Case Law Details
RELEVANT PARAGRAPH
48. Section 17(2)(ii) as it stood prior to amendment in 2007 did not contain any ‘deeming clause’ to deem rent paid less than 10% or 7.5% as a concession or that the employees is deemed to have received that concession. An employer may provide residential accommodation to his employees for several reasons. It is also possible that for making available staff quarters/colonies/ accommodations, State Governments or Central Government may provide land to public sector undertakings/ companies/ corporations at a concessional rate imposing appropriate conditions including the amount of rent, if any, to be recovered by the employer and in such circumstances as held by certain decisions that residential facility provided by the employer to the employee was not a “perquisite” within the meaning of income-tax laws. In such a case instead of concession, there would be compulsion.
49. As also held by the Supreme Court, in the absence of deeming the difference as perquisite, it is open to the assessee to contend that there was in fact no concession in the matter of rent, and that can only be on the. yardstick of the case laws relied upon by the assessee, namely, the decisions of Uttranchal High Court, Calcutta High Court and M.P. High Court and the Bombay Tribunal referred to above and other attending circumstances. The Revenue has to give a finding as to concession in the matter of rent in the absence of the deeming provision to treat the difference as perquisite in view the decision in Arun Kumar1 case (supra).
50. Again, as stated in the case of Arun Kumar, there might be reasons for providing accommodation to employees looking to location, situation, aren, exigency of employment and in such companies instead of concession, there was compulsion. Western Coal Field is in remote area and the Proviso lo Rule 3 itself provides for such an exception when it states that nothing contained in this sub-rule would be applicable to any accommodation located in a ‘remote area” provided to an employee working at a mining site or an onshore oil exploration site, or a project execution site or an accommodation provided in an off shore site of similar nature; or in the amended Proviso with effect from 1-10-2004. providing that nothing contained in this sub-rule shall apply to any accommodation provided to an employee working at a mining site or an onshore oil exploration site or a project execution site, or a dam site or a power generation site or an off-shore site which, being of a temporary nature and having plinth area not exceeding 800 square feet, is located not less than • eight kilometers away from the local limits of any municipality or a cantonment board; or is located in a remote area,”
51. The Id. DR then attempted to also justify the action of the Assessing Officer by the amendment with retrospective effect in section 17(2) deeming the difference in amount at specified rate and rent charged from the employees as perquisite by inserting Explanation 1. The Explanations 1 and 4 to Section 17(2) are referred for contending the concession in the matter of rent is to be determined with respect to the fixed rate, 10% in cities having population sxceeding 4 lakhs and 7.5% in other cities upto 2006-07 and being 15% of salary in cities having population exceeding 25 lakhs; 10% of salary in cities laving population exceeding ten lakhs but not exceeding twenty-five lakhs and 7.5% of salary in any other place thereafter. This amendment was, brought by Finance Act, 2007 but it was with retrospective effect from 1-4-2002, and therefore, according to Id. DR, it would apply to all cases under consideration and the cases relied upon are of no help to the assessee. A retrospective amendment has to be given full effect and it is to be assumed that an amended provision was in force right from the date with effect from which retrospective effect is given. This is even by the appellate authority where the retrospective amendment was introduced during pendency of appeal.
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