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TMI Blog2023 (8) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... yees under the Central Government. Under these sections, the officers are authorised to issue recovery certificate in respect of the arrears of PF dues payable. The officers under these provisions are also vested with various rights to ensure recovery of dues including attachment and sale of movable or immovable property, arrest of employer and detention in prison or appointing a receiver to manage such movable or immovable property so attached. In our considered opinion, the above powers cannot be equated with the powers that are exercised by the employees of an organisation that are governed by the byelaws under the Societies Registration Act. At this juncture, it may not be out of place to refer to the decision of Hon ble Supreme Court in case of CHECKMATE SERVICES PVT LTD [ 2022 (10) TMI 617 - SUPREME COURT] as observed that the contributions that needs to be deposited by an employer of an establishment are statutory payments. Further we note that section 1(3)(b) of the Act empowers the Central Government to apply the Act to all trading / commercial establishments whether such establishments are factories or not. We do not agree with the view taken by the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be qualified as perquisites U/s 17(2) of IT Act. 3. The Central Board of Trustees, EPFO is governed, controlled and administered by Central Government. Union Minister of Labour and Employment is the Chairman of the Organisation and the Secretary of Ministry of Labour and Employment is the Secretary of the Organisation. 4. EPFO is the extension of the executive power of the Union of India for implementing the mandate envisaged under Article 41 of the Constitution and is brought into existence under the EPF MP, Act 1952. Therefore, as per Articles 258(1) of Constitution read with 8(b)(1) of the General Clauses Act, 1897, Central Board of Trustees, EPFO is the executive organ of the Central Government. 5. Section 18 - A, 20 and 20 of EPF and MP Act, 1952 makes it a mandate to the Central Board of Trustees to comply with any directions given by the Central Government as it may think fit for the efficient administration of the Act. 6. Section 21 of the EPF and MP Act, 1952, the Central Government has powers to make rules to carry out the provisions of the EPF and MP Act, 1952. 7. Section 18A of the Act which reads as Authorities and Inspector to be Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of Central Board of Trustees, EPFO stands to be in the category of Central Government Employee. 14. The Learned CIT (A) has not considered the essence of the following decisions of the Hon'ble Apex Court: Rajasthan State Electricity Board Vs. Mohan Lal ((1967) 3 SCR 377), Sukhdev Singh Ors Vs. Bhagath Ram Singh Raghuvanshi Anr (1975) 1 SCC 421) Union of India Vs. R.C. Jain Ors. (1981) 2 SCC 308) 15. The Learned CIT (A) has erred in completely accepting the findings of the AO enumerated in his Order passed under Section 201(1) and 201(1A) of the Income Tax Act, without paying proper attention to the reply statement made by the Appellant EPFO and thus has erroneously held that: though the ownership control and management of State Corporation is vested in the Union or State, yet in the eye of law, the Corporation is its own master and is a separate entity as its employees do not hold any civil posts under the Union or State. the funds of the Appellant EPFO, are not deposited into the consolidated fund of India and the salaries of its employees are not drawn out of consolidated funds of India and hence, it cannot be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistered by the Central Government under the leadership of Union Minister of Labour Employment who is the chairman of the organisation and Secretary of Ministry of Labour Employment. It is thus submitted by the assessee that as per Article 258(1) of the Constitution of India r.w.s 8b(1) of the General Clauses Act, 1897, the assessee is to be construed as an executive limb of the Central Government. 3.2 The Ld.AO observed that assessee has provided its employees with unfurnished accommodation, and was of the view that assessee was required to deduct TDS on the perquisite value in respect of such accommodation provided to its employees. Accordingly the Ld.AO issued notices calling upon the assessee to explain the reason as to why the TDS was not deducted. In response to notice, the assessee responded vide letter dated 12.01.2018 as under: Employees' Provident Fund Organisation came into being following enactment of Employees Provident Fund Act 195. The Funds established under the Act are vested in and administered by Central Board of Trustees is a tripartite body consisting of representatives from Central and State Governments, the Employers and Employees. Hon. Minist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut. for deduction of TDS on value of perquisites of rent free accommodation. 3.3 The Ld.AO after considering the submissions of the assessee treated the assessee as assessee in default for non-deduction of TDS on perquisite value of unfurnished accommodation provided to its employees, and computed the default along with interest u/s. 201/1(A) of the act, for all the years under consideration. 3.4 The Ld.AO also relied on the decision of Coordinate Bench of this Tribunal in case of M/s. Central Food Technological Research Institute vs. ITO (TDS) in ITA Nos. 1607 to 1611/Bang/2013 for A.Ys. 2007-08 to 2011-12 by order dated 04.07.2014 to support the view. 3.5 Aggrieved by the orders of the Ld.AO, assessee preferred appeals for all the concerned assessment years before the Ld.CIT(A). The Ld.CIT(A) observed and held as under: Aggrieved by the orders of Ld.CIT(A), assessee is in appeal before this Tribunal. 