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TMI Blog2021 (7) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of Rule 3, the requirement is that the accommodation should be provided by the Central Government or State Government to the employees either holding office or post in connection with affairs of Union or of State or serving with any body or undertaking under the control of such government from deputation. The aforesaid expression is unambiguous and unclear and therefore, its meaning cannot be expanded to include any body, undertaking under the control of Central Government. Merely because assessee is a body or undertaking owned or controlled by the Central Government, it cannot be elevated to the status of Central Government. Thus, the assessee cannot claim that valuation of perquisites in respect of residential accommodation should be computed as in case of an accommodation provided by the Central Government. Therefore, Sl.No.1 of Table 1 of Rule 3 of the Rules does not apply to the assessee. The substantial questions of law No.1 and No.2 are answered against the assessee and in favour of the revenue. Obligation 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Appellant as a defaulter to apply the provisions of Section 201(1) and 201(1A) of the Act? (c) If the answer to Question No.2 above is in affirmative still can the appellant-institute be held to be a defaulter to apply the provisions of Section 201(1) and 201(1A) of the Act of bonafide reason or belief in interpretation of Sl.No.1 of Table-1 of Rule 3 of the IT Rules, 1962 rws 17(2) of the IT Act, 1961? 2. Facts leading to filing of this appeal briefly stated are that the assessee is one of Constituent Unit of Council of Scientific And Industrial Research (hereinafter referred to as 'the CSIR' for short). The CSIR is a premier Industrial Research And Development Organization, which was constituted by resolution of the erstwhile Central Legislative Assembly in the year 1942 and is an Autonomous body registered under the Societies Registration Act, 1860 (hereinafter referred to as 'the 1860 Act' for short). The employees of the assessee are governed by the Government of India pay and allowance rules, conduct rules and other rules as is applicable to the Central Government employees. A provision for reservation for post in services in the assessee&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Government employees. It is further submitted that the employees of the assessee are at par with the Central Government employees and are entitled to valuation of perquisites as provided under Sl.No.1 of Table of Rule 3. It is further submitted that the assessee had rightly valued the perquisites on account of rent free accommodation or concessional rent accommodation to its employees and there was no shortfall in payment of tax as required under Section 192 of the Act. It is submitted that the assessee could not have been treated as assessee in default and therefore, provisions of Section 201(1) and 201(1A) of the Act could not have been invoked. Alternatively, it is submitted that the assessee could not have been treated as assessee in default on account of bonafide reason or belief in interpretation of Sl.No.1 of Table 1 of Rule 3 of the Rules read along with Section 17(2) of the Act. In support of aforesaid submissions, reliance has been placed on decisions Supreme Court in 'PRADEEP KUMAR BISWAS VS. INDIAN INSTITUTE OF CHEMICAL BIOLOGY', (2002) 5 SCC 111, 'R.D. SHETTY VS. INTERNATIONAL AIRPORT AUTHORITY', AIR 1979 SC 1628, 'P.V. RAJAGOPAL VS. UNION OF IN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 3(1) of the Rules. Before proceeding further, it is apposite to take note of relevant extract of Section 17(2) Explanation 1, Rule 3(1) read with relevant extract of Table 1 appended to it, which read as under: 17(2) Perquisite includes - (i) the value of rent-free accommodation provided to the assessee by his 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where accommodation is unfurnished Where accommodation is furnished 1. Where the accommodation is provided by the Central Government or any State Government to the employees either holding office or post in connection with the affairs of the Union or of such State or serving with any body or undertaking under the control of such Government 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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