ACIT Vs Indian Institute of Technology (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi delivered a significant ruling in the appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) concerning the valuation of perquisites and tax deduction on rent-free accommodation provided to employees by the Indian Institute of Technology (IIT). This article provides a comprehensive overview of the case and the tribunal’s ruling.
Case Overview
- Background: The appeal by the Revenue pertained to the assessment year 2012-13, where the Indian Institute of Technology (IIT), an educational institution in Delhi, provided unfurnished accommodation to its employees within the campus. The employees were required to pay a prescribed license fee for the accommodation.
- Assessment by AO: The Assessing Officer (AO) determined that the IIT was required to deduct tax at source on the perquisite value of accommodation provided to employees. The AO invoked Section 17(2)(ii) of the Income Tax Act, 1961, and computed the perquisite value at 15% of the salary.
- CIT(A) Decision: The Commissioner of Income Tax (Appeals) relied on precedent, including a decision by the Tribunal’s Guwahati Bench, and held that there was no perquisite value of rent-free accommodation provided to employees by the IIT. The demand raised by the AO was deleted.
- Appeal Before ITAT Delhi: The Revenue appealed before the ITAT Delhi, challenging the CIT(A)’s decision. The grounds of appeal included contentions regarding the status of the IIT, applicability of Rule 3 for perquisite valuation, and the existence of concessions provided by the IIT.
ITAT Delhi’s Verdict
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