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TMI Blog2002 (6) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... on of new rule 3 with the old one. Substituted rule 3 reads thus: "3. Valuation of perquisites.--For the purpose of computing the income chargeable under the head 'Salaries', the value of perquisites provided by the employer directly or indirectly to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined in accordance with the following sub-rules, namely:- (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:... Provided that nothing contained in this sub-rule would be applicable to any accommodation located in a 'remote area' provided to an employee workin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by 10 per cent. per yer and annum of the cost of furniture (a) where the accommo- (i) 10 per cent of salary (including television sets, dation is owned by in cities having population radio sets, refrigerators, the employer, or exceeding lakhs as per other house hold appliances, 1991 census; air conditioning plant or equipment or other similar (ii) 7.5 per cent. of salary, appliances or gadgets) or if in other cites,in respect of such furniture is hired from a the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch lower rental that 10 per cent. or even 7.5 per cent. of the salary may be considered to be very much on the higher side. The other challenge to the impugned notification is that it made the amendment applicable retrospectively. We have heard learned counsel for the parties and have given our careful considerations to the rival contentions advanced at the Bar. The impugned amendment was brought about as a consequence of the Budget Speech by the Finance Minister in Parliament. In the Budget Speech the Finance Minister very pertinently observed that the Revenue had been facing some difficulties in the past with respect to the assessment and computation of the perquisites relating to the accommodation. Section 17 of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of litigation at various levels mainly on account of the fact that legislation with respect to rents being State subject differed from State to State. The value of fair rent cannot be determined as the standard rents differ from municipal area to municipal area also. It was accordingly decided to simplify and rationalise the procedure for determining the perquisite value and accordingly as per the impugned rules, the employees have been divided only in two categories. The respondents have also in the counter affidavit explained the rationale for the distinction between Government employees and the private employees. It has been explained that for purposes of the valuation of the perquisites relating to accommodation, the employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s because in our considered opinion, for rationalising and simplifying the procedure, the Board brought about the impugned notification otherwise on account of cumbersome procedure as per the old rule, various difficulties are being faced. In so far as the retrospective effect of the impugned notification is concerned, our attention was drawn to sub-section (4) of section 295 of the Act. Sub-section (4) reads thus: "(4) The power to make rules conferred by this section shall include the power to give retrospective effect, from a date not earlier than the date of commencement of this Act, to the rules or any of them and unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effect shall be give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically exempt under sections 10(13A), 10(5), 10(14), 17, etc., would continue to be exempt. These include benefits like travel on tour and transfer ; leave travel, daily allowance to meet tour expenses as prescribed, medical facilities subject to conditions. However, administrative circulars and instructions relating to perquisites falling under the purview of rule 3 issued before the adoption of the new rules, shall stand superseded or modified, as the case may be." The aforesaid clearly, therefore, takes care of the apprehension of the petitioners because the option has clearly been given to the assessee to compute the value of perquisites at his option for the period beginning April 1, 2001, and ending September 30, 2001, in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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