TaxTMI 
TaxTMI 
2008 (7) TMI 475
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.... (ii) Could there be a valuation under r. 3 in absence of any perquisite? (iii) Did the assessee fail to deduct tax under s. 192 of the Act? (iv) Would the assessee be an 'assessee-in-default' under s. 201 because of Explns. 1 to 4 in s. 17(2) of the Act inserted by Finance Act, 2007 with retrospective effect? (v) Could the assessee be held liable for interest under s. 201 (1A) of the Act? 3. In the cases of various appeals of Canara Bank the facts are that assessee is a public sector banking institution. Besides payment of salary it has provided been remunerating its employees according to scale laid down by the Central Government, residential accommodation was provided to officers with a view to enabling them to function efficiently. In respect of such accommodation certain rent was charged and recovered from the employees concerned as specified in the service regulations, which are approved by the Central Government and placed before the Parliament. The accommodation provided and the rent charged was similar to an officer belonging to a particular scale and at no point of time the officers were provided with rent free accommodation.....
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....t of such accommodation cannot be determined with reference to the rent of any other kind of accommodation available in the town even if it happens to be nearby. The regular residences in a town have their own environment which cannot be compared with a tenement provided by the employer for locating the employees, because the employee has no choice in accepting that accommodation. The Department could not coerce the employer to deduct tax at source of an amount which was in dispute as perquisite by the employer. The accommodation in assessee's case was also similar.-(i) it being an industry which produces coal and supplies to a large number of customers which comprises mainly of Government Industries; (ii) the accommodations are constructed at sites/offices which are nearby work locations enabling the work force including executives to be near the site/office at any point of time to attend any emergencies; (iii) the sites being in operation for 24 hours in a day and nearly all days in a month (one day in a week for maintenance works and extra production shifts), hence, it is the need of the company to ensure that all employees are located at a place for the smooth functioning a....
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....as per 1991 census and 7.5 per cent of salary for other places as reduced by the rent paid by the employees. He, therefore held that now, there is no scope for determination of fair rental value, nor the yardstick of the rent determined in accordance with the rules framed by the Government, nor by taking recourse to standard rent. Applying the principle of harmonious construction, the undisputable position, according to him, is that the Act should be read together with the rules. One cannot read s. 17(2) alone without taking the corresponding r. 3 into consideration. He observed that this "value of any concession in the matter of rent" finds judicial support from the decision of the Calcutta High Court in the case of Coal Mines Officers' Association of India & Ors. vs. Union of India & Ors. (2004) 187 CTR (Cal) 348 : (2004) 266 ITR 429 (Cal). 10. Aggrieved by the order of the AO, assessee preferred first appeal to the CIT(A) who upheld order of the AO by following observations: "2.23 In view of the above decision it clearly emerges that the perquisites in the nature of 'concession of rent' shall be determined as per the newly inserted Explanation read with E....
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.... in a case where an unfurnished accommodation is provided by any employer other than the Central Government or any State Government and the accommodation is owned by the employer. In the appellant's case, the value of the unfurnished accommodation determined at the 'specified rate' as per Expln. 4 relevant for asst. yr. 2006-07 and as per r. 3 for asst. yr. 2005-06 has been found to 'exceed' the rent/fee recovered from employees and it clearly constitutes 'concession in the matter of rent' to be hit by the provision of s. 17(2)(ii) of the Act. 2.25 I may also mention here that the contention of the appellant that before applying r. 3, the Revenue has to prove that there was a concession provided to the employees does not hold good after the retrospective amendment to the s. 17(2) by the Finance Act, 2007, As discussed in the preceding para, r. 3 of IT Rules as existing prior to 1st April, 2001, the value of concession was explicit and had to be worked out on basis of fair rental values. While the value of concession in the new r. 3 w.e.f. 1st April, 2001 has been intrinsically built in the rule itself and is automatic. In view of the Supreme Cou....
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....d that prior to 1st April, 2001, the value of concession had to be worked out on the basis of fair rental value and was explicit in the r. 3 itself whereas in the new r. 3, the value of concession has been intrinsically built in the rule. It is suffice to state here that the Explanation introduced vide the Finance Act, 2007 is only meant to clarify what has inherently been in the r. 3. If it was not the case, then the Government would have introduced a new section or rule to lay down its guiding principle regarding treatment of said perquisite. An 'Explanation' is not meant to lay down any new guidelines and it, therefore, cannot partake of the character of a full fledged section or rule. I am therefore, of the view that as per the r. 3 as existing since 1st April, 2001, the appellant was required to carry out the valuation of perquisites relating to the accommodation, add the perquisite values to the respective salaries of the employees concerned and thereby deduct tax at source under s. 192. The appellant, however, failed to carry out the valuation of these perquisites and to add to the perquisites value to the respective salaries of the employees concerned; and thereby n....
