State Bank of India Vs ITO (ITAT Agra)
Material Facts
The appeal was filed against the order dated 27.01.2026 of the Addl. JCIT(A)-2, Siliguri for Assessment Year 2016-17, affirming the order dated 30.03.2023 passed under Sections 201(1) and 201(1A) of the Income-tax Act, 1961. The dispute concerned whether the assessee, a Public Sector Bank, could be treated as an assessee in default for failure to deduct tax at source under Section 192 on Leave Fare Concession (LFC) paid to an employee whose journey included a foreign leg.
One employee travelled from Gwalior to Thiruchirapalli through Delhi, Muscat and Paris and received LFC/HTC reimbursement of ₹3,54,027 on 22.07.2015. The bank did not deduct tax at source, relying on interim orders of the Madras High Court and subsequent Kerala High Court proceedings.
Procedural History
The Assessing Officer treated the bank as an assessee in default under Section 201(1) and levied consequential interest under Section 201(1A). The CIT(A) confirmed the order. The bank appealed before the ITAT Agra.
Legal Issues
The Tribunal considered whether the CIT(A) was justified in confirming the Assessing Officer’s action in treating the bank as an assessee in default under Section 201 and charging interest under Section 201(1A) for non-deduction of tax at source on LFC payments where employees undertook journeys involving foreign travel.
