Income Tax Appellate Tribunal - Chandigarh
Supdtt. Engineer,, Chandigarh vs Department Of Income Tax on 27 June, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'A', CHANDIGARH
BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER
AND Ms. SUSHMA CHOWLA, JUDICIAL MEMBER
ITA Nos.1192 to 1194/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Supdt.Engineer, Bhakra
Chandigarh. Power House, Nangal.
ITA Nos.1195 to 1197/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Executive Engineer, Bhakra
Chandigarh. Electrical Division,
BBMB, Nangal.
ITA Nos.1198 to 1200/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Addl.Supdt.Engineer, Proc.
Chandigarh. C/Stores & Disposal Division,
BBMB, Nangal.
ITA Nos.1201 to 1203/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Sr.Law Officer,
Chandigarh. Personnel Officer,
BBMB, Nangal.
ITA Nos.1204 to 1206/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Director, Water Regulation,
Chandigarh. BBMB, Nangal.
ITA Nos.1207 to 1209/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Executive Engineer,
Chandigarh. Bhakhra Mechanical Division,
BBMB, Nangal.
2
ITA Nos.1210 to 1212/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Executive Engineer,
Chandigarh. RM & Sr.Division,
BBMB, Nangal.
ITA Nos.1213 to 1215/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Executive Engineer,
Chandigarh. Store Transport & Disposal,
BBMB, Nangal.
ITA Nos.1216 to 1218/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Supdtt. Engineer,
Chandigarh. Mechanical Circle
BBMB, Nangal.
ITA Nos.1235 to 1237/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Executive Engineer,
Chandigarh. Hydrology Division,
BBMB, Nangal.
ITA Nos.1238 to 1240/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Supdtt. Engineer,
Chandigarh. Canal P.HS. Circle,
BBMB, Nangal.
ITA Nos.1241 to 1243/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Asstt.Design Engineer,
Chandigarh. O/o Chief Engineer,
BBMB, Nangal Township,
Ropar.
3
ITA Nos.1244 to 1246/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Executive Engineer,
Chandigarh. Nangal Dam Division,
BBMB, Nangal.
ITA Nos.1247 to 1249/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Supdtt. Engineer,
Chandigarh. Bhakra Dam Circle,
BBMB, Nangal.
ITA Nos.1250 to 1252/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Executive Engineer,
Chandigarh. BC & Township Division,
BBMB, Nangal.
ITA Nos.1253 to 1255/Chd/2009
(Assessment Years: 2006-07 to 2008-09)
The Income Tax Officer(TDS-I), Vs. The Director, Design B&B,
Chandigarh. Design Directorate,
BBMB, Nangal.
(Applicant) (Respondent)
Applicant By : Shri Akhilesh Gupta
Respondent By : Shri Harish Nayyar
Date of hearing : 27.06.2013
Date of Pronouncement : 23.07.2013
O R D E R
PER SUSHMA CHOWLA, JM:
These bunch of appeals filed by the assessee are against the consolidated order of the Commissioner of Income Tax (Appeals), Chandigarh dated 26.10.2009 relating to assessment years 2006-07 to 4 2008-09 against the order passed u/s 201(1) & 201(1A)) of Income Tax Act, 1961 (in short 'the Act').
2. The only common ground of appeal raised in all the appeals reads as under:
"1. The CIT (Appeals) has erred in holding the BBMB as a Govt. body and in holding the per2quisite value of the residential accommodation provided to its employees under section 17(2) read with rule 3(1)(i)."
3. T h e p r e s e n t b u n c h o f a p p e a l s r e l a t i n g t o t h e e m p l o ye e s o f B h a k r a Beas Management Board (herein after referred to as BBMB) were heard together and are being disposed off by this consolidated order for the sake of convenience.
4. All the appeals are filed by Revenue against different assessees and had raised identical ground of appeal and we proceed to dispose off the present bunch of appeals by referring to the facts in ITA No.1192/Chd/2009.
5. The issue raised in the present appeal is in relation to the computation of perquisite value of residential accommodation provided t o i t s e m p l o ye e s b y B B M B a n d n o n d e d u c t i o n o f t a x a t s o u r c e o u t o f such perquisite value and consequent demand raised under section 201(1) and interest charged under section 201(1A) of the Act.
6. The brief facts of the case are that BBMB had allotted residential a c c o m m o d a t i o n t o i t s e m p l o ye e s , w h o i n t u r n w e r e e m p l o ye e s o f t h e respective States of India. The Assessing Officer received communication from CBDT to conduct enquiry in the case of BBMB. The Assessing Officer show caused the assessee/Person Responsible to deduct tax (i.e. in short PRs) to explain as to why the value of perquisite o n a c c o u n t o f r e n t f r e e a c c o m m o d a t i o n p r o v i d e d t o i t s e m p l o ye e s , a s p e r 5 Rule 3 of Income Tax Rules, were not taken into account while c a l c u l a t i n g t h e t a x a b l e i n c o m e o f B B M B e m p l o ye e s . As per the Assessing Officer, the perquisite value was required to be calculated @ 7.5% of the total salary income as per Rule 3 of Income Tax Rules. The repl y of the assessee is incorporated at pages 2 to 5 of the order passed under section 201(1) r.w.s. 201(1A) of the Act. The plea of the assessee before the Assessing Officer was that BBMB was statutory body consisting of nine members as specified in section 79(2) of Punjab Reorganization Act, formulated to administer, maintain and operate the work on Bhakra project. The BBMB was claimed to be a joint department of the partner States and all the costs were met by the said partner States, in the pre-fixed proportions. It was further explained that BBMB was recovering licence fees from the employees as per CSR Rules of Punjab Government till 1.11.2005 and thereafter amount equal t o l i c e n c e f e e w a s t r e a t e d a s p e r k i n t h e h a n d s o f t h e e m p l o ye e s o f BBMB and TDS on account of the value of perk for rent free a c c o m m o d a t i o n p r o v i d e d t o i t s e m p l o ye e s w a s d e d u c t e d o u t o f s a l a r y account of the e m p l o ye e s . It was further pleaded that the a c c o m m o d a t i o n p r o v i d e d t o t h e e m p l o ye e s o f B B M B w a s o w n e d b y t h e State Governments i.e. the partner States and was deemed to be on lease with BBMB. The assessee thus claimed that BBMB should be treated as State Government, being governing body of Bhakhra Project acting on behalf of more than one State as per Gazette Notification dated 01.10.1967 on reorganization of Punjab for day to day administration, maintenance and operation of Bhakhra Project. In this case the taxable perk can be equivalent to license fee determined by the Punjab Government and the same is taken care by the BBMB while deducting TDS from the salary of its employees. Further the assessee has made the following submissions before the Assessing Officer: 6
"We may like to submit again that if the employees of BBMB are to be treated as Government Employees, then perk equivalent to license fee as per CSR Rules of Punjab Government is already treated as taxable perk in the hands of its employees. Otherwise, if at all, these employees are to be treated as Non-Government employees, then also perk equivalent to cost of employer for the rent free accommodation provided to employees of BBMB is treated as taxable perk in hands of its employees. In both the circumstances the BBMB has correctly deducted TDS from the salary of its employees and there is no default on the part of any DDO of the BBMB in TDS deduction from the salary of its employees."
