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Telangana High Court
Telangana Grameena Bank Officers ... vs Telangana Grameena Bank on 15 April, 2026
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH
AND
THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN
Writ Appeal No.426 of 2026
Dated: 15.04.2026
Between:
Telangana Grameena Bank Officers Association,
Rep., by its President Mr. Kranthi Kumar Makkad,
Hyderabad and another.
... Appellants
and
Telangana Grameena Bank,
Rep., by its Chairman, Hyderabad and another.
...Respondents
JUDGMENT:
Sri Vedula Srinivas, learned Senior Counsel represents Ms. Vedula
Chitralekha, learned counsel for the appellants.
Sri B.S. Prasad, learned Senior Counsel represents Sri Mujib
Kumar Sadasivuni, learned counsel for respondent No.1 Bank.
Sri A. Krishnam Raju, learned counsel for respondent No.2.
2. Whether interest free loans or loans at concessional rate qualify as a
fringe benefit and perquisite was answered by the Hon'ble Apex Court in
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the decision rendered in All India Bank Officer's Confederation vs.
Regional Manager, Central Bank of India and others 1.
3. The appellants/writ petitioners, who are the employees of
respondent No.1 - Grameena Bank, approached the writ Court to declare
Circular No.Per/2025-26/56, dated 15.10.2025 issued by respondent No.1
Bank as illegal and arbitrary and to direct respondent No.1 Bank not to
affect any tax deduction at source of the income tax on the value of
perquisites of the salaries paid to the officers/employees of the Bank. The
relevant part of Circular dated 15.10.2025 is extracted hereunder:
"DEDUCTION OF INCOME TAX ON PERQUISITES VALUE OF
STAFF LOANS FOR FY 2024-25 AND FY 2025-26
Please refer to our HO Circular No.PER/2024-25/80, dated
17.03.2025 regarding deduction of tax on perquisites value of staff loans
for the Financial Year 2024-25 and submission of employee
declaration/undertaking in terms of interim directions of Hon'ble High
Court of Telangana in W.P.No.9026 of 2015.
In terms of the above circular and the undertaking submitted by
the employees, tax on perquisite value of concessional loans was not
deducted and remitted for the FY 2024-25. In view of the judgment
delivered by the Hon'ble Supreme Court in Civil Appeal No.7708 of
2014 in the month of May, 2024, it has now been decided to remit the
income tax on perquisites value for FY 2024-25 and FY 2025-26, as
mandated for compliance with Income Tax provisions, after deducting
the same from the concerned staff members."
4. The learned writ Court, however, refused to grant relief while
relying upon the judgment of the Hon'ble Apex Court in All India Bank
(2024) 9 SCC 664
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Officers' Confederation case (supra). Being aggrieved, the writ
petitioners are in appeal.
5. Learned Senior Counsel for the appellants submits that there is no
quarrel regarding the preposition on the question whether grant of interest
free loans or loans at concessional rate qualify as a fringe benefit and
perquisite, but whether the employer or the employee is liable to pay tax in
lieu thereof, is the question involved in the instant case. The lead Bank
i.e., the State Bank of India has taken up on itself the responsibility of
bearing income tax on perquisite value of "staff housing loans", "staff car
loans" and "staff education loans" provided by the Bank for the eligible
employees for the financial year 2024-25 vide Circular dated 15.03.2025.
The respondent Grameena Bank is also obliged to bear the income tax dues
in lieu of such perquisite value of "staff housing loans", "staff car loans"
and "staff education loans" paid to the writ petitioners/employees of the
Bank.
6. The respondent Bank has, on the other hand, relied upon the
relevant provision of Section 192(1A) of the Income Tax Act, 1961 (for
short, "the Act") which provides for an option for the employer to either
bear the income tax dues in lieu of such perquisites allowed in favour of its
employees or to deduct it from the employees themselves. He has referred
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to the contents of the counter affidavit of the respondent Bank. He
submitted that the learned writ Court has rightly held that the award dated
30.04.1990 of the National Industrial Tribunal holding that the employees
in respondent No.1 Bank are entitled for all benefits on par with the
employees of sponsor Bank would not prevail over the judgment of the
Hon'ble Apex Court in the case of All India Bank Officers'
Confederation case (supra). Moreover, when the main provision under
Section 192(1A) of the Act provides an option for employer to bear the tax
in lieu of such perquisites granted to its employees, the respondent Bank is
legally protected in taking a decision depending upon its solvency to
deduct tax amount from the employees for the relevant years. It is
submitted that the lead Bank i.e., the State Bank of India may be in a better
financial position which may be the basis for bearing the income tax on
perquisites value of "staff housing loans", "staff car loans" and "staff
education loans" by Circular dated 15.03.2025, but the option of
respondent No.1 Bank exercised in accordance with the enabling statute
i.e., Section 192(1A) of the Act, cannot be faulted upon. Therefore, the
learned writ Court was not in error in refusing to grant relief to the
appellants/writ petitioners.
7. Upon hearing learned counsel for the parties and the material placed
on record, we do not find any error in the impugned order. The
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comparison of the appellants, who are employees of respondent No.1
Bank, with the employees of the State Bank of India would not come to
their aid since the parent provision under Section 192(1A) of the Act fairly
provides an option to the employer either to bear the dues or to deduct it
from its employees salary. The Circular dated 15.10.2025 of respondent
No.1 Bank opting to charge it from the employees, therefore, cannot be
faulted. Therefore, we do not find any merit in the writ appeal.
8. Accordingly, the writ appeal is dismissed. There shall be no order
as to costs.
Miscellaneous applications pending, if any, shall stand closed.
____________________________
APARESH KUMAR SINGH, CJ
____________________________
G.M.MOHIUDDIN, J
Date: 15.04.2026
ES