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....uisite. The Court noted that the amendment inserted w.e.f. 1st April, 1985 was subsequently deleted by the Finance Act, 1985 with effect from the same date. The Court, therefore, gave direction to the respondents not to treat the interest subsidy as a perquisite while deducting the tax at source in respect of income under the head 'Salaries' under s. 192 of the IT Act. The ratio of the above case cited by the appellant is not applicable in the present case. It is a case where an amendment issued was subsequently deleted with effect from the date of its original application. It is worth reiterating here that in the present case the liability of tax was there from day one and the Explanation vide the Finance Act, 2007 is only meant to clarify what has inherently in the r. 3. 2.28 Finally I would like to take up the argument of the appellant that it cannot be treated in default since it was refrained to give' effect to r. 3 by the stay granted by the Hon'ble Calcutta High Court in the case of Coal Mines Officers' Association of India & Ors. vs. Union of India & Ors. However, it is noticed that the said stay stood nullified by the judgment of the decision B....
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....plns. 1 to 4 of the Act. Therefore, in the given facts and circumstances, the appellant was statutorily required to make deduction of TDS in respect of the aforesaid perquisites as per relevant provisions of s. 192 of the Act. Considering the fact that the appellant had failed to deduct TDS on such perquisites in the form of 'concession of rent' the appellant is held to be in default for levy of interest as per provisions of s. 201 (1A) of the Act. The AO was therefore justified in determining the TDS liability under s. 201(1) and corresponding interest under s. 201(1A) in respect of asst. yr. 2005-06 in the cases of all the appellants and hence the orders passed by him are upheld. Similarly, the chargeability of additional tax under s. 201(1) and interest under s. 201(1A) in respect of all appellants for asst. yr. 2006-07 also stand confirmed. The claim of the appellants that the computation of the value of perquisites determined by the AO for the asst. yr. 2006-07 requires modification by applying the specified rate given in the Expln. 4 has been considered. The AO is directed to examine the claim of the appellant and recompute the value of perquisites after due verificat....
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....not contemplate or require the performance of an impossible act-lex non cogit ad impossibilia. 13. Reference is also invited to CIT vs. Hindustan Electro Graphites Ltd. (2000) 160 CTR (SC) 8 : (2000) 243 ITR 48 (SC) wherein it was observed that it might be true that, income by way of cash compensatory, support became taxable retrospectively w.e.f. 1st April, 1967, but it was by amendment of s. 28 by the Finance Act, 1990 which amendment could not have been known before the Finance Act came into force. Additional tax was levied as the assessee did not in his return show the income by way of cash compensatory support. After the assessee had filed his return of income, which was correct as per law on the date of filing of the return, it was thereafter that the cash compensatory support also came within the sway of s. 28. The Court held that additional tax has imprint of penalty and therefore, the Revenue cannot be heard saying that levy of additional tax is automatic under s. 143(1A). In the present case also liability to tax on concessional value of perquisite was because of retrospective amendment deeming it as perquisite. 14. Reference was also made to Star India (P) Ltd. vs.....
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....educted at source nor could there be any liability under s. 201(1) of the Act or interest under s. 201(1A) of the Act as the liability, if any, was created by virtue of retrospective amendment in s. 17(2) of the Act brought into by Finance Act, 2007. 17. It is submitted that tax calculations for the said year have been completed and income-tax to be deducted was effected from the salary of the employees in that year itself and the said amendment has been brought into by Finance Act, 2007, assent of the President received on 11th May, 2007. Thus, the order of the AO under appeal was on the basis of unamended provision s. 17(2)(ii) of the Act and is to be examined with reference to old provisions read with the principles laid down by the Supreme Court in the case of Arun Kumar & Ors. and therefore r. 3 cannot be applied in cases where there is no concession in the matter of rent. Before applying r. 3, the Revenue has to prove that there, was a concession as such provided to the employees. The AO has not proved that the assessee had given concession to the employees by way of providing accommodation. 18. It is submitted that the assessee cannot be treated as "assessee-in-default....
