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2012 (8) TMI 644 - AT - Income TaxNon deduction of TDS on the value of perquisite of the rent free accommodation - accommodation provided to its employees for which it charges license fees - Held that:- Section 17 defines salary to include "perquisite" to include the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer & Rule 3 provide for valuation of perquisites - The rules prior to 2001 were based on fair rental value of the accommodation and, therefore, AO was required to determine the fair market value of accommodation before arriving at a conclusion that the employer has given any perquisite to the employees. The submission of assessee is well founded and deserves to be accepted that "concession" under clause (ii) of subsection (2) of section 17 is a 'jurisdictional fact'. It is only when there is a 'concession' in the matter of rent respecting any accommodation provided by an employer to his employee that the mode, method or manner as to how such concession can be computed arises - If the assessee contends that there is no 'concession', the authority has 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). Only thereafter the authority may proceed to calculate the liability of the assessee under the Rules, 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), 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 As AO has nowhere held in the impugned order that any concession was given by the employer to its employees and they have provided the accommodation on a concessional rates and AO straightway applied Rule 3 without first establishing the case that the appellants have provided any concession in the shape of accommodation to its employees - no default under sec. 201(1) and 201(1A)- in favour of assessee.
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