Income Tax Act, 1961 - Sections 17(2)(viii) and Rule 3(7)(i) - Constitutionality - Taxation of Fringe Benefits or Amenities - Essential Legislative Function - Benchmark for Interest-Free/Concessional Loans

I. Background and Legal Framework

• Section 15 to 17 of the Income Tax Act
• Definition of 'Salary', 'Perquisites', and 'Profits in lieu of salary'
• Section 17(2)(viii) and Rule 3(7)(i): Taxation of Fringe Benefits/Amenities

II. Challenge and Issues

• Challenged Provisions: Section 17(2)(viii) and Rule 3(7)(i)
• Grounds of Challenge: Excessive Delegation and Violation of Article 14
• Two Main Issues:
  1. Delegation of Essential Legislative Function
  2. Arbitrariness and Violation of Article 14

III. Analysis of Delegation of Legislative Function

• Essential Legislative Function Test
• Determination of Legislative Policy and Standards
• Examination of Legislative Intent and Guidance Provided
• Application of Essential Feature Test
• Precedents and Legal Framework Supporting Delegation

IV. Constitutionality of Rule 3(7)(i) under Article 14

• Benchmarking Interest Rates: SBI's PLR
• Rationality and Fairness in Benchmark Selection
• Preventing Litigation, Ensuring Clarity, and Tax Efficiency
• Judicial Deference to Legislative Wisdom in Tax Matters
• Conclusion on Constitutionality under Article 14

V. Conclusion

• Dismissal of Appeals and Upholding of Impugned Judgments
• No Order as to Costs