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....ax has not been deducted, s. 201/201(1A) cannot be invoked which can be done only where there is non-deduction of TDS. Thus, even on this count, the order under appeal is bad in law since the applicability of s. 17(2)(ii) of the Act in the present case was highly debatable. 22. It is submitted that assessee has been refrained to give effect to r. 3 by the Hon'ble Calcutta High Court as Coal Mines Officers' Association of India & Ors. has filed writ petition before the Division Bench of Calcutta High Court on the issue of whether providing accommodation to employees will be treated as perquisite in view of provision of s. 17(ii) of the Act. The Coal Mines Officers' Association of India & Ors. had made assessee as a respondent and also the Chief CIT, Nagpur as its respondent. The Division Bench in its interim order had stayed all the respondents to give effect to the r. 3 until further order of Division Bench. In view of this decision of the High Court. the assessee has been refrained from deducting any tax and if tax is deducted at source by the assessee by treating the difference between the actual rent received and specified percentage of salary, the same would tant....
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....tal Representative, on the other hand, submitted that High Court stay was vacated on 12th Sept., 2003, and therefore, assessee was required to deduct tax thereafter, as the matter was decided against assessee. Referring to the Supreme Court decision in Arun Kumar & Ors. he submitted that the constitutional validity of the r. 3 as amended by CBDT was upheld, and therefore, as per the said amended rule, there was concession in the matter of rent and a perquisite, and consequently, the assessee was under an obligation to deduct tax thereon. He also referred to the decision of Karnataka High Court in the case of CIT vs. Rajatha Jewellers (2006) 202 CTR (Kar) 97, to support his case. He further referred to amendment made by Finance Act, 2007 in s. 17(2) with retrospective effect, under which, according to him, perquisite is to be computed and assessee became liable to deduct tax at source under s. 192 and having failed to do so, the assessee was an assessee-in-default subjected to provisions of s. 201 (1) and also to charge of interest for the default under s. 201 (1A) of the Act. 25. Though the AO has proceeded to value perquisite as per the r. 3 r/w s. 17(2) as it stood at that tim....
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....or the purpose of computing the income chargeable under the head 'Salaries', the value of the perquisite (not provided for by way of monetary payment to the assessee) mentioned below shall be determined in accordance with the following clauses, namely: (a) The value of the rent free residential accommodation shall be determined on the basis provided hereunder, namely: (i) Where the accommodation is provided- (A) by Government to a person holding an office or post in connection with the affairs of the Union or of a State: (B) by body or undertaking under the control of Government to any officer of Government whose services have been lent to that body or undertaking (the accommodation itself having been allotted to it by the Government), an amount equal to (1) if the accommodation is unfurnished, the rent which has been or would have been determined as payable by such person or officer in accordance with the rules framed by Government for allotment of residence to its officers." (2) ......... (ii) where the accommodation is provided........ "(A) by the RBI, to any person employed by it: (B) by a ....
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....elevant previous year." 29. The said rule had been amended w.e.f. 1st April, 2001 vide CBDT's Notification No. S.O. 940(E), dt. 25th Sept., 2001. The new amended r. 3 reads as: "(1) The value of residential accommodation provided by the employer during the previous year shall be determined on the basis provided in the table below: Sl. No. Circumstances Where the accommodation Where the accommodation (1) (2) (3) (4) (1) Where the accommodation is provided by Union or State Government to their employees either holding office or post in connection with the affairs of Union or State or serving with any body or undertaking under the control of such Government on deputation. Licence fee determined by Union or State Government in respect of accommodation in accordance with the rules framed by that Government as reduced by the rent actually paid by the employee. The value of perquisite as determined under column (3) and increased by 10 per cent. per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air conditioning plant or equipment) or if such furniture is hired from a thir....
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....to s. 17(2)(ii) by Finance Act, 2007 with retrospective effect from 1st April, 2002. These are: "Explanation 1: For the purpose of this sub-clause, concession in the matter of rent shall be deemed to have been provided if. (a) in a case where an unfurnished accommodation is provided by any employer other than the Central Government or any State Government, and- (i} the accommodation is owned by the employer, the value of the accommodation determined at ten per cent of salary in cities having population exceeding four lakhs as per 1991 census and seven and one-half per cent of salary in other cities, in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee; (ii) the accommodation is taken on lease or rent by the employer, the value of the accommodation being the actual amount of lease rental paid or payable by the employer or ten per cent of salary, whichever is lower, in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable....
