1981 (8) TMI 88 - AT - Income Tax

Summary

Issues:
1. Whether a female assessee is entitled to exemption under section 5(1)(ix) of the GT Act for gifting a life insurance policy to her minor son.
2. Whether the expression "person" in the provision includes both males and females.
3. Whether the minor child is dependent on the assessee for claiming the exemption.

Analysis:
1. The assessee, a female, gifted a life insurance policy to her minor son and claimed exemption under section 5(1)(ix) of the GT Act. The Commissioner held that the assessee was not entitled to the exemption, citing that the relief was available only to male assessees. The counsel for the assessee argued against this discrimination based on sex, invoking the General Clauses Act to support the interpretation that "person" includes both males and females.

2. The department contended that the intention to grant relief only to male assessees was evident in the provision. Referring to a Supreme Court decision, the department argued that specific mention of "wife" in the clause indicated a restriction to males. However, the Tribunal reasoned that in legal interpretation, unless contextually excluded, "person" includes both genders. The Tribunal highlighted the need to interpret statutes in a manner that does not violate fundamental rights and emphasized that interpretations leading to discrimination should be avoided.

3. Section 5(1)(ix) of the GT Act exempts gifts made to a person dependent on the donor for support and maintenance. The Tribunal emphasized that the obligation to support a minor child is a legal duty for both parents, irrespective of their financial status. The Tribunal held that the mother, being duty-bound to maintain the child, was entitled to the exemption, especially since she had declared the child's dependency on her, which was not contested. The Tribunal concluded that the assessee should be allowed the exemption based on the child's dependency on her.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the female assessee, holding that the exemption under section 5(1)(ix) of the GT Act applied to both males and females. The Tribunal also emphasized the legal obligation of parents to support their minor children, affirming the entitlement of the mother to claim the exemption based on the child's dependency on her.