The Madras High Court has dismissed a writ petition challenging the Constitutional validity of Section 17(2)(viii) of the Income Tax Act, 1961 which empowers the executive authorities to prescribe the value of any fringe benefit or amenity, other than those listed under the provision, under the definition of the term ‘perquisites’ provided to salaried class and levy tax on it.


A Division Bench of Justices V. Ramasubramanian and N. Kirubakaran dismissed the petition filed by All India Bank Officers’ Confederation, a registered trade union, after rejecting its contention that Parliament ought not to have given to the executive the right to prescribe the value of any fringe benefit or amenity under the term ‘perquisites’ without any restrictions.

Though the petitioner confederation claimed that Section 115WB of the Act gave an extensive definition of the expression ‘fringe benefit’ and therefore the officials should not have been empowered under Section 17 (2) to add anything more than that, the judges said: “In so far as Section 115WB is concerned, the same defines fringe benefits for the purpose of Chapter XII-H of the Act.

“Under Chapter XII-H, an additional income tax known as fringe benefit tax, was sought to be imposed under Section 115WA. Therefore, the benefits listed out in Clauses (a) to (d), in sub-section (1) of Section 115WB, relate only to the fringe benefit tax chargeable under Section 115WA. This cannot be extended to Section 17(2) which defines the term perquisites for levying income tax.” #casansaar (The Hindu)