M/S INDIAN INSTITUE OF SCIENCE vs. THE ASST COMMISSIONER OF INCOME TAX

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF JULY 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR I.T.A. NO.661 OF 2016 BETWEEN: M/S. INDIAN INSTITUTE OF SCIENCE DR. C.V. RAMAN ROAD, MALLESWARAM BANGALORE-560012 REP. BY ITS REGISTRAR MS. V. RAJARAJAN. ... APPELLANT (BY SMT. KAVITHA JHA, ADV., FOR SRI. PRASHANTH KUMAR D, ADV.,) AND: THE ASST. COMMISSIONER OF INCOME TAX (TDS), CIRCLE 16(2), BANGALORE-560032. ... RESPONDENT (BY SRI. K.V. ARAVIND, ADV.,) - - - THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 11.08.2016 PASSED IN ITA NO.1262/BANG/2015 FOR THE ASSESSMENT YEAR 2011- 12, PRAYING TO: (i) FORMULATE THE SUBSTANTIAL QUESTION OF LAW AS STATED ABOVE IN FAVOUR OF THE APPELLANT BY ALLOWING THE APPEAL AND SET ASIDE THE TRIBUNAL ORDER IN ITA NO.1262/BANG/2015 DATED 11.08.2016 (ANNEXURE A) IN SO FAR AS THE QUESTIONS OF LAW RAISED IN THIS APPEAL.

2 (ii) ALLOW THE APPEAL AND REVERSE THE IMPUGNED ORDER INSOFAR AS THE ISSUES RAISED IN THIS APPEAL ARE CONCERNED & ETC. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2011-12. The appeal was admitted by a bench of this Court on the following substantial questions of law: "(a) Whether on the facts and circumstances of the case, the appellant is an instrumentality and/or agency of the Government and thus has to be treated at par with the Government employees under Table 1 of Rule 3 of the Income Tax Rules, 1962? (b) Whether the rules applicable to the Government employees for the purpose of computing value of perquisites under

3 Section 17(2) of the Act would be applicable in the case of the appellant?

(c) Whether the Tribunal erred in not appreciating that the Assessing Officer was obligated to establish that the Appellant has provided any concession to the Employees in respect of the accommodation before applying Rule 3 of the Income Tax Rules 1962?

(d) Whether the appellant can be treated as an assessee in default without the Assessing Officer establishing that the appellant has extended any concession in the form of accommodation to its employees?

(e) Whether Rule 3 of the Income Tax Rules, 1962b will only apply once a liability is created under the charging provision - Section 17(2)(ii) of the Income Tax Act, 1961?

4 2. For the reasons assigned by us in the judgment passed today in I.T.A.No.277/2015, the appeal is dismissed. Sd/- JUDGE Sd/- JUDGE ss