9911796707
TMI Blog1993 (8) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioners are employees of the Indian Bank. The Indian Bank is a nationalised bank and is governed by the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. In exercise of the powers conferred by section 19 read with sub-section (2) of section 12 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the board of directors of the Indian Bank in consultation with the Reserve Bank of India and with the previous sanction of the Central Government made the Indian Bank (Officers) Service Regulations, 1979 (referred to as "the Regulations"). In terms of the Regulations, the standard rent in respect of accommodation owned by the bank and given to the employee for occupation has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a perquisite by the income-tax authorities. On June 19, 1992, the bank sought to add the value of the accommodation occupied by the petitioners as a perquisite under section 17 of the Act calculated under rule 3(a)(ii) of the Income-tax Rules, 1962 (referred to as "the rule"), to the total income of the petitioners. Deductions were accordingly sought to be made by the bank from the petitioners on such basis. Deductions were sought to be made not only for the current year but also for the financial year ending on March 31, 1992. Being aggrieved by the action on the part of the Indian Bank, the petitioners filed this writ application in April, 1993. An interim order was passed restraining the respondents from realising any amount on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been fixed in accordance with the Regulations and all employees similarly situated as the petitioners are making payment of rent in the same manner and to the same extent as the petitioners are doing. It cannot, therefore, be said that the petitioners are at all enjoying any concession within the meaning of section 17(2)(ii) of the Act. This view has also been taken by a Division Bench of the Madhya Pradesh High Court in the case of Officers' Association, Bhilai Steel Plant v. Union of India [1983] 139 ITR 937. Singh C. J. had to consider a fact situation which is substantially identical with the one before this court. His Lordship held that a case of concession in the matter of rent would arise when the rent normally payable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The rule cannot be permitted to be read in a manner beyond the powers conferred under the substantive provisions of the Act. Additionally, this argument was specifically negatived in the judgment of the Officers' Association, Bhilai Steel Plant v. Union of India [1983] 139 ITR 937 (MP). The reasoning given by the Division Bench of the Madhya Pradesh High Court is unexceptionable and I adopt the same with due respect. It would be illogical to determine the norm of the rent payable with reference to the paying capacity of the occupant. Whether the rate of rent is concessional or not, must be the accommodation related and not based on a variable factor such as a percentage of pay irrespective of the nature of the accommodation. I am embo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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