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....imilar to those adopted by the Central Government. Licence fee is fixed for each type of accommodation allotted to the category of employees and there was no concession in the matter of rent respecting any accommodation provided by the assessee to its employees. In these circumstances, as generally understood, there was no concession in the matter of rent under s. 17(2)(ii), and consequently, provision of r. 3 of the IT Rules, 1962 would not have been applicable. 35. In this connection the decision of Uttaranchal High Court in the case of CIT vs. Chief Officer, State Bank of India (2006) 205 CTR (Uttaranchal) 340 : (2006) 285 ITR 321 (Uttaranchal), can usefully be referred to wherein it is held that when the employee has paid standard rent which had been fixed for all its employees and employees similarly situated and made payment of rent in the same manner and to the same extent, as others, the assessee cannot be said to have given concessions to its employees in the matter of rent. Uttaranchal High Court has followed, in this connection, decision of Calcutta High Court in the case of Indian Bank Officers' Association & Ors. vs. Indian Bank & Ors. and Madhya Pradesh High Co....
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....ion, the recovery of tax was unjustified. 38. The Revenue's claim as canvassed by Shri Santosh Kumar, the learned Departmental Representative, is that these are the cases prior to amendment introduced in r. 3 in 2001. These cases are not accepted after the amendment in r. 3 by decision in Coal Mines Officers' Association of India & Ors. vs. Union of India & Ors. wherein the Calcutta High Court held that the r. 3 of the IT Rules, 1962, which was introduced w.e.f. 1st April, 2001 is totally different and has no nexus with the previous rules at all. In the previous rule, the method that had been provided was the method for ascertaining the value of the rent free accommodation. The method of valuing the concession automatically followed. The present rule does not address exclusively to devise the method and basis of ascertaining the value of concession in the matter of rent; it also addresses to devise explicitly the method and basis of ascertaining the value of concession in the matter of rent. While, doing so however, it makes the value of concession explicit, which was implied in the previous rule. There is no scope for determination of fair rental value under new rule. T....
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....n, the submission of Mr. Parasaran, the learned Addl. Solicitor General deserves to be accepted that when the concept of 'fair rent', 'market rent', 'reasonable rent' or 'standard rent' is no more relevant or germane in deciding the question, it was open to the legislature to empower the rule making authority to provide the method for calculation of 'concession'. We are further of the view that the criterion which was adopted by the rule making authority in treating cities having population of less than four lakhs and more than four lakhs cannot be said to be arbitrary or unreasonable and fixation of rent on the basis of population of city cannot be interfered with in exercise of power of judicial review. The said argument, therefore, has no substance and cannot be upheld." 42. The Supreme Court, however, considered the applicability of s. 17(2) and held that it can apply only when there is a concession in the matter of rent by observing in paras 70, 71 and 72 as under: "In our opinion, the fundamental question of applicability of s. 17(2) of the Act still remains. It cannot be gainsaid that s. 17(2) would apply only if there is a....
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.... employees of TISCO challenged the same with the two-fold argument viz.: (1) Rule 3 conferred arbitrary and unfettered powers on the Revenue and thus is inconsistent with the Act; (2) The computation method is not based on intelligent differentia and nor has any nexus sought to be achieved and thus is ultra vires Art. 14 of the Constitution. The submission of the assessee's counsel was that the rule, will not apply and the liability to deduct tax will arise only if 'concession' is shown in the matter of rent respecting any accommodation and that it is 'perquisite' under the Act. 44. The Supreme Court held: (i) that s. 17(2)(ii) declares that the value of any "concession" in the matter of rent respecting any accommodation provided to the employee by his employer would be "perquisite"; (ii) that before s. 17(2)(ii) can be' invoked or pressed into service and before calculation of concession as per r. 3 is made, the authority exercising power must come to a positive conclusion that it is a concession. 'Concession' is thus a foundational, fundamental or jurisdictional fact; (iii) that once the authority has jurisdiction in the matter on existence of &....
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.... of the Act is a Jurisdictional fact'. It is only when there is a 'concession' in the matter of rent respecting any accommodation provided by an employer to his employee that the mode, method or manner as to how much concession can be computed arises. In other words, concession is a 'jurisdictional fact'; the method of fixation of amount is a 'fact in issue' or 'adjudicatory fact'. If the assessee contends that there is no 'concession', the authority has to decide the said question and record a finding as to whether there is a 'concession' and the case is covered by s. 17(2)(ii) of the Act. Only thereafter may the authority proceed to calculate the liability of the assessee under the Rules. In our considered opinion, therefore, in spite of the legal position that r. 3 is intra vires, valid and is not inconsistent with the provisions of the parent Act under s. 17(2)(ii) of the Act, it is still open to the assessee to contend that there is no 'concession' in the matter of accommodation provided by the employer to the employee and hence the case did not fall within the mischief of s. 17(2)(ii) of the Act." "There is ....
