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TMI Blog2002 (6) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... is batch of petitions only with respect to the substitution of new rule 3 with the old one. Substituted rule 3 reads thus: "3. Valuation of perquisites.--For the purpose of computing the income chargeable under the head 'Salaries', the value of perquisites provided by the employer directly or indirectly to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined in accordance with the following sub-rules, namely:- (1) The value of residential accommodation provided by the employer during the previous year shall be determined on the basis provided in the Table below:... Provided that nothing contained in this sub-rule would be applicable to any accommodation loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niture (a) where the accommo- (i) 10 per cent of salary (including television sets, dation is owned by in cities having population radio sets, refrigerators, the employer, or exceeding lakhs as per other house hold appliances, 1991 census; air conditioning plant or equipment or other similar (ii) 7.5 per cent. of salary, appliances or gadgets) or if in other cites,in respect of such furniture is hired from a the period during which the third party, by the actual hire said accomodation was charges payable for the same as occupied by the employee reduced by any charges paid or during the previous year as payable for the same by the reduced by the rent, if employee during the previous any, actually paid by the year." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e past with respect to the assessment and computation of the perquisites relating to the accommodation. Section 17 of the Income-tax Act, 1961, in relation to "salary", in sub-section (2) stipulates that "perquisite" includes the value of rent-free accommodation provided to the assessee by his employer or the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer. Section 295 of the Act gives powers to the Board to make rules and subsection (2) thereof undoubtedly empowers the Board to make rules for the determination of the value of any perquisite chargeable to tax under the Act in such manner and on such basis as appears to the Board to be proper and reasonable. In the counte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate employees. It has been explained that for purposes of the valuation of the perquisites relating to accommodation, the employees have been classified under the impugned amended rule into only two categories, namely, Government (Central and State) employees and others. To maintain continuity and equity with their remuneration and a variety of other benefits available in other sectors, the earlier system of valuation of perquisites relating to accommodation on the basis of rent payable as per rules framed by the Government has been retained for Central and State Government employees. For others, that is, employees belonging to private as well as public sector undertakings, it has been decided that the valuation of the perquisite relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them and unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees." Undoubtedly, sub-section (4) of section 295 does give the power to the Board to apply the rules with retrospective effect, but it also at the same time clearly requires that no retrospective effect shall be given to any rule if it tends to prejudicially affect the interests of the assessee. Mr. Jhunjhunwalla, learned counsel appearing for the Revenue, invited our attention to Circular No. 15 dated December 12, 2001, issued by the Board. The relevant part of the circular reads thus: "While this rule shall come into force with effect from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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