1998 (4) TMI 62 - HC - Income Tax

Summary

Issues:
1. Whether breach of rest allowance and torch cell allowance can be subjected to income tax.
2. Whether respondents are obligated to not deduct income tax at source from the mentioned allowances.
3. Whether a mandamus can be issued for deciding the case of the petitioners regarding the deduction of income tax at source.

Analysis:
1. The petitioners sought relief for a declaration that breach of rest allowance and torch cell allowance should not be subjected to income tax. The court clarified that if an allowance is not to be included in the income chargeable under the head "Salary," the petitioners can claim deduction before the Income Tax Officer. The decision on whether such allowances are to be included in the salary would be made by the Income Tax Officer, and if exempted, the petitioners would be entitled to a refund in subsequent years. The court declined to interfere under Article 226 of the Constitution, stating that an adequate remedy is provided in the Income-tax Act, emphasizing the need to consider the interest of the Revenue.

2. The petitioners requested a mandamus to the respondents to decide on the deduction of income tax at source concerning the breach of rest allowance and torch cell allowances. The court explained that a mandamus can only be issued for the performance of a statutory obligation. Since no statutory obligation was pointed out for making a representation to the authority and paying tax only after the authority's decision on the inclusion of allowances in income, the court held that no mandamus could be issued. However, the order did not prevent the petitioners from pursuing the authority to consider whether such income should be included under the head "Salary" for tax deduction at the source.

3. Ultimately, the court found the writ petition to be without merit and rejected it. The judgment highlighted the importance of statutory obligations for issuing a mandamus and emphasized that the petitioners could still engage with the authority regarding the inclusion of allowances in the salary for tax deduction at the source.