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2021 (7) TMI 1053 - HC - Income TaxComputing value of perquisites u/s 17(2) - assessee is a Trust constituted under Charitable Endowment Act, 1890 - value of residential accommodation provided by the Central Government or any State Government to the employees either holding office or post in connection with affairs of the Union or of such State or serving with any body or Undertaking under the control of such Government on such deputation - whether the assessee, which is a Trust registered under the Charitable Endowment Act, 1890 can be treated as Central Government as provided in Sl.No.1 of Table 1 appended to Rule 3(1) of the Rules? - HELD THAT:- The assessee, which is a Trust under the 1890 Act, is controlled and financed by the Central Government. The assessee is a Body or an undertaking controlled by the Central Government. governed by the Rules governing the service conditions of the employees of the Central Government. The assessee may be an instrumentality of the State of for the purpose of Article 12 of the Constitution of India. 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 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 - Explanation 1 has been incorporated in Section 17(2) of the Act by Finance Act, 2007 with effect from 01.04.2002. Thus, in view of Explanation 1 to Section 17(2) of the Act, which provides that concession in the matter of rent shall be deemed to have been provided, the substantial question of law No.3 does not arise for consideration in this appeal. The liability is created under Section 17(2)(ii) of the Act by a deeming provision. Therefore, the provisions of Rule 3 of the Rules shall apply to the case of the assessee.
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