V.K. Gupta, C.J. - (1.) BY this common judgment, we propose to dispose of the abovementioned batch of writ applications wherein the vires and legality of Notification No. S. O. 940(E), dated September 25, 2001 (see [2001] 251 ITR (St.) 81), has been challenged. Vide this impugned notification, the Central Board of Direct Taxes, Department of Revenue, Government of India in the Ministry of Finance, has brought about an amendment in the Income-tax Rules, 1962. We are concerned in this batch of petitions only with respect to the substitution of new rule 3 with the old one. Substituted rule 3 reads thus : "3. Valuation of perquisites.--For the purpose of computing the income chargeable under the head 'Salaries', the value of perquisites provided by the employer directly or indirectly to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined in accordance with the following sub-rules, namely :-- (1) The value of residential accommodation provided by the employer during the previous year shall be determined on the basis provided in the Table below : . . . Provided that nothing contained in this sub-rule would be applicable to any accommodation located in a 'remote area' provided to an employee working at a mining site or an onshore oil exploration site, or a project execution site or an accommodation provided in an offshore site of similar nature: Provided further that where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to the Table above for a period not exceeding 90 days and thereafter the value of perquisite shall be charged for both such accommodations in accordance with the Table. (2) (A) The value of perquisite provided by way of use of motor car shall be determined on the basis provided in the Table II below." Table I of the newly introduced rule 3 by virtue of the aforesaid amendment at SI. No. 2 relates to the category of the perquisite (accommodation). This category relates to the accommodation provided by an employer other than the Union or the State Government. The category of such accommo- dation as a perquisite as occurring in the Table I appended to rule 3 reads thus :
(2.) THE impugned notification has been assailed mainly on two grounds. Firstly that it gives arbitrary and unfettered powers to the Revenue because computation of the perquisite on the basis of the percentage of the salary (10 per cent of salary and 7.5 per cent, of salary) as occurring in column 3 of the Table has no nexus with the object sought to be achieved and is not based on an intelligible differentia. It has also been argued and urged that there can be cases where the houses allotted to the employees by the employer may be such lower rental that 10 per cent. or even 7.5 per cent. of the salary may be considered to be very much on the higher side. The other challenge to the impugned notification is that it made the amendment applicable retrospectively. We have heard learned counsel for the parties and have given our careful considerations to the rival contentions advanced at the Bar.
(3.) THE impugned amendment was brought about as a consequence of the Budget Speech by the Finance Minister in Parliament. In the Budget Speech the Finance Minister very pertinently observed that the Revenue had been facing some difficulties in the past with respect to the assessment and computation of the perquisites relating to the accommodation. Section 17 of the Income-tax Act, 1961, in relation to "salary", in Sub-section (2) stipulates that "perquisite" includes the value of rent-free accommodation provided to the assessee by his employer or the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer.;