation and, accordingly, held the assessee as an ‘assessee in default’. When the issue went in appeal before the Tribunal which held that the assessee was under a bona fide belief that CA was not taxable and, hence, neither order u/s. 201 nor interest u/s. 201(1A) was leviable. The stand of the Tribunal was concurred by the Hon’ble High Court.
However, in the present case, the assessee-Bank had failed to cite the pronouncement of any order of the judiciary to demonstrate why and how it formed the belief that such concession on a circuitous route was exempt u/s. 10(5) of the Act. Thus, we are of the view that this case law relied on by the assessee-Bank cannot be of any help to it.
7.9 In the case of CIT v.ITC Ltd. (supra) – relied on by the assessee-Bank – the issue involved was non-deduction of tax at source from the conveyance allowance (CA) paid to its employees. The Hon’ble Tribunal allowed the assessee’s case after accepting the explanation of the assessee to be bona-fide, i.e., the assessee had amply demonstrated that belief was based on a meeting with the representatives of the assessee-company, declarations obtained from the employees etc. It was only on the strength of such demonstration that the explanation being honest, fair and having a bona-fide belief, the Tribunal accepted the assessee’s contention which has been sustained by the Hon’ble High Court. However, in the present case, the assessee-Bank had not made any honest effort to justify how its bona-fide belief was formed to exclude such allowance from salary of the employee was exempt u/s. 10(5) of the Act. This case law relied by the assessee-Bank is distinguishable.
7.10 We have with due respects perused the ruling of the Hon’ble Supreme Court in the case of CIT & Another v. Larsen and Toubro Ltd. (supra) – relied on by the assessee-Bank – wherein the issue before the Hon’ble Court was that ‘the employer is not under any statutory obligation under the Income-tax Act, 1961 or the rules to collect evidence to show that the employee had actually utilized the amount paid towards LTC or conveyance allowance u/s. 10(5).’ However, the present issue is: Whether the deductor (assessee-Bank) was right in allowing exemption u/s. 10(5) to its employees for travel outside India and travel by a long circuitous route which was, according to the A.O., not in accordance with the provisions of s.10(5) read with Rule 2B? Thus, the issue before the Hon’ble Court (supra) was on a different footing and has no relevance whatsoever to the matter under consideration. The ruling of the Hon’ble Supreme Court relied on by the assessee-Bank, in our considered view, cannot come to its rescue.
As rightly highlighted by the Hon’ble Tribunal, Lucknow Bench (supra) and careful perusal of the provisions of s.10(5) of the Act, we are of the view that the said provision was introduced in order to motivate the employees and also to encourage tourism in India and, therefore, the reimbursement of LTC/LFC was exempted, but, there was no intention of the Legislature to allow the employees to travel abroad under the garb of benefit of LTC available by virtue of s.10(5) of the Act. However, in the present case the employees of the assessee-Bank have travelled outside India and raised claims of their expenditure incurred therein. There is no dispute that the assessee-Bank may not be aware with the plan of travel of its employees initially, however, at the time of settlement of LTC/LFC bills, the employees should have placed comprehensive details before the assessee-Bank as to where they have travelled/visited and raised the claims, that means to say, the assessee-Bank was well aware of the fact that its employees have travelled in foreign countries too by availing LTC/LFC for which they were not entitled for exemption u/s. 10(5) of the Act. Such being the scenario, the assessee-Bank cannot now plead that it was under the bona-fide belief that the amounts claimed were exempt u/s. 10(5) of the Act. Thus, the Assessing Officer(TDS) was within her domain to term/charge that the assessee- Bank was under obligation to deduct TDS on such payments. Since the assessee- Bank had failed to do so, the A.O.(TDS) had rightly treated the assessee an ‘assessee in default’ u/s. 201(1) of the Act.
The assessee had relied on various case laws for the proposition that its estimate is bona fide and it cannot be held to be an ‘assessee in default’ u/s. 201(1) of the Act. This contention of the assessee is without legal basis, since the assessee had made no effort to prove how its belief was formed that such foreign travel expenses would come within the ambit of sec. 10(5) of the I.T. Act.
Taking into account all the facts and circumstances of the issue as deliberated upon in the fore-going paragraphs and also in conformity with the judicial views (supra), we are of the view that the authorities below were justified in their stand which requires no interference of this Bench. It is ordered accordingly.