State Bank of India Vs ITO (ITAT Rajkot)
Summary: The Income Tax Appellate Tribunal, “SMC”, Rajkot Bench, comprising Dr. Arjun Lal Saini, Accountant Member, allowed six appeals filed by different branches of State Bank of India concerning non-deduction of tax at source on Leave Travel Concession (LTC)/Leave Fare Concession (LFC) payments involving foreign travel. The appeals, ITA Nos. 161, 178, 190, 281, 328 and 343/Rjt/2026, related to Assessment Years 2016-17 and 2017-18 and were disposed of through a consolidated order pronounced on 31 July 2026. The appeals arose from orders passed by the Assessing Officers under Sections 201(1) and 201(1A) of the Income-tax Act, 1961, which had been confirmed by the Commissioner of Income Tax (Appeals).
The lead case was ITA No. 343/Rjt/2026 for AY 2017-18. The Revenue had received information that SBI had paid LFC, including foreign travel, to employees without deducting tax under Section 192(1). The Assessing Officer treated the bank as an assessee in default under Sections 201(1) and 201(1A). In the lead case, the demand was stated to be Rs.2,09,340/-, comprising tax of Rs.1,09,602/- and interest of Rs.99,738/-. The CIT(A) confirmed the action, holding that LTC was intended for travel within India and that a foreign leg took the payment outside the exemption contemplated under Section 10(5).
