Arun Kumar & Others vs Union Of India & Ors

The Supreme Court examined the validity of Rule 3 of the Income Tax Rules, 1962, as amended by the Income Tax (Twenty-second) Amendment Rules, 2001, which revised the method for computing the valuation of perquisites under Section 17(2) of the Income Tax Act, 1961. The Court held that the amended Rule 3 was inconsistent with the parent Act and violated Article 14 of the Constitution, thereby quashing the notification and ruling it as ultra vires. The outcome favored the appellants, restoring the previous method of computation for perquisites.