7. The Assessing Officer dismissed the plea of the assessee that BBMB though a statutory body was to be treated as joint department of more than one State. Since BBMB was a statutory body created by Gazette Notification of Ministry of Irrigation & Power dated 1.10.2007 b y Government of India, the Assessing Officer held BBMB to be clear creation by law as statutory body assigned to carry out the functions as per the notification. The functions to be carried out by BBMB are enlisted under para 6 at page 5 of the assessment order. The Assessing Officer thus held that It is held that BBMB is an independent statutory body and falls in the category of other than Govt. for the purpose of valuation of perquisite on account of rent free/concessional accommodation U/s 17(2) of I.T. Act 1962 read with rule 3 of I.T.Rules 1962.
8. The next plea of the assessee that the ownership of the property of BBMB remained in the hands of the partner States in the pre-fixed ratio was also rejected by the Assessing Officer as BBMB was held to be an entity independent of the partner States as it was governed by statutory set of rules. In view thereof, it was held that BBMB, an independent s t a t u t o r y b o d y, a s d o e s n o t f a l l i n t h e c a t e g o r y o f G o v e r n m e n t f o r determination of perquisite value of rent free/concessional accommodation under section 17(2) of the Act and as per Rule 3 of 7 Income Tax Rules and properties being owned by the BBMB, there was no merit in the stand of the assessee. The alternate plea of the assessee t h a t t h e a c c o m m o d a t i o n p r o v i d e d t o t h e e m p l o ye e s o f B B M B w e r e o w n e d by the State Governments was rejected by the Assessing Officer vide para 11 holding that the BBMB was the actual owner of the properties and hence the alternate arguments made by the learned counsel for the assessee were not acceptable in view of the findings given in para 9 of the assessment order that BBMB was the owner of the properties and there was no question of taking on lease the said properties by BBMB. The Assessing Officer thus held as under:
"The perusal of the Rule 3 shows that the value of perquisite on account of rent free/concessional accommodation is to be calculated as per Rule 3(1)(2)(iii) in case of Other Employer being owner of the property @ 7.5% of salary as defined and in case of taken on lease @ of 15% of salary as defined or amount of lease rental paid or payable by employer which ever is less."
9. The Assessing Officer concluded by holding that since BBMB was a n e m p l o ye r o t h e r t h a n t h e G o v e r n m e n t , t h e p e r q u i s i t e v a l u e o n a c c o u n t of rent free/concessional accommodation was chargeable to tax in case o f a l l t h e c a t e g o r i e s o f e m p l o ye e s i . e . B B M B c a t e g o r y e m p l o ye e s , e m p l o ye e s on deputation from Punjab, H a r ya n a , Himachal Pradesh Government., etc. or on deputation from various departments, as per section 17(2) of the Act r.w.r.3(1)(2) of Income Tax Rules. As the assessee had failed to deduct tax at source, the assessee was held to be defaulter in respect of tax not so deducted or paid under section 201(1) of the Act and further interest was held to be leviable in the said default under section 201(1A) of the Act. In the case of Supdtt. Engineer, Bhakra Power House, BBMB, Nangal i.e. ITA No.1192/Chd/2009, demand under section 201(1) of the Act was raised at Rs.55,432/- and 8 interest was charged under section 201(1A) of the Act at Rs.18,293/-, resulting in total demand of Rs.73,724/-.
10. In appeal, the proceedings were attended to b y senior official/s of BBMB, who in turn explained that the facts were not presented in the right perspective before the Assessing Officer as the counsel appearing before the Assessing Officer did not understand the issue. However, the case position was elaboratel y explained before the CIT (Appeals) b y way of written submissions dated 22.10.2009 accompanied by various gazette notifications, circulars, letters, judicial pronouncements and relevant extract from Punjab Reorganization Act, 1966. The CIT (Appeals) held that the observations of the Assessing Officer that BBMB was not a g o v e r n m e n t o r g a n i z a t i o n b u t a s t a t u t o r y b o d y, f a l l i n g i n t h e c a t e g o r y o f " o t h e r t h a n G o v e r n m e n t o r g a n i z a t i o n " w a s n o t b a s e d o n l e g a l a n a l ys i s o f the facts of the case. The CIT (Appeals) addressed various issues relating to aspect of the issue raised in the appeal and following questions were formulated :
(1) Who constituted the BBMB ?
(2) Whether there is any private partnership/funds raised from
public ?
(3) What is the constitution of BBMB ?
(4) What is the source of funds/grants/assets of BBMB ?
(5) Who is auditing the accounts of BBMB ?
(6) Who is exercising control over the affairs of BBMB ?
(7) Who is the owner of the residential property provided to the
e m p l o ye e s o f t h e B B M B ?
(8) W h a t i s t h e s t a t u s o f e m p l o ye e s w o r k i n g i n B B M B ?
11. The CIT (Appeals) vide para 12 held as under:
"12. I n m y c o n s i d e r e d o p i n i o n , t h e a n s w e r t o t h e a l l t h e above questions extracted from Punjab Reorganization 9 Act, various Gazette Notifications, circulars and letters and submissions of the appellant categorically throw light in the direction that BBMB, for all intents and purposes, is a Government organization. BBMB for all practical purposes is under the overall supervision and control of the Central Government through its representatives. The source of funds is from the partner States i.e. Punjab, Haryana and Rajasthan and its accounts are audited by the Comptroller & Auditor General of India."
12. The case of the Assessing Officer that BBMB falls in the category of 'other organization' was held to be not correct perspective of the facts of the case. The CIT (Appeals) held that the case of the BBMB falls in the category of Sr.No.1 of Table-I under Rule 3 of Income Tax Rules. I t w a s f u r t h e r h e l d b y t h e C I T ( A p p e a l s ) t h a t The ownership of the accommodation provided to the employees of the BBMB lies with the partner States and the administration and maintenance of these properties is the responsibility of the Bhakra Beas Management Board. The employees transferred from partner State Governments/ Electricity Boards or recruited by Board in accordance with the Regulations notified by the Central Government in the official gazette dated 8.10.1994 draw their salary from the Personal Ledger Account maintained in the Public Account of Government of India. The licence fee on the rent free accommodation is in accordance with Rule 5,23 of the Punjab Civil Services Rules which has been added as perquisite in the salary of the employees and TDS has been deducted accordingly.
13. The CIT (Appeals) thus held that BBMB was a government organization and the licence fee determined under the Punjab Civil Service Rule shall only be taken as taxable perquisite under Rule 3(1) of the Income Tax Rules.
14. The Revenue is in appeal against the order of the CIT (Appeals). The learned D.R. for the Revenue pointed out that the assessee was a b o d y o r u n d e r t a k i n g w h e r e i n a d m i t t e d l y a l l t h e e m p l o ye e s w e r e o n deputation from the State Governments. The learned D.R. for the Revenue pointed out that BBMB had provided the accommodation to 10 t h e e m p l o ye e s a n d n o t t h e S t a t e G o v e r n m e n t . R e f e r e n c e w a s m a d e t o t h e observations of the Assessing Officer in paras 6 and 8 of the assessment order wherein the Assessing Officer had given a finding that BBMB was a n i n d e p e n d e n t s t a t u t o r y b o d y. Reliance was placed on para 9 of the assessment order and it was pointed out by the learned D.R. for the Revenue that the provisions of Rule 3(1), Part-1 of In come Tax Rules were not applicable as the Government of India or State Government had not provided the accommodation. It was further pointed out that the licence fees were paid by the employees to BBMB and not to the State Government and BBMB was an independent statutory body and consequently the order of the Assessing Officer was to be upheld.
15. The learned A.R. for the assessee pointed out that the provisions of Rule 3(1) of the Income Tax Rules are to be applied where a) the accommodation was provided by the Central or State Government and b) w h e r e t h e e m p l o ye e s w e r e s e r v i n g w i t h a n y b o d y o r u n d e r t a k i n g , u n d e r the control of such Central or State Government. It was further stated b y t h e l e a r n e d A . R . f o r t h e a s s e s s e e t h a t t h e e m p l o ye e s o f S t a t e G o v e r n m e n t w e r e w o r k i n g f o r B B M B b u t w e r e i n f a c t t h e e m p l o ye e s o f State Government. The learned A.R. for the assessee filed written submissions in which it has been alleged that BBMB was under the control of Central Government and had to comply with such directions as may be given to it by them. Further the residential accommodation allotted to the e m p l o ye e s of BBMB were owned by the Punjab G o v e r n m e n t a n d t h e s a i d f a c t w a s c l a r i f i e d b y t h e M i n i s t r y o f E n e r g y, Department of Power, Government of India, New Delhi vide letter dated 7.4.1977, in case related to sales tax.
16. The next plea of the learned A.R. for the assessee was that the e m p l o ye e s w o r k i n g i n B B M B w e r e t o b e t r e a t e d a s s e r v i n g i n t h e i n t e r e s t 11 of State of Punjab and no deputation licence was permissible to the said e m p l o ye e s . Reliance was placed on the ratio laid down by the Hon'ble P u n j a b & H a r ya n a H i g h C o u r t i n C W P N o . 6 7 6 8 o f 1 9 9 6 t i t l e d a s N i r m a l S i n g h & O t h e r s , w h e r e i n t h e s t a t u s o f t h e e m p l o ye e s o f B B M B a s e m p l o ye e s o f t h e S t a t e h a d b e e n u p h e l d , w h i c h i n t u r n h a d b e e n u p h e l d by the Hon'ble Supreme Court vide order dated 6.11.1998. Further contention of the learned A.R. for the assessee was that the provisions of Rule 3(1) of the Income Tax Rules were applicable and the provision at Sr.No.1 of table No.1, under Rule 3(1) of the Income Tax Rules were applicable and not provision of Sr.No.2 of table No.1 under Rule 3(1) of the Income Tax Rules. The accommodation was neither owned by BBMB, nor taken on rent or lease by BBMB and consequently no application of the said provisions. The learned A.R. for the assessee also made reference to various notifications issued in this regard and also referred to the provisions of Punjab Reorganization Act, 1966 under which BBMB was constituted.
