High Court Of Madhya Pradesh : Full Bench
All India State Bank Of Indore Officers’ Co-Ordination Committee & Anr. vs. Central Board Of Direct Taxes & Ors.
Section 17(2)(ii), RULE 3
A.K. Patnaik, C.J.; Dipak Misra & K.K. Lahoti, JJ.
Writ Petn. No. 762 of 2002
10th July, 2007
Counsel Appeared :
Sumit Nema, for the Petitioners : Sanjay Lal, for the Respondents
ORDER
BY THE COURT :
Heard Mr. Sumit Nema, learned counsel for the petitioners, and Mr. Sanjay Lal, learned counsel for the respondents.
2. In this writ petition, the petitioners have prayed for a declaration that r. 3 of the IT Rules, 1962, as amended by the IT (Amendment) Rules, 2001, is ultra vires, invalid inasmuch as it runs contrary to provisions in s. 17(2) of the IT Act, 1961, and is also discriminatory and arbitrary and violative of Art. 14 of the Constitution.
3. A Division Bench of this Court delivered an order on 1st Sept., 2003 for placing the matter before the Chief Justice for Constitution of a larger Bench. Thereafter, the Chief Justice has constituted this Full Bench to hear and decide the matter.
4. After hearing Mr. Summit Nema, learned counsel for the petitioners and Mr. Sanjay Lal, learned counsel for the Department, we find that the questions raised in this writ petition have already been decided by the Supreme Court in Arun Kumar & Ors. vs. Union of India & Ors. (2006) 205 CTR (SC) 193 : (2006) 286 ITR 89 (SC). The conclusion of the Supreme Court in the case of Arun Kumar & Ors. vs. Union of India & Ors. (supra) is quoted hereinbelow : “For the foregoing reasons, we hold that though r. 3 of the Rules cannot be held arbitrary, discriminatory or ultra vires Art. 14 of the Constitution nor inconsistent with the parent Act [s. 17 (2)(ii)], it is in the nature of a ‘machinery provision’ and applies only to the cases of ‘concession’ in the matter of rent respecting any accommodation provided by an employer to his employees. Whether or not Parliament could have in the exercise of legislative power created a ‘deeming fiction’ as to concession in the matter of rent in certain circumstances (for which we express no final opinion), no such deeming provision is found in the Act. It is, therefore, open to the assessee to contend that there is no ‘concession’ in the matter of accommodation provided by the employer to the employees and the case is not covered by s. 17(2)(ii) of the Act.”
5. This writ petition is thus disposed of in terms of the aforesaid judgment of the Supreme Court in Arun Kumar & Ors. vs. Union of India & Ors. (supra). The authorities will decide all other claims of the petitioners relating to perquisites in the light of the judgment of the Supreme Court in Arun Kumar & Ors. vs. Union of India & Ors. (supra) insofar as such claims are covered by the said judgment.
[Citation : 297 ITR 447]