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....ter of rent. The word "concession" has neither been defined in the Act nor in the Rule, and according to dictionary meaning it has to be 'a thing that is conceded'; 'a gesture made in recognition of a demand or prevailing standard, 'a reduction in price for a certain category of person'. It is 'a grant; ordinarily applied to a grant of specific privileges by Government, a special privilege granted by a Government, corporation or other authority. Before the s. 17(2)(ii) can be invoked or pressed into service and before calculation under r. 3, the Revenue authority must come to a positive conclusion that there is a concession. 48. Sec. 17(2)(ii) as it stood prior to amendment in 2007 did not contain any 'deeming clause' to deem rent paid less than 10 per cent or 7.5 per cent as a concession or that the employees is deemed to have received that concession. An employer may provide residential accommodation to/his employees for several reasons. It is also possible that for making available staff quarters/colonies/accommodations, State Governments or Central Government may provide land to public sector undertakings/companies/ corporations at a concessio....
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....ecified rate and rent charged from the employees as perquisite by inserting Expln. 1. The Explns. 1 and 4 to s. 17(2) are referred for contending the concession in the matter of rent is to be determined with respect to the fixed rate, 10 per cent in cities having population exceeding 4 lakhs and 7.5 per cent in other cities upto 2006-07 and being 15 per cent of salary in cities having population exceeding 25 lakhs; 10 per cent of salary in cities having population exceeding ten lakhs but not exceeding twenty-five lakhs and 7.5 per cent of salary in any other place thereafter. This amendment was, brought by Finance Act, 2007 but it was with retrospective effect from 1st April, 2002, and therefore, according to learned Departmental Representative, it would apply to all cases under consideration and the cases relied upon are of no help to the assessee. A retrospective amendment, has to be given full effect and it is to be assumed that an amended, provision was in force right from the date with effect from which retrospective effect is given. This is even by the appellate authority where the retrospective amendment was introduced during pendency of appeal. 52. As held in Rajatha Jew....
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.... the time when such tax was otherwise deductible under the provisions of sub-s. (1). (1B) For the purpose of paying tax under sub-s. (1A), tax shall be determined at the average of income-tax computed on the basis of the rates in force for the financial year, on the income chargeable under the head 'Salaries' including the income referred to in sub-s. (1A), and the tax so payable shall be construed as if it were, a tax deductible at source, from the income under the head 'Salaries' as per the provisions of sub-s. (1), and shall be subject to the provisions of this chapter." 55. A duty is cast on the person deducting to the tax so deducted under s. 200 which reads as under: "(1) Any person deducting any sum in accordance with the foregoing provisions of this chapter, s. 194E, s. 194EE, s. 194F, s. 194G, s. 194H (s. 194-I, s. 194J and s. 194K, s. 194, s. 195, s. 196A, s. 196B, s. 196C and s. 196D shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. (2) Any person being an employer, referred to in sub-s. (1A) of s. 192 shall pay, within the prescribed time, the tax to th....
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.... as aforesaid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in sub-s. (1A) shall be a charge upon all the assets of the person, or the company, as the case may be, referred to in sub-s. (1)." 57. Rule 3 of the IT Rules, 1962 provides for the time and mode of payment to Government account of tax deducted at source. It reads as under: "(1) All sums deducted in accordance with the provisions of ss. 192 to 194, s. 194A, s. 194B, s. 194BB, s. 194C, s. 194D, s. 194E, s. 194EE, s. 194F, s. 194G, s. 194H, s. 194-I, s. 194J, s. 194K, s. 195, s. 196A, s. 196B, s. 196C and s. 196D shall be paid to the credit of the Central Government- (a) in the case of deduction by or on behalf of the Government, on the same day; (b) in the case of deduction by or on behalf of persons other than those mentioned in cl. (a),- (i) in respect of sums deducted in accordance with the provisions of s. 193, s. 194A, s. 194C, s. 194D, s. 194E, s. 194G, s. 194H, s. 194-I, s. 194J, s. 195, s. 196A, s. 196B, s. 196C and s. 196D- (1) where the income by way of interest on securities referred to in s. 193 or the i....
