IIT Not to Be Considered as Govt. Authority for Computing Perquisite Value of Rent-free Accommodation | ITAT

  • Blog|News|Income Tax|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 22 January, 2024

Rent-free Accommodation

Case Details: ACIT vs. Indian Institute of Technology - [2024] 158 taxmann.com 457 (Delhi-Trib.)

Judiciary and Counsel Details

    • Anubhav Sharma, Judicial Member & M. Balaganesh, Accountant Member
    • Devashish JainMs Kanika Jain, Advs. for the Appellant.
    • Ms Maimun Alam, Sr. DR for the Respondent.

Facts of the Case

Assessee, a university, was established under the Institutes of Technology Act 1961. It was funded by and worked under the administrative control of the Ministry of Education, Government of India.

In accordance with the IIT Statutes, every employee of the Institute may be allotted an unfurnished house within the Institute campus for residential use in which he shall be required to reside. The employee shall be charged a prescribed license fee. The amount of the license fee was decided under law and deducted by the assessee before the salary was paid to the employee.

The Assessing Officer (AO) held that the assessee was required to deduct tax on the perquisite value of accommodation provided to the employees at the rate of 15% of salary. He held that the perquisite on the accommodation provided to the employees of the assessee was to be computed in accordance with section 17(2)(ii).

Assessee argued that the taxation of employees should be equivalent to that of Central/State Government employees. The assertion was also made that the assessee levies a ‘license fee’ from employees assigned residential flats at a rate specified by the Central Government. This practice ensures uniform treatment for all employees in similar circumstances, with no preferential treatment granted. Consequently, the taxable value of accommodation provided to employees should be considered nil.

On appeal, the CIT(A) held that no perquisite value of rent-free accommodation was provided to employees and deleted the demand. The matter reached before the Tribunal.


The Tribunal held that the taxpayer was an independent entity of the Government. Simply being an institution created through an Act of Parliament and relying on clauses from the IIT Act and IIT Statutes that indicate some level of control by the Central Government does not confer upon the taxpayer the status of being part of the Central Government.

Thus, the CIT(A) has fallen in error in holding that the assessee falls in the Central Government category for section 17(2).

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied