Petitioner is an educational institution. The petitioner challenged the provision relating to tax deduction at source, on the ground that the Institution is State within article 12 of the Constitution of India and therefore, in terms of section 17\u00a0 and sub rule (1) of rule 3 of the said Rules, the value of the accommodation would be licence fees charged and there would be no question of providing any perquisite to the employees, hence not liable to deduct tax at source.\u00a0\u00a0\u00a0 Dismissing the petition the Court held that that even if the assessee was treated as State within the meaning of article\u00a012\u00a0of the\u00a0Constitution of India\u00a0it could not escape the liability to deduct tax at source on the difference between the value of the rent as assessed under rule\u00a03(1)\u00a0of the 1962 Rules and that collected from the employee by way of licence fee. The ITO\u2019s holding that the assessee was not State within the meaning of article\u00a012\u00a0of the\u00a0Constitution of India\u00a0was not correct. Since the assessee did not provide rent-free accommodation to its employees, it did not fall under clause (i) of sub-section\u00a0(2)\u00a0of section\u00a017. However, if there was any concession in the matter of rent respecting the accommodation provided by the assessee to its employees, it would be covered under clause (ii) of sub-section\u00a0(2)\u00a0of section\u00a017. Even proceeding on the basis of the assertion of the assessee that it was \u201cState\u201d within the meaning of article\u00a012\u00a0would not bring the assessee within the fold of entry 1 (which would be applicable only in a case where the employer was either the Central or the State Government) in the table below sub-rule\u00a0(1)\u00a0of rule\u00a03\u00a0of the 1962 Rules.. accordingly residential Accommodation provided to regular and contract employees on collection of\u00a0 licence fee according to area of\u00a0 quarters and commensurate with salary of\u00a0 employee\/ Perquisite\u00a0 which is \u00a0Liable to deduct tax at source.<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 192 : Deduction at source-Salary-Provision of residential accommodation by employer-Valuation of perquisite-Residential Accommodation provided to regular and contract employees on collection of licence fee according to area of quarters and commensurate with salary of employee-Perquisite-Liable to deduct tax at source. [S. 15, 17(2), ITR, 1962, R. 3(1) Art. 12, 226] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-21096","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-5ug","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/21096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=21096"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/21096\/revisions"}],"predecessor-version":[{"id":21097,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/21096\/revisions\/21097"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=21096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=21096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=21096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}