ITAT says TDS Default Cannot Arise Against a Binding Judicial Restraint

The Supreme Court subsequently held that LFC involving a foreign leg does not qualify for exemption under Section 10(5), requiring employers to deduct tax under Section 192. However, during the relevant years, SBI was bound by interim orders of the Madras High Court stating that such LFC payments would not constitute income for TDS purposes. ITAT held that the later Supreme Court ruling could not retrospectively create a Section 201 default for a period during which the Bank was complying with a binding judicial order.