TaxTMI 
TaxTMI 
2021 (7) TMI 1052
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.... the Government employees for the purpose of computing value of perquisites under Section 17(2) of the Act would be applicable in the case of the appellant?" (c) Whether the Tribunal erred in not appreciating that the Assessing Officer was obligated to establish that the Appellant has provided any concession to the Employees in respect of the accommodation before applying Rule 3 of the Income Tax Rules 1962?" (d) Whether the appellant can be treated as an assessee in default without the Assessing Officer establishing that the appellant has extended any concession in the form of accommodation to its employees? (e) Whether Rule 3 of the Income Tax Rules, 1962 will only apply once a liability is created under the charging provision Section 17(2)(ii) of the Income Tax Act, 1961? 2. Facts leading to filing of this appeal briefly stated are that the assessee is a premier research institution engaged in imparting higher learning and carrying out advanced research in science and technology. The assessee is recognized as a 'Deemed University' under the provisions of University Grants Commission Act, 1956 (hereinafter referred to as 'the UGC Act'....
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....f providing accommodation to its employees. It is also submitted that similar benefit was given to the employees of the Indian Institute of Management and the decision of the tribunal was accepted by the revenue. It is further submitted that that assessee cannot be treated to be assessee in default in the absence of any finding that assessee had extended any concession in the form of accommodation to its employees. It is further submitted that Rule 3 of the Rules applies only once a liability is created under Section 17(2)(ii) of the Act. In support of aforesaid submissions, reliance has been placed on decisions in 'R.D.SHETTY VS. INTERNATIONAL AIRPORT AUTHOIRTY OF INDIA AND OTHERS', AIR 1979 SC 1628, 'AJAY HASIYA VS. KHALID MUJEEB SEHRAVARDI', AIR 1981 SC 487, 'PRADEEP KUMAR VS. INDIAN INSTITUTE OF CHEMICAL BIOLOGY', (2002) 7 SCC 111, 'ARUN KUMAR VS. UNION OF INDIA', (2006) 286 ITR 89 (SC), 'STAR TELEVISION NEWS LTD. VS. UNION OF INDIA', (2009) 184 TAXMAN 400 (BOM.). 5. On the other hand, learned counsel for the revenue submits that Sl.No.1 of Table 1 appended to Rule 3(1) of the Rules apply when the accommodation is provided by the Centr....
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....employer; (ii) the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer. Explanation 1:- For the purposes 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 an employee 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 the specified rate 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 fifteen 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 by, the assessee. (b) in a case where a furnished accommodation is....
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.... on deputation. License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employees The value of perquisite as determined under column 93) and increased by 10% 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 third party, the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year. 8. Thus, it is evident that the value of residential accommodation provided by the Central Government or any State Government to the employees either holding office or post in connection with affairs of the Union or of such State or serving with any body or Undertaking under the control of such Government on such deputation has to be determined in the manner provided in Column Nos.3 and 4 of Sl.No.1 of Table 1 of Rule 3 of the Rules. The assessee, which is a Trust under the 1890 Act, is controlled and financed by the Central Government.....