“State Bank of India Bhavnagar” Judicial Stay TDS Shield

The Ahmedabad ITAT draws a critical distinction between ultimate taxability and contemporaneous withholding obligations. 

While acknowledging that LTC exemption involving foreign travel stands settled against taxpayers by the Supreme Court, the Tribunal nevertheless holds that the assessee-bank cannot be fastened with liability under Section 201 for the relevant period because it was operating under binding interim orders of the Madras High Court directing non-deduction of TDS. 

The ruling reinforces that statutory withholding obligations must yield to judicial commands and that compliance with court orders cannot subsequently be characterised as default.