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2021 (7) TMI 110 - HC - Income TaxTDS on accommodation provided by the petitioner to its employees - computation of rent for the purpose of computing perquisites at the time of deducting of tax at source - petitioner is an educational institution constituted under the National Institutes of Technology, Science, Education and Research Act, 2007 and is engaged in imparting higher education in engineering, technology, management, science, arts etc. and also encourages research in such fields - petitioner receives 100% assistance from the central government and has been declared as an institution of national importance - HELD THAT:- The employee bears full license fees fixed by the employer government, there would be no question of any perquisite. Whereas in cases falling under sl.No.2 of the table, there are detailed provisions how such accommodation should be valued and any amount charged from the employee which falls short of such valuation, would be treated as perquisite on which tax would be deducted at source by the employer and deposited with the Income Tax Authority. The Income Tax Officer in the impugned order had observed that the petitioner NIT is not the state within the meaning of Article 12 of the Constitution, which does not appear to be quite correct - even if the NIT would be treated as state within the meaning of Article 12, it cannot escape the liability to deduct tax at source on the differential valuation of the rent as assessed under sub-rule(1) of Rule 3 and that collected from the employee concerned by way of license fee. Writ petitioner, however, submitted that under mistaken belief the petitioner had taken into account full value of the computation of rent for the purpose of computing perquisites at the time of deducting of tax at source, ignoring that component which the employee was anyway paying by way of license fees under the Rules. This is a factual aspect into which we cannot go into in the present writ petition. The respondents had not demanded any quantified amount so that we can direct the department to correct the error, if any. If the petitioner had made an error in computation, it is either by the petitioner to approach the authority for rectification if time is available or for the concerned employees to seek refund of excess deduction of taxes from the salaries.
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