2025 (12) TMI 1694

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.... The same was revised on 31.03.2021 at total income of Rs. 26,47,550/-. Against the said return of income, the assessment was completed by the Assessment Unit of Income Tax Department (hereinafter called "the AO") vide order dated 29.08.2022 passed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 (the Act) at total income of Rs. 37,41,300/-. While doing so, the AO restricted the claim in respect of leave encashment u/s. 10(10AA) of the Act to Rs. 3,00,000/- as against the total claim of Rs. 13,93,746/- by holding that exemption u/s. 10(10AA) of the Act is restricted to Rs. 3,00,000/- as the appellant cannot be treated as employee of Central Government placing reliance on the decision of the Hon'ble Delhi High Court dated 08.11.2019. ....

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.... of other than Central and State Government employees. Therefore, the issue which requires to be adjudicated is whether the employees of assessee-society are employees of Central Government or not. Needless to say that once the employees of the society are treated as employees of the Central Government for the purpose of evaluating perquisites of rent free accommodation, rules prescribed under clause (i) of sub-rule (1) of rule 3 of Income Tax rules are to be adopted. Otherwise clause (ii) of sub-rule (1) of rule 3 of IT Rules is to be adopted. An identical issue had come before the co-ordinate bench of this Tribunal in the case of Central Food Technology Research Institute (supra) wherein this Tribunal took a view that the employees of the....

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....tion has a separate and independent existence and is a different entity from the Union or the State Government with its own property and its own fund and the employees of the corporation do not hold civil post under the Union or the State; (ii) makes little difference in this respect, whether the Union or the State holds the majority share of the Corporation and controls its administration by policy directives or otherwise; (iii) it also makes little difference if such a statutory corporation imitates or adopts the Fundamental Rules to govern the service conditions of its employees; (iv) although the ownership, control and management of the stator corporation may be, in fact, vested in the Union or State, yet in t....

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....rquisite. The Tribunal in the case of uSC v. DCIT dt.27.2.2015 (supra) has dealt with this issue in para 19 as under: "19. We have considered the rival submissions. In our view, the plea of the assessee that it made a bona fide estimate of employees salary by valuing the perquisites in the form of residential accommodation provided to the employees by valuing the same as if employees were employees of Central Govt. has to be accepted. In this regard it is clear from the records that the position with regard to the assessee not being a Central Govt. was brought to its notice by the department only in the proceedings initiated in 2013. Even thereafter the assessee has been taking a stand that its employees are employees of Central Go....