An order issued by the Central Board of Direct Taxes, as Memo No. CCIT/RAN/Tech./Hospital/2018-19, dated 31 January 2019. Issued under proviso to section 17(2), sub-clause (ii), read with rule 3A.
An order of the Chief Commissioner of Income-tax, Jharkhand Region, Ranchi, approving a named hospital for the purposes of the proviso to section 17(2) of the Income-tax Act, 1961, read with rule 3A of the Income-tax Rules, 1962. Where a hospital carries such an approval, an employer's expenditure on an employee's treatment there is dealt with under the proviso rather than charged as a perquisite. This is a grant to one hospital for a fixed period.
This is an order of the Board. An order is issued under a power the Act itself gives the Board — most often section 119, which lets it direct its own officers and, in the cases the section names, relax a requirement. Read the enabling words before deciding how far it reaches: the power is administrative, and it cannot rewrite the charge.
Approval is granted to 'Raj Hospitals, Main Road, Ranchi' for the purpose of the proviso, the Chief Commissioner acting under sub-clause (ii) of the proviso to section 17(2) read with rule 3A of the Income-tax Rules, 1962. The approval runs from 31 January 2019 to 1 February 2022, three years in all. It is not transferable. The hospital must allow inspection by income-tax officers authorised for the purpose, must continue to meet the conditions in rule 3A(2), must inform the authority at once if any condition ceases to be satisfied, and must apply for renewal not less than thirty days before the approval expires.
Section 17(2) charges an employer's payment for an employee's medical treatment as a perquisite unless the hospital is approved. The approval is given hospital by hospital on the rule 3A criteria by the Chief Commissioner of the charge, on application. This order disposes of one such application at Ranchi. Its practical audience is the employers in that region who deduct tax on salary and the employees whose treatment is paid for.
It binds the income-tax authorities of the Ranchi charge while it is in force: they must accept that the hospital is approved. It obliges no employer and no employee to do anything. Whether a particular payment falls within the proviso at all is still decided by the Assessing Officer on the facts, and ultimately by the Tribunal, which is not bound by an approval letter of the department.
31 January 2019 to 1 February 2022, as printed in the order.
Approval is for a fixed period and lapses unless renewed — the order itself requires the renewal application thirty days before expiry, so a gap is possible. It covers this hospital and no other unit or branch. And it says nothing about which items of expenditure qualify; that remains a section 17(2) and rule 3A question on the facts of the payment.
read with Rule 3A of the Income Tax Rules, 1962, approval is hereby granted to 'Raj Hospitals, Main Road, Ranchi' for the purpose of the said proviso
— the Central Board of Direct Taxes, order Memo No. CCIT/RAN/Tech./Hospital/2018-19, 31 January 2019. Read it in the department’s own PDF.
| Under the Income-tax Act, 1961 | Now, in the Income-tax Act, 2025 |
|---|---|
| section 17 | section 16, section 17, section 18 |
My employer gave me a concessional staff loan. Is the interest I saved taxable as a perquisite?
My employer gave me a company flat at a low licence fee and now adds a perquisite value to my salary under Rule 3. Can I say there was no concession at all?
My employees exercised stock options but the shares are locked in and non-transferable. Was I supposed to deduct tax on the market value less what they paid?
My employer pays part of the premium on a superannuation policy, but I get nothing unless I stay until retirement. Is that contribution taxable as a perquisite in my hands now?
My Indian contract says my pay is free of Indian tax and the Indian company pays the tax for me. Is that tax itself taxable in my hands?
We pay our salesmen a turnover commission on top of salary and contribute to the provident fund on both. Is the contribution on the commission deductible?
What here is the Board’s and what is ours. The document is the Central Board of Direct Taxes’ own. Its number, its date and the words quoted above are reproduced from the Board’s own PDF, which is here. Everything else on this page is ours: the plain-English account of what the document is and what it does, the reading of which provision it turns on, the note on what to watch, and the choice of cases. Where our account and the document part, the document governs.
An order of the Board binds the department, not you and not a court. The Board writes to its own officers. An assessee may hold the department to an order or an instruction that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves. This is the most common mistake made with this material, and it is worth making twice: a direction of the Board is not a section of the Act.
What we could not settle. The memo number's trailing serial is not legible on the scan and is recorded as far as it can be read.