4. The Ld.AR submitted that the decision relied by the authorities below in case of Central Food Technological Research Institute vs. ITO (supra) is distinguishable on facts as it is a Scientific and Industrial Research, registered under the provisions of Soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent; (aa) the Central Provident Fund Commissioner, ex officio;] (b) not more than five persons appointed by the Central Government from amongst its officials; (c) not more than fifteen persons representing Governments of such States as the Central Government may specify in this behalf, appointed by the Central Government; (d) ten persons representing employers of the establishments to which the Scheme applies, appointed by the Central Government after consultation with such organisations of employers as may be recognised by the Central Government in this behalf; and (e) ten persons representing employees in the establishments to which the Scheme applies, appointed by the Central Government after consultation with such organisations of employees as may be recognised by the Central Government in this behalf [ 5AA. Executive Committee. (1) The Central Government may, by notification in the Official Gazette, constitute, with effect from such date as may be specified therein, an Executive Committee to assist the Central Board in the performance of its functions. 5D. Appointment of officers. (1) The Central Government shall appoint a Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t whose decision thereon shall be final.] (8) The method of recruitment, salary and allowances, discipline and other conditions of service of officers and employees of a State Board shall be such as may be specified by that Board, with the approval of the State Government concerned. 6D. Laying of schemes before Parliament. Every scheme framed under section 5, section 6A and section 6C shall be laid, as soon as may be after it is framed, before each House of Parliament, while it is in session....... 7. Modification of scheme. (1) The Central Government may, by notification in the Official Gazette, add to 3 [amend or vary, either prospectively or retrospectively, the Scheme, the 4 [Family Pension] Scheme or the Insurance Scheme, as the case may be..... (2) Every notification issued under sub-section (1) shall be laid, as soon as may be after it is issued, before each House of Parliament............... 7D. Tribunal. The Industrial Tribunal constituted by the Central Government under sub-section (1) of section 7A of the Industrial Disputes Act, 1947 shall, on and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017, be the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .AR vehemently submitted that, the assessee is categorised as a state within the meaning of Article 12, as the employees of the assessee are selected by the State and in such manner that the State can create or abolish the posts or /and regulate the conditions subject to which the post is or will be held by such employees of the assessee. It is thus submitted by the Ld.AR that assessee cannot exist independently without the state. 4.4 She submitted that assessee has been formed also to perform through its employees, the sovereign functions like attachment and sale, arrest and detention and cannot be equated with the employees of the decision relied by the revenue authorities in case of Central Food Technological Research Institute vs. ITO (supra). 4.5 The Ld.AR thus submitted that, the issue of TDS in any event does not arise in the present facts of assessee, as a house rent allowance is collected from its employees to whom unfurnished accommodation is provided. She submitted that assessee does not fall within the mischievous of section 17(2)(ii) as the accommodation given to the employees of the assessee are not on concessional basis. 4.6 On this background, the Ld.AR sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perquisite as determined under column (3) 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 other similar appliances or gadgets) or if such furniture is hired from a third party, by 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. (ii) 10% of salary in cities having population exceeding 10 lakhs but not exceeding 25 lakhs as per 2001 census; (iii) 7.5% of salary in other areas, in respect of the period during which the said accommodation was occupied by the employee during the previous year as reduced by the rent, if any, actually paid by the employee (b) where the accommodation is taken on lease or rent by the employer. Actual amount of lease rental paid or payable by the employer or 15% of salary whichever is lower as reduced by the rent, if any, actually paid by the employee. The value of perquisite as determined under column (3) and increased by 10% per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) the employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation; and (ii) the value of perquisite of such an accommodation shall be the amount calculated in accordance with Sl. No. (2)(a) of Table I, as if the accommodation is owned by the employer. 6.2 It is the contention of the Ld.AR that assessee falls under S.No. 1 of table 1 of the Rule 3 and therefore no TDS has to be deducted by the assessee on the perquisite value of the unfurnished accommodation provided by assessee to its employees. It is also submitted by the assessee that it is not working as an autonomous body / undertaking under the control of State / Central government / Semi-government organisation and therefore the Circular No. 113/2002 dated 23.12.2002 is not applicable to assessee. 6.3 We have also perused the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 , which is notified by the central government in the official gazette as per section 5A of the Act. Further as per section 5AA, the Central Government by way of notification i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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