The ITAT Ahmedabad has ruled in favor of the State Bank of India, deleting a TDS demand under Section 201 relating to leave travel concession (LTC). The tribunal found that the bank was not in default due to interim directions from the Madras High Court.
ITAT Ahmedabad Invalidates TDS Demand Related to LTC
The Income Tax Appellate Tribunal (ITAT) Ahmedabad has set aside a TDS demand against the State Bank of India concerning leave travel concession (LTC). The tribunal's decision was based on the premise that the bank had followed interim directives issued by the Madras High Court, which advised against TDS deductions under similar circumstances.
In its ruling, the ITAT highlighted that compliance with the Madras HC's interim directions established a legal defense against the penalties under Section 201. By not acting on the order, the bank retained an argument that no default in TDS deduction had occurred.
This case serves as a crucial reference for practitioners involved in Tax Deducted at Source (TDS) matters. It emphasizes the importance of adhering to judicial instructions and safeguards for taxpayers against erroneous assessments arising from lack of clarity in compliance requirements.
Citations
- ITAT Ahmedabad (2026) Unreported
