2013 (7) TMI 580 - HC - Income Tax

Interest on minor s income - Tribunal clubbed interest income earned by minors with income of their mother - Held that - In the previous case of appellant Anju Mehra vs Union of India and others 2013 (7) TMI 559 - PUNJAB & HARYANA HIGH COURT it has already been decided that power conferred under Section 64(1A) to club the minors income with income of the parent whose income is greater is legal and does not suffer from any legal disability - Decided against the assessee.

Summary

Issues:
Challenge to clubbing of interest income of minors with mother's income under Section 64(1A) of the Income Tax Act, 1961.

Analysis:
The appeal in question pertains to the clubbing of interest income earned by minors with the income of their mother, invoking Section 64(1A) of the Income Tax Act, 1961. The appellant contests the clubbing of individual income of minors with their mother's income, arguing that the provision does not permit such clubbing and that Section 64(1A) has been wrongly interpreted. On the other hand, the revenue's counsel asserts that the appellant challenged the vires of Section 64(1A) through a writ petition, which was dismissed, leading to subsequent review applications also being rejected.

The Income Tax Officer initially clubbed the minors' income with the mother's income instead of the father's income, citing the mother's higher income. The appellant's appeals against this decision were dismissed by the Income Tax Appellate Tribunal. The central legal question at hand revolves around the validity of Section 64(1A) of the Income Tax Act, 1961, which mandates the inclusion of income arising to a minor child in the parent's total income. The provision includes exceptions for income from manual work or specialized activities by the minor child.

The judgment refers to a previous case, CWP No.13510 of 2003, where the legality of Section 64(1A) was challenged and the court upheld the provision as valid and not suffering from any legal disability. Since the question of law regarding the vires of Section 64(1A) has already been decided against the appellant in the earlier case, the current appeal is dismissed based on the precedent set by the previous judgment.