The ITAT deemed State Bank of India liable for not deducting tax on LFC payments related to foreign travel and distinguished a past High Court order based on the absence of specific interim relief.
SBI Labeled as 'Assessee in Default' for Non-Deduction of TDS on LFC
The Income Tax Appellate Tribunal (ITAT) ruled that the State Bank of India (SBI) failed to deduct tax at source (TDS) on leave fare concessions (LFC) provided for foreign travel. This determination categorized SBI as an 'assessee in default,' which carries significant tax implications.
The Tribunal's decision is notable as it distinguishes a previous ruling from the Kerala High Court, stating that the comparison was unfounded due to a lack of specific interim relief provided in that case. The ITAT underscored the necessity of adhering to TDS regulations, emphasising that the obligation to withhold taxes remains irrespective of subsequent legal interpretations.
This ruling serves as a critical reminder for tax practitioners regarding their responsibilities in ensuring compliance with TDS provisions, particularly for organizations engaged in extensive foreign transactions.
Citations
- ITAT (2026) ITA No. XXXX
