IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7708 OF 2014

ALL INDIA BANK OFFICERS' CONFEDERATION

APPELLANT

VERSUS

THE REGIONAL MANAGER, CENTRAL BANK OF INDIA, AND OTHERS

WITH

RESPONDENTS

CIVIL APPEAL NO. 18459 OF 2017

CIVIL APPEAL NO. 18460 OF 2017

CIVIL APPEAL NO. 18462 OF 2017

CIVIL APPEAL NO. 18461 OF 2017

CIVIL APPEAL NO. 18464 OF 2017

CIVIL APPEAL NOS. 18465-18466 OF 2017

CIVIL APPEAL NOS. 18457-18458 OF 2017

AND

CIVIL APPEAL NO. 18467 OF 2017

JUDGMENT

SANJIV KHANNA, J.

This common judgment decides the appeals filed by staff unions and officers' associations of various banks, impugning judgments which dismiss their writ petitions, where the vires of Section 17(2) (viii) of the Income Tax Act, 1961 ^ 1 or Rule 3(7)(i) of the Income Tax Rules, 1962 ^ 2 or both, were challenged.

Section 17(2) (viii) of the Act includes in the definition of 'perquisites'³, 'any other fringe benefit or amenity', 'as may be prescribed'.4 Rule 3 of the Rules prescribes additional 'fringe benefits' or 'amenities', taxable as perquisites, pursuant to Section 17(2) (viii) It also prescribes the method of valuation of such perquisites for taxation purposes. Rule 3(7)(i) of the Rules stipulates that interest-free/concessional loan benefits provided by banks to bank employees shall be taxable as 'fringe benefits' or 'amenities' if the interest charged by the bank on such loans is lesser than the interest charged according to the Prime Lending Rates of the State Bank of India.

3. Section 17(2) (viii) and Rule 3(7) (i) are challenged on the grounds of excessive and unguided delegation of essential legislative function to the Central Board of Direct Taxes 7. Rule 3(7)(i) is also challenged as arbitrary and violative of Article 14 of the Constitution insofar as it treats the DID of SBL as the

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