17. We have heard the rival contentions and perused the record. Under Chapter-IV while computing the total income various heads of income are provided under section 14 of the Act. One such head of income is t h e I n c o m e f r o m S a l a r y, w h i c h i s t o b e i n c l u d e d i n t h e h a n d s o f t h e assessee in view of the provisions of section 15 of the Act, subject to deduction from salary as per section 16 of the Act. The term ' s a l a r y' , 'perquisite', 'profits in lieu of salary', are defined under section 17 of t h e A c t w h i c h u n d e r s u b - s e c t i o n ( 1 ) d e f i n e s s a l a r y, u n d e r s u b - s e c t i o n ( 2 ) defines perquisite and under sub-section (3) defines profits in lieu of salary to include various items. One of the perquisite to be included in the hands of the assessee is in relation to the accommodation provided by the e m p l o ye r to its e m p l o ye e s . Sub-section (2) provides the 12 c o m p u t a t i o n o f v a l u e o f t h e a c c o m m o d a t i o n p r o v i d e d b y t h e e m p l o ye r t o i t s e m p l o ye e s i n r e s p e c t o f t h e r e n t f r e e a c c o m m o d a t i o n p r o v i d e d o r i n relation to the value of any concession in the matter of rent, in respect o f a n y a c c o m m o d a t i o n , p r o v i d e d t o t h e e m p l o ye e s b y t h e e m p l o ye r . Section 17 (2) reads as under:
17. (2) "perquisite" includes--
(i) the value of rent-free accommodation provided to the assessee by his employer;
(ii) the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer;
[Explanation 1.--For the purposes of this sub-clause, concession in the matter of rent shall be deemed to have been provided if,--
[(a)in a case where an unfurnished accommodation is provided by any employer other than the Central Government or any State Government and--
(i) the accommodation is owned by the employer, the value of the accommodation determined at the specified rate in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;
(ii) the accommodation is taken on lease or rent by the employer, the value of the accommodation being the actual amount of lease rental paid or payable by the employer or fifteen per cent of salary, whichever is lower, in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;]
(b) in a case where a furnished accommodation is provided by the Central Government or any State Government, the licence fee determined by the Central Government or any State Government in respect of the accommodation in accordance with the rules framed by such Government as increased by the value of furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the aggregate of the rent recoverable from, or payable by, the assessee and any charges paid or payable for the furniture and fixtures by the assessee;
(c) in a case where a furnished accommodation is provided by an employer other than the Central Government or any State Government and--
(i) the accommodation is owned by the employer, the value of the accommodation determined under sub-clause (i) of clause (a) as increased by the value of the furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;
(ii) the accommodation is taken on lease or rent by the employer, the value of the accommodation determined under sub-clause (ii) of clause (a) as increased by the value of the furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;13
(d) in a case where the accommodation is provided by the employer in a hotel (except where the assessee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another), the value of the accommodation determined at the rate of twenty-
four per cent of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, whichever is lower, for the period during which such accommodation is provided, exceeds the rent recoverable from, or payable by, the assessee."
18. Section 17(2)(i) talks of the perquisite being the value of rent free a c c o m m o d a t i o n p r o v i d e d t o t h e a s s e s s e e b y h i s e m p l o ye r . F o r c o m p u t i n g the value of the perquisite on account of residential accommodation p r o v i d e d b y t h e e m p l o ye r i n t h e h a n d s o f t h e a s s e s s e e , R u l e 3 ( 1 ) o f Income Tax Rules provides as under:
Valuation of perquisites.
3. 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 (See page 1.36) :
TABLE I Sl. Circumstances Where accommodation is Where accommodation is furnished No. unfurnished (1) (2) (3) (4) (1) Where the accommodation is License fee determined by The value of perquisite as provided by the Central the Central Government determined under column (3) Government or any State or any State Government and increased by 10% per Government to the employees in respect of annum of the cost of furniture either holding office or post accommodation in (including television sets, radio in connection with the affairs accordance with the rules sets, refrigerators, other of the Union or of such State framed by such household appliances, air-
or serving with any body or Government as reduced conditioning plant or undertaking under the control by the rent actually paid equipment) or if such furniture of such Government on by the employee. is hired from a third party, the deputation. 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.
(2) Where the accommodation is provided by any other employer and--
(a) where the accommodation (i) 15% of salary in cities The value of perquisites as 14 is owned by the employer, or having population determined under column (3) exceeding 25 lakhs as per and increased by 10% per 2001 census; annum of the cost of furniture (including television sets,
(ii) 10% of salary in cities refrigerators, other household having population appliances, air-conditioning exceeding 10 lakhs but plant or equipment or other not exceeding 25 lakhs as similar appliances or gadgets) per 2001 census; or if such furniture is hired from a third party, by the actual
(iii) 7.5% of salary in hire charges payable for the other areas, same as reduced by any charges paid or payable for the same by in respect of the period the employee during the during which the said previous year.
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 Actual amount of lease The value of perquisite as
is taken on lease or rent by rental paid or payable by determined under column (3)
the employer. the employer or 15% of and increased by 10% per
salary whichever is lower annum of the cost of furniture
as reduced by the rent, if (including television sets, radio
any, actually paid by the sets, refrigerators, other
employee. 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.
(3) Where the accommodation is Not applicable. 24% of salary paid or payable
provided by the employer for the previous year or the
specified in serial number (1) actual charges paid or payable
or (2) in a hotel (except where to such hotel, which is lower,
the employee is provided for the period during which
such accommodation for a such accommodation is
period not exceeding in provided as reduced by the rent,
aggregate fifteen days on his if any, actually paid or payable
transfer from one place to by the employee:
another).
Provided that nothing contained in this sub-rule shall apply to any accommodation provided to an employee working at a mining site or an on-shore oil exploration site or a project execution site, or a dam site or a power generation site or an off-shore site--
(i) which, being of a temporary nature and having plinth area not exceeding 800 square feet, is located not less than eight kilometres away from the local limits of any municipality or a cantonment board; or 15
(ii) which is located in a remote area:
Provided further that where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to the Table above for a period not exceeding 90 days and thereafter the value of perquisite shall be charged for both such accommodations in accordance with the Table.
Explanation.--For the purposes of this sub-rule, where the accommodation is provided by the Central Government or any State Government to an employee who is serving on deputation with any body or undertaking under the control of such Government,--
(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.
19. Under the provisions of section 192 of the Act it is the r e s p o n s i b i l i t y o f t h e e m p l o ye r , w h o i s p a yi n g s a l a r i e s t o i t s e m p l o ye e s to deduct tax at source, on the amount of salary and other benefits p a ya b l e , a t a v e r a g e r a t e s o f i n c o m e t a x , c o m p u t e d o n t h e b a s i s o f t h e r a t e s a p p l i c a b l e t o t h e f i n a n c i a l ye a r f o r w h i c h s u c h s a l a r y i s p a i d i . e . on the estimated income to be paid to the assessee under the head 'Salaries'. Sub-section (1) to section 192 of the Act relates to the s a l a r i e s p a i d b y t h e e m p l o ye r t o t h e e m p l o ye e s , s u b - s e c t i o n ( 1 ) ( a ) o f t h e Act refers to the income in the nature of perquisite which is not provided b y w a y o f m o n e t a r y p a ym e n t t o b e i n c l u d e d i n t h e h a n d s o f t h e a s s e s s e e on which tax is to be deducted at source. Further provisions of section 1 9 2 r e f e r t o t h e l i a b i l i t i e s o f t h e e m p l o ye r v i s - à - v i s p a y m e n t s m a d e t o i t s e m p l o ye e s a n d t h e t a x d e d u c t i o n a t s o u r c e . We in the present set of appeals are concerned with the liabilities of the emplo yer to deduct tax at source on the perquisite value of rent free accommodation provided to i t s e m p l o ye e s a n d a c c o r d i n g l y r e s t r i c t o u r d e c i s i o n t o t h e p r o v i s i o n s o f section 192(1) and 192(1)(a) of the Act. The consequences of failure to d e d u c t o r p a y t h e a m o u n t s o d e d u c t e d t o t h e t r e a s u r y, a s s t i p u l a t e d u n d e r 16 section 192 of the Act, are provided under sub-section (1) to section 201 of the Act, which read as under:
"201. [(1) Where any person, including the principal officer of a company,--
(a) who is required to deduct any sum in accordance with the provisions of this Act; or
(b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax:
Provided that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax.]"
20. The present appeals before us are in relation to the demand raised under section 201(1) of the Act and charging of interest under section 201(1A) of the Act. Section 201(1A) reads as under:
"201[(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct [the whole or any part of the tax] or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at [one per cent for every month or part of a month] on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid [and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200].]"
21. The present set of appeals are filed by Revenue against various Drawing & Disbursing Officers of BBMB who were held to have failed in their duties of deduction of tax at source out of the perquisite value of r e n t f r e e a c c o m m o d a t i o n p r o v i d e d b y B B M B t o i t s e m p l o ye e s . T h e Government of In dia with the approval of Parliament had constituted BBMB, which was a statutory body constituted under the provisions of Section 79(1) read with Section 80(6) of the Punjab Reorganization Act, 1966 for the administration, maintenance and operation of its work i.e. Bhakra Dam Project.
22. As per Section 79 (2) of the Punjab Re-organization Act, 1966, BBMB was to consist of the following:-
17
a) a whole-time Chairman and two whole-time members to be appointed by the Central government;
b) a representative each of the Governments of the States of Punjab, H a r ya n a a n d R a j a s t h a n a n d U n i o n t e r r i t o r y o f t h e H i m a c h a l P r a d e s h (now Himachal Pradesh) to be nominated by the respective Governments or administrator, as the case may be;
c) two representatives of the Central Government to be nominated by that Government.
23. The Government of India vide Notification dated 1.10.1967 n o m i n a t e d t h e S e c r e t a r y, I r r i g a t i o n & P o w e r o f t h e p a r t n e r S t a t e s v i z . P u n j a b , H a r ya n a , R a j a s t h a n & H i m a c h a l P r a d e s h a s r e p r e s e n t a t i v e o f t h e respective State Governments in the meetings of the Bhakra Beas M a n a g e m e n t B o a r d . T h e J o i n t S e c r e t a r y, P o w e r , G o v e r n m e n t o f I n d i a and Commissioner (Indus), Ministry of Water Resources represents Government of India in the meetings of the Board.
24. The provisions of section 79(5) of the Punjab Reorganization Act are as under:
"Section 79(5) -- The Government of the successor States and of Rajasthan shall at all times provide the necessary funds to the Bhakra Management Board to meet all expenses (including the salaries and allowances of the staff) required for the discharge of its functions and such amounts shall be apportioned among the successor States, the State of. Rajasthan and Electricity Boards of the said States in such proportion as the Central Government may, having regard to the benefits to each of the said States or Boards, specify."
25. Under the provisions of section 79(5) of Punjab Reorganization Act, the Governments of partner States were to provide the requisite funds to BBMB in the requisite ratio, in order to meet all the expenses including the salary and allowances of the staff of BBMB. 18
26. Under section 79 (6) of the Punjab Re-organization Act it is provided that the Bhakra Management Board (now Bhakra Beas Management Board) shall be under the control of Central Government and shall comply with such directions as may be issued to it from time to time by the Government. The relevant provisions of sub Section (6) to section 79 of the Punjab Re-organization Act are as under: -
"Section 79 (6) - The Bhakra Management Board shall be under the control of the Central Government and shall comply with such directions, as may, from time to time, be given to it by that Government.
The Bhakra Management Board may with the approval of the Central Government delegate such of its powers, functions and duties as it may deem fit to the Chairman of the said Board or to any officer subordinate to the Board.
The Central Government may, for the purpose of enabling the Bhakra Management Board to function effectively, issue such directions to the Stale Governments of Haryana, Punjab and Rajasthan and the Administrator of the Union Territory of Himachal Pradesh or any other authority, and the State Governments, Administrator or authority shall comply with such directions.
