State Bank of India v. DCIT

Parties Involved

Facts Summary

The assessee, a branch of State Bank of India, provided Leave Fare Concession and Leave Travel Concession to its employees and treated the same as exempt under section 10(5) of the Income-tax Act, 1961, while computing the tax deductible at source under section 192 of the Act. During verification, the DCIT, TDS Circle, Rajkot, observed that the assessee had not deducted tax at source on such payments. A notice was issued to the assessee to explain why it should not be treated as an assessee in default under section 201(1) of the Act. The assessee furnished its reply explaining the basis on which the Leave Travel Concession was treated as exempt under section 10(5) of the Act. However, the DCIT, TDS Circle, Rajkot, was not satisfied with the explanation and treated the assessee as an assessee in default under section 201(1) of the Act, raising a demand of Rs. 2,05,138/-. Separate penalty proceedings under section 271(c) of the Act were also initiated. Aggrieved by the order, the assessee preferred an appeal before the Ld. CIT(A), which was dismissed, leading to the current appeal before the tribunal.…

Legal Issues

• 1. Whether the assessee can be treated as an assessee in default under section 201(1) of the Act for not deducting tax at source on Leave Travel Concession payments.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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