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....f s. 192. (2) The person responsible for making the deduction from any income chargeable under the head 'Salaries' or, the person who pays tax, referred to in sub-s. (1A) of s. 192 or in cases covered by sub-s. (5) of s. 192, the trustees shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-r. (1) into any branch of the RBI or of the SBI or of any authorised bank accompanied by an income-tax challan: Provided that where the deduction or payment, as the case may be is made by or on behalf of Government, the amounts shall be credited within the time and in the manner aforesaid without the production of a challan. (3) The person responsible for making deduction under ss. 193, 194, 194A, 194B, (194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194H, s. 194-I, 194J, 194K, 195, 196A, 196B, 196C and 196D shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-r. (1) into any branch of the RBI or of the SBI or of any authorised bank accompanied by an income-tax challan, provided that where the deduction is made b....
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....tion. Article 20 of the Constitution imposes two limitations on the retrospective applicabi1ity of penal laws-first, the making of an act an offence for the first time and then making that law retrospective is prohibited; second, in the infliction of a penalty greater than that which might have been inflicted under the law which was in force when the act was committed is not permitted. See in this connection the decisions in (i) Punjab Business & Supply Co. (P) Ltd. vs. ITO (1991) 100 CTR (P&H) 290 : (1991) 188 ITR 550 (P&H); (ii) CIT vs. Kumudam Endowments (2000) 164 CTR (Mad) 312 : (2000) 242 ITR 159 (Mad); (iii) Engineers Impex (P) Ltd. vs. D.D. Sharma (2000) 161 CTR (Del.) 25 : (2000) 244 ITR 247 (Del.); and (iv) Dy. CIT vs. Ashok Paper Mills Ltd. (2002) 177 CTR (Gau) 242 : (2002) 256 ITR 673 (Gau). 62. It is a well settled law that the law as it stood on the date of filing of the return would determine the liability. The assessee cannot be treated as assessee-in-default retrospectively and interest under s. 201(1A) cannot also be charged on a liability which came into existence by a retrospective amendment. The Supreme Court in the case of CIT vs. Hindustan Electro Graphite....
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....t under s. 139(8). In these circumstances, the interest levied in respect of income because of retrospective amendment for sale of import entitlement requires complete waiver. Interest under s. 217 on the same reasoning is also to be waived in respect of the income derived by the assessee on sale of import entitlement which was made taxable because of retrospective amendment by Finance Act, 1990." 65. Again in the case of Deversons (P) Ltd. Gujarat High Court held that since liability arose on account of retrospective amendment of law, consequential interest under s. 243B was clearly required to be dealt with as a fit case for reduction or waiver of interest. 66. The observation of the CIT(A) that these cases are not applicable because they were dealing with a penal levy and not to the valuation of perquisite which was not penal in nature, has therefore little force. Also because, insofar as, the assessee was concerned, it could not have deducted tax, because under s. 192, it is required to be deducted when there was payment of the salary or when the salary and perquisite became due during the relevant previous year. It could also have been not paid because the year has alrea....
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....een rendered impossible by circumstances over which the persons interested had no control, like the act of god or the King's enemies, these circumstances will be taken as a valid excuse." 69. The Supreme Court also observed similarly in the case of Life Insurance Corporation of India vs. CIT that- "It is obvious that in the surplus or deficit in any inter-valuation period relating to the corporation which came to be formed only on the appointed day in 1956, this amount could not be reflected since it related to a period prior to the formation of the Corporation. The law does not contemplate or require the performance of an impossible act lex non cogit ad impossibilia. It is now to be seen whether the expression 'included therein' in r. 2(1)(b) is alone sufficient to negative the logical legal effect of s. 7 of the LIC Act." 70. Even if the amendment has been brought into with retrospective effect, the assessee cannot be treated as "assessee-in-default" retrospectively and interest under s. 201(1A) cannot be charged on a liability which came into existence by a retrospective amendment. The assessee has all along acted in a bona fide manner and in accordanc....
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....AC 109, may appropriately be referred to: "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of the state of affairs." 73. Sec. 17(2), Expln. 1 bids one to treat the difference in rent at specified rate and the rent actually charged as a concession in the matter of rent as real, which is or might be an imaginary state of affairs, one must survey, imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flown from or accompanied it, i.e., one has to assume that the difference was perquisite. The statute says that you must imagine a certain state of affairs (difference as being perquisite); it does not say t....