The Bhakra Management Board may, with the previous approval of the Central Government and by notification in the official gazette, make regulations consistent -with this Act and the rules made thereunder, to provide for:-
(a) regulating the time and place of meetings of the Board and the procedure to be followed for the transaction of business at such meetings;
(b) delegation of powers and duties to the Chairman or any officer of the Board;
(c) the appointment, and the regulation of the conditions of service, of the officers and other staff of the Board;
(d) any other matter for which regulations are considered necessary by the Board,"
27. S e c t i o n 8 0 o f t h e P u n j a b R e o r g a n i z a t i o n A c t f u r t h e r l a ys d o w n t h e provision of funds by the partner States for the construction of Beas Project to be undertaken by the Central Government on behalf of the partner States. Section 80(1) reads as under:-
19
"80 (1) Notwithstanding anything contained in this Act or in any other law, the construction (including the completion of any work already commenced) of the Beas project shall, on and from the appointed day, be undertaken by the Central Government on behalf of the successor States and the State of Rajasthan:
Provided that the Governments of the successor States and the State of Rajasthan shall at all times provide the necessary funds to the Central Government for the work on the project (including, the expenses of the Board referred to in sub-section (2)} and such amounts shall be apportioned among the successor States and the State of Rajasthan in such proportion as may be fixed by the Central Government after consultation with the Government of the said States."
28. The statutory audit of all the transactions of BBMB was carried out b y the Comptroller & Auditor General of India, without any audit charges and the audit findings were reported in the Union Report of CAG under the Ministry of Power, Government of India. The Financial Adviser & Chief Accounts Officer, BBMB, had been authorized to operate the Personal Ledger Account opened in the Public Account of Government of In dia under the Head 8443-Civil Deposits. The funds received from the partner states/constituents were deposited in the P e r s o n a l L e d g e r A c c o u n t . A l l t h e p a ym e n t s w e r e b e i n g r e l e a s e d b y issuing the cheques for which the Cheque Books were issued to BBMB b y Ministry of Power, Government of India. A monthly report of cheques issued was sent to the Controller of Accounts, Ministry of Power, Government of India.
29. As per the findings of the CIT (Appeals) the status of the partner S t a t e s G o v e r n m e n t / S t a t e E l e c t r i c i t y B o a r d e m p l o ye e s w o r k i n g i n B B M B had been mentioned in Rule 10.21 of Punjab Civil Service Rules, Vol.I, Part-I and Clause (5) of the said Rules read as under:
"The deputation of an employee to the Union Territory of Chandigarh or transfer of an employee to foreign service under the BBMB or Beas Construction Board shall be treated as service in 20 the interest of State of Punjab and no deputation allowance shall be admissible,"
30. The plea of the assessee before us in this regard was as under:
"Further the status of the employees working in BBMB has been defined under Punjab Civil Service Rules which clearly lays down that deputation of employees to BBMB or Beas Construction Board shall be treated as service in the interest of State of Punjab and no deputation allowance shall be admissible to these employees. This position regarding status of employees of BBMB has been upheld by the Hon'ble Punjab and Haryana High Court in CWP No.6768 of 1996 titled "Nirmal Singh and others Vs. State of Punjab and Others".
This judgment of Hon'ble High Court has also been upheld by the Hon'ble Supreme Court of India vide order dated 6.11.1998. Further, the Hon'ble Supreme Court in the case of Jaswant Singh and Others Vs. Union of India reported in AIR 1980 SC 115 has held that employees deputed by the State Govt. for Beas Project (Original name of BBMB) would continue to get the status of Government employee and the employees recruited by Beas Construction Board will be treated as central Government employees, Beas Construction Board BEING a limb of central Government. Since Beas Project had merged into Beas Management Board renaming as Bhakra Beas Management Board, the principle decided by Hon'ble Apex Court continued to be valid till date."
31. The CIT (Appeals) vide paras 10 to 12 held as under:
10. It is further stated that when Bhakra Beas Project had started, there was an occasion for the Hon'ble Supreme Court to go into the question of the status of the employees deputed for such Beas Project. The Hon'ble Supreme Court in the case of Jaswant Singh & Ors. Vs. Union of India reported in AIR 1980 SC 115 had categorically come to the conclusion that employees deputed by the 21 State Government for Beas Project would continue to get the status of Govt employee and the employees recruited by Beas Construction Board will be treated as Central Government employees because BCB is a limb of Central Government. Taking cue from the judgment of Apex Court, when after the Beas Project had merged into Bhakra Management Board renaming it as Bhakra Beas Management Board, the underlying principle decided by the Hon'ble Apex Court would continue to be valued even today.
11. On the basis of the aforesaid facts and circumstances of the case, the appellant submitted that BBMB, a Central Government constituted and controlled Board, has a special kind of statutory status and the employees transferred from the various partner States would continue to enjoy the status of Government employees.
12 In my considered opinion, the answer to the all the above questions extracted from Punjab Reorganization Act, various Gazette Notifications, circulars and letters and submissions of the appellant categorically throw light in the direction that BBMB, for all intents and purposes, is a Government organization. BBMB for all practical purposes is under the overall supervision and control of the Central Government through its representatives.
The source of funds is from the partner States i.e. Punjab, Haryana and Rajasthan and its accounts are audited by tile Comptroller & Auditor General of India."
32. We are in conformity with the findings of the CIT (Appeals) that BBMB was a government organization working under the overall supervision and control of the Central Government through its partner States. The source of the funds for establishing the project and for r u n n i n g B B M B , f l o w e d f r o m t h e p a r t n e r S t a t e s i . e . P u n j a b , H a r ya n a , Himachal Pradesh and Rajasthan in pre-determined proportions, as per the different provisions of Punjab Reorganization Act. In view of the special statutory status being given to BBMB, which is Central Government constituted and control Board, we hold that BBMB is 22 Government and not 'other organization' as held by the Assessing Officer.
