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TMI Blog2024 (1) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... wahati Bench order in case of IIT, (supra), as in that case the Tribunal had not directly dealt with the issue if IIT, falls in status of Central Government for the purpose of Rule 3 but had given benefit to that assessee for not being considered assessee in default u/s 201(1) of the Act, as there was a bonafide explanation with the department. The Delhi Bench in the case of Superintendent (DDO) versus ITO [ 2012 (8) TMI 644 - ITAT, DELHI ] has taken into consideration judgement of Hon ble Supreme Court of India in the case of Arun Kumar [ 2006 (9) TMI 115 - SUPREME COURT ] and held that without first establishing that assessee employer had provided accommodation to the employees at concessional rates, the assessing officer cannot straightaway invoke Rule 3 for computing value of the perquisite and treat assessee in default in deducting tax at source on said value. Therefore, we are of the considered view that though Ld. CIT(A) has fallen in error in holding that assessee falls in status of Central Government for the purpose of Section 17(2) of the Act, the impugned order of Ld. CIT(A) still deserves to be upheld as Ld. AO has fallen in error by straightaway invoking Rule 3 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be computed in accordance Section 17(2)(ii) of the Act. 2.4. Aggrieved by the aforesaid order, the assessee had filed an appeal and the Ld. CIT(A) placing reliance on the Tribunal s Guwahati Bench order in the case of Indian Institute of Technology, Guwahati v. ITO (TDS), bearing ITA No. 101 (Gau) of 2006 held that there was no perquisite value of rent-free accommodation provided to employees and deleted the demand. 2.5 Aggrieved by the order of the Ld. CIT(A), Department has filed an appeal before this Tribunal raising following grounds:- 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that there is no perquisite value of the rent-free accommodation provided to the employee. 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) had erred in not appreciating that IIT Delhi has a PAN allotted of its own and is assessed to tax in that capacity and not a government authority, it is a Govt. funded organisation hence not exempted from addition of perquisite valuation of RFA (rent Free Accommodation) in their employee s income. As such the IIT Delhi is an autonomous body and therefore it has to add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to control by the Central Government. The unfurnished accommodation is provided to the employees upon payment of prescribed licensee fee, subject to conditions laid down by the Respondent's Board and the employee is required to reside in this accommodation. 4.1 In light of aforesaid Ld. AR submitted that the CIT(A) has rightly extended the benefit available to government employees to the employees of the Respondent too, since there is no material difference in terms of their employment, for the purpose of Section 17(2) of the IT Act 4.2 ld. AR also relied the order in case of Indian Institute of Technology, Guwahati, ITA No. 101 (Gau) of 2006 wherein the Guwahati ITAT decided in favour of the Respondent (i.e., an IIT) in identical facts, deleted demand made under section 201(1) of Income-tax Act, 1961. The demand was also deleted by ITAT Bangalore in the case of M/s. Employees Provident Fund Organisation v. DCIT (TDS), ITA No. 442 to 444/Bang/2023 on same lines. 5. Ld. AR further submitted that in the present case, the assessee charges license fee' from the employees to whom the residential flats are allotted at the rate notified by the Central Government. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Government. The assessee may be an instrumentality of the State of for the purpose of Article 12 of the Constitution of India. However, for the purposes 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 16 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. 8. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to decide the said question and record a finding as to whether there is 'concession' and the case is covered by Section 17 (2) (ii) of the Act. Only thereafter the authority may proceed to calculate the liability of the assessee under the Rules. In our considered opinion, therefore, in spite of the legal position that Rule 3 is intra vires, valid and is not inconsistent with the provisions of the parent Act under Section 17 (2) (ii) of the Act, it is still open to the assessee to contend that there is no 'concession' in the matter of accommodation provided by the employer to the employee and hence the case did not fall within the mischief of Section 17 (2) (ii) of the Act. Para 86 We are, however, not inclined to enter into larger question as in our view, it is not necessary in the light of statutory provision relating to 'concession' in the matter of rent respecting any accommodation' in Section 17(2)(ii) of the Act. We are of the view that Rule 3 would apply only to those cases where 'concession' has been shown by an employer in favour of an employee in the matter of rent respecting accommodation. Thus, whereas 'charging provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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