G P GHORE Vs. UNION OF INDIA

JUDGEMENT

(1.) THE cause of action in this case arose as employees of Income-tax Department posted in Bhilai have been allotted quarters by the Bhilai Steel Plant (in short 'BSP') and as per the system existing, the rent was being paid directly by the employees to the BSP. THEse employees were being paid House Rent Allowance (in short 'HRA') from their department. THE Principal Chief Controller of Accounts of the Central Board of Direct Taxes issued impugned circular dated 5/8th September, 1997 (Annexure-A-1) in which it was stated that those Central Government Officers/officials of the Income-tax Department, who were occupying residential accommodation provided by the Central Government/State Government/Autonomous Body/Public Sectors Undertaking/Municipalities/Port Trust/Nationalised Banks/LIC etc. are not entitled to draw any HRA as per Rules 5(C) of HRA & CCA Rules (FR & SR Pt.V). In this connection a report dated 20.2.1996 (Annexure-A-4) was sent by the Assistant Commissioner of Income-tax, Bhilai to the Additional Commissioner of Income-tax, Range-I, Raipur, in which it has been mentioned that the BSP authorities have been changing the terms and conditions of allotment of quarters from time to time on their own and till about 4-5 years back the employees were applying for the BSP quarters with the certificate from the department directly to BSP. This report further states that the Income-tax Department had not signed any agreement with the BSP authorities for allotment of quarters nor given any other undertaking regarding recovery of licence fees. This O.A. is against stoppage of HRA of such employees of the Income-tax Department who were occupying BSP quarters and recovery of the past HRA given to them since they occupied the BSP quarters.

(2.) The learned Counsel for the applicants stressed on the report of the Assistant Commissioner of Income Tax, Bhilai (Annexure-A-4) referred to above. He also stated that wrong interpretation is being made of Rule 5(C) ibid which relates only to such cases where HRA is not admissible when the employee shares Government accommodation allotted rent free to another Government servant or he/she resides in an accommodation provided to his parents/son/daughter or where the spouse has been allotted accommodation in the same station. The learned Counsel states that in these circumstances the said rule does not apply in the present case.

(3.) MR. B.da. Silva, learned Counsel for the respondents slated that the BSP is a fully Government owned organisation and, therefore, the plea taken by the employees of the Income-tax Department is not correct. He has referred to the letter dated 20.11.1997 (Annexure-R-II) written by the Dy. Town Administrator (B&H), BSP where it has been mentioned that the BSP quarters have been allowed in the name of the Income-tax Department and the rent and other dues may be recovered from the salary of the employees of the Income-tax Department and remitted to BSP. They have also requested in the letter to get the quarters vacated by non-entitled employees i.e. those who have been transferred/ retired.