33. T h e e m p l o ye e s w o r k i n g w i t h B B M B w e r e i n t u r n t r a n s f e r r e d f r o m t h e d i f f e r e n t p a r t n e r S t a t e s . T h e s a i d e m p l o ye e s s o t r a n s f e r r e d t o B B M B and working with BBMB continued to enjoy the status of Government or S t a t e e m p l o ye e s a s t h e c a s e m a y b e a n d h e n c e w e r e e n t i t l e d t o t h e b e n e f i t a v a i l a b l e t o s u c h G o v e r n m e n t o r S t a t e e m p l o ye e s . The status of t h e e m p l o ye e s d e p u t e d b y t h e S t a t e G o v e r n m e n t f o r t h e B e a s P r o j e c t t h u s c o n t i n u e d t o b e t h e s t a t u s o f G o v e r n m e n t e m p l o ye e s . Further the e m p l o ye e s r e c r u i t e d b y t h e B e a s C o n s t r u c t i o n B o a r d w e r e t o b e t r e a t e d a s C e n t r a l G o v e r n m e n t e m p l o ye e s a s B C B w a s t h e l i m b o f C e n t r a l Government. The said was the ratio laid down by the Hon'ble Supreme Court in the case of Jaswant Singh & Ors. Vs. Union of India reported in AIR 1980 SC 115. The Hon'ble Supreme Court was considering the question of the status of the employees deputed for Beas Project. In view of the above said facts and also the Beas Project having merged with Bhakra Management Board, which was renamed as Bhakra Beas M a n a g e m e n t B o a r d , t h e e m p l o ye e s t r a n s f e r r e d f r o m v a r i o u s p a r t n e r States and employees recruited by the Beas Construction Board would c o n t i n u e t o e n j o y t h e s t a t u s o f G o v e r n m e n t e m p l o ye e s .
34. The e m p l o ye e s of BBMB had been allocated residential accommodation and the issue arising in the present appeals is the quantum of perquisite value on account of rent free accommodation p r o v i d e d t o s u c h e m p l o ye e s o f B B M B . T h e c a s e o f t h e A s s e s s i n g O f f i c e r was that the perquisite value on account of rent free accommodation was c h a r g e a b l e t o t a x i n c a s e o f ' o t h e r e m p l o ye e s ' a s p e r s e c t i o n 1 7 ( 2 ) o f t h e 23 Act read with Rule. 3(1)(ii) of the Income Tax Rules. The CIT (Appeals), however, vide paras 15 and 16 held as under:
"15. The case of the employees of the appellant fells in the category of Sr.No. 1 of Table 1 mentioned above. It has been held in the pre-pages that BBMB is also a Government organization and the accommodation is provided by it to its employees who are holding post (s) in connection with the affairs of the Union or serving with any Body or Undertaking under the control of such Government on deputation. The ownership of the accommodation provided to the employees of the BBMB lies with the partner States and the administration and maintenance of these properties is the responsibility of the Bhakra Beas Management Board. The employees transferred from partner State Governments/ Electricity Boards or recruited by Board in accordance with the Regulations notified by the Central Government in the official gazette dated 8.10.1994 draw their salary from the Personal Ledger Account maintained in the Public Account of Government of India. The licence fee on the rent free accommodation is in accordance with Rule 5.23 of the Punjab Civil Services Rules which has been added as perquisite in the salary of the employees and TDS has been deducted accordingly.
16. To sum up, for all intents and purposes, Bhakra Beas Management Board is a Government organization. I am in agreement with the submissions of the appellant that Licence Fee determined in accordance with Rule 5.23 of Punjab Civil Services Rules, Vol. I, Part I shall only be taken as taxable perquisite under Rule 3 (1) of the I.T. Rules. The appeals of the appellants are allowed."
35. The submissions of the assessee before us was that the case of the assessee falls within Sr.No.1 of Table-1 under Rule 3(1) of the Income Tax Rules. The assessee claims not to fall within Sr.No.2 of Table-1 under Rule 3(1) of the Income Tax Rules, which applies where the a c c o m m o d a t i o n i s e i t h e r o w n e d b y t h e e m p l o ye r o r t a k e n o n r e n t o r l e a s e b y t h e e m p l o ye r , w h i c h i s n o t t h e c a s e i n r e s p e c t o f t h e r e n t f r e e 24 a c c o m m o d a t i o n p r o v i d e d b y B B M B t o i t s e m p l o ye e s a n d h e n c e t h e s a i d Rule was claimed to be not applicable to the facts of the case. However, the case of the Revenue is that the accommodation provided to the e m p l o ye e s o f B B M B w a s n o t o w n e d b y B B M B a n d h e n c e t h e p r o v i s i o n s of Sr.No.1 of Table-1 under Rule 3(1) of the Income Tax Rules were not applicable and the perquisite value @ 7.5% on salary in other cases as per Sr.No.2 of Table-1 under Rule 3(1) of the Income Tax Rules were to a p p l y.
36. Coming to the provisions of Rule 3 of the Income Tax Rules, As per S.No 1 of table-1 under Rule 3(1) of Income tax Act Rules 'Where the accommodation is provided by the Central Government or any State Government to the employees either holding office or post in connection with the affairs of the Union or of such State or serving with anybody or undertaking under the control of such Government on deputation, the perquisite would be determined as under;
"License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employee."
37. The perusal of the above said Rule reflects that where the accommodation is provided by the Central Government or any State G o v t . t o t h e i r e m p l o ye e s o r t h e e m p l o ye e s s e r v i n g w i t h a n y b o d y /undertaking under the control of such Government on deputation, the license fee as determined by the Central Government or State G o v e r n m e n t a s r e d u c e d b y t h e r e n t a c t u a l l y p a i d b y t h e e m p l o ye e w o u l d be the perquisite value of rent free accommodation provided to e m p l o ye e s . T h e a c c o m m o d a t i o n s p r o v i d e d t o t h e e m p l o ye e s o f B B M B were not owned by BBMB but were owned by the Punjab Government, 25 who had requisioned the said land for Bhakra Nangal Project vide Notification dated 25.7.1947. The CIT (Appeals) has given a finding in this regard as per para 7 which is as under:
"It is submitted by the representative of the Bhakra Beas Management Board that erstwhile Punjab State vide Gazette Notification No,51935-P/1260/46 and 51938-P/1260/46 both dated July 25, 1947 had acquired the land for Bhakra Nangal Project under the provisions of Section 6 of Land Acquisition Act, 1894 and constructed the office complex and residential accommodation for the employees on the project. Government of India, Ministry of Energy has clarified that Bhakra Beas Management Board is only authorized to administer, maintain and operate Bhakra Nangal Project in terms of Section 79 of the Punjab Re-organization Act. 1966.
