33 State Bank of India vs. ACIT
(2022) 449 ITR 192
Exemption – Leave Travel Concession - LTC is for travel within India, from one place in India to another place in India . It should be by the shortest possible route between the two destinations - The moment employees undertake travel with a foreign leg, it is not a travel within India and hence not covered under the provisions of Section 10(5) of the Act.
The Assessee, a Public Sector Bank, namely, the State Bank of India (SBI), was held to be an “Assessee in default”, for not deducting the tax at source of its employees.
These proceedings started with a Spot Verification under section 133A when it was discerned by the Revenue that some of the employees of the assessee- employer had claimed LTC even for their travel to places outside India. These employees, even though, raised a claim of their travel expenses between two points within India but had also travelled to a foreign country between these two points , thus taking a circuitous route for their destination which involved a foreign place. The matter was hence examined by the AO who was of the opinion that the amount of money received by an employee as LTC is exempted under section 10(5) of the Act, however, this exemption could not be claimed by an employee for travel outside India which had been done in this case. Therefore the assessee-employer defaulted in not deducting tax at