Ministry of Energy, Department of Power, Government of India, New Delhi vide letter No.2/22/76-DW(N) dated 7 April, 1977 has, in a case related to Sales Tax, clarified that "originally Government of Punjab was the owner of the property and at present the successor States are the owner of the said property and Bhakra Management Board has never been the owner of the property."
38. It thus appears that the land on which Bhakra Township was established was originally owned by Government of Punjab and then by the successor States. During the course of proceedings, the assessee had filed a communication from the Ministry of Power, Government of India dated 25.8.2009 addressed to the Commissioner of Income Tax, TDS Circle before the CIT (Appeals) in which it was clarified that the BBMB was not the owner of residential accommodation and it was actually being owned by the partner States Government. The extract of the clarification dated 25.8.2009 is as under:
26
"1. I am directed to say that it appears necessary to clarify the status of Bhakra Beas Management Board for the purpose of deduction of Income Tax on account of residential accommodation provided to the officers and employees working in the Board,
2. BBMB was constituted by the Government of India as a statutory body under Section 79 (1) of the Punjab Re-organization Act, 1966 for the administration, maintenance and operation of Bhakra and Beas projects. The properties including the township are regarded as a work appurtenant to the projects. The Government of Punjab and the successor states are the owners of the properties. BBMB does not own the properties.
3. It is, therefore, clear from above that BBMB is not the owner of residential accommodation of BBMB officers and staff but may be treated as if they are residing in the accommodation actually being owned by the States Government.
4. Accordingly, treating BBMB as an 'Association of Persons 'for the purposes of deduction of tax as source by treating residential accommodation occupied by BBMB employees as non-government property, is not factually correct.
5. A similar clarification issued earlier to the Excise and Taxation Authorities in 1977 is enclosed Yours faithfully, Sd/-
Bhim Sain, Under Secretary to the Government of India. "
39. In view thereof the accommodations provided by the BBMB to the State Government e m p l o ye e s were the properties owned by the Government of Punjab and the other States. A d m i t t e d l y, t h e s a i d properties were not owned by BBMB and in terms of section 79 of Punjab Reorganization Act, 1966, the residential accommodation established for the e m p l o ye e s of the Beas Project was the work pertaining to Bhakra Project, which was owned by Punjab Government and later by partner States. Consequently we find no merit in the order of the Assessing Officer in treating the residential accommodation p r o v i d e d t o t h e e m p l o ye e s b y B B M B a s o w n e d b y B B M B . Since the a c c o m m o d a t i o n t o t h e e m p l o ye e s o f B B M B h a d b e e n p r o v i d e d b y t h e respective State Governments, and where the Government of Punjab was the owner of the land originally allotted to the Bhakra Project and since 27 BBMB was functioning under the direct control of the Central G o v e r n m e n t , w h e r e i n t h e e m p l o ye e s o f B B M B w e r e t o b e t r e a t e d a s t h e e m p l o ye e s o f t h e C e n t r a l o r S t a t e G o v e r n m e n t , t h e i n g r e d i e n t s o f Sr.No.1 of Table-1 under Rule 3 of the Income Tax Rules stand fulfilled. The said provisions relates to the accommodation provided by the C e n t r a l G o v e r n m e n t o r a n y S t a t e G o v e r n m e n t t o i t s e m p l o ye e s o r e m p l o ye e s s e r v i n g w i t h a n y b o d y o r u n d e r t a k i n g u n d e r t h e c o n t r o l o f such Government on deputation. T h e e m p l o ye e s e m p l o y e d w i t h B B M B were the e m p l o ye e s of the State Government, which in turn was functioning under the control of Central Government and consequently the perquisite value of the rent free accommodation provided to such e m p l o ye e s was to be the licence fees determined by the State G o v e r n m e n t a s r e d u c e d b y t h e r e n t a c t u a l l y p a i d b y t h e e m p l o ye e s . Admittedly in the facts of the present case the licence value had been determined in accordance with Rule 5.23 of Punjab Civil Service Rules, Vol.I, Part-I and had been included as taxable perquisite under Rule 3(1) of the Income Tax Rules, in the case of the assessee.
40. W e f i n d n o m e r i t i n t h e o r d e r o f t h e A s s e s s i n g O f f i c e r i n a p p l yi n g the provisions of Sr.No.2 of table-1 under Rule 3 of Income Tax Rules, which is applicable where the accommodation is either owned by the e m p l o ye r o r i s t a k e n o n l e a s e b y t h e e m p l o ye r . The accommodation in t h e p r e s e n t c a s e p r o v i d e d t o t h e e m p l o ye e s o f B B M B w a s o w n e d b y t h e respective States and was not owned by BBMB and since the basic condition of ownership of the accommodation has not been specified in the present case, nor the premises had been taken on lease by the BBMB from the respective States, the provisions of Rule 3(1) of the Income Tax Rules as laid down under Sr.No.2 of Table-1 were not applicable. 28 Upholding the order of the CIT (Appeals) we dismiss the ground of appeal raised by the Revenue.
41. In the result, all the appeals filed by the Revenue in ITA Nos.1192 to 1255/Chd/2009 are dismissed.
O r d e r p r o n o u n c e d i n t h e o p e n c o u r t o n t h i s 2 3 r d d a y o f J u l y, 2 0 1 3 .
Sd/- Sd/-
(T.R.SOOD) (SUSHMA CHOWLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated 23 r d Jul y, 2013
*Rati*
Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.
Assistant Registrar, ITAT, Chandigarh