1995 (7) TMI 122 - AT - Income Tax

Summary

Issues:
- Interpretation of exemption under section 22D of the High Court Judges (Conditions of Service) Act, 1954 for house rent allowance received by a retired Judge appointed as Chairman of a Special Court.
- Validity of the Commissioner's order under section 263 of the Income-tax Act.

Analysis:
1. The appeal concerned the interpretation of the exemption provision under section 22D of the High Court Judges (Conditions of Service) Act, 1954 for a retired Judge appointed as Chairman of a Special Court. The Commissioner initiated proceedings under section 263, contending that the assessee, a retired Judge appointed as Chairman, was not entitled to claim exemption on house rent allowance. The Commissioner set aside the assessment order, prompting the appeal by the assessee.

2. The assessee argued that as a retired Judge appointed as Chairman, he was entitled to the same benefits as a serving Judge of the High Court, including exemption under section 22D of the Act. The Tribunal analyzed the relevant provisions and government orders related to the appointment, highlighting that the Chairman of the Special Court should be a retired or serving Judge of a High Court. The Tribunal also referenced a similar case where a retired Judge was entitled to exemption on house rent allowance.

3. Referring to the case of Justice H.R. Sodhi, where a retired Judge was appointed as Chairman of an Advisory Board, the Tribunal found parallels with the present case. The Tribunal concluded that the assessee, as Chairman of the Special Court, was entitled to claim exemption on house rent allowance, similar to a serving High Court Judge. The Tribunal emphasized that the definition of 'Judge' under the Act did not differentiate between retired and serving Judges, supporting the assessee's entitlement to the exemption.

4. Ultimately, the Tribunal held that the assessee, being a retired Judge appointed as Chairman of the Special Court, was eligible for the exemption on house rent allowance. The Tribunal disagreed with the Commissioner's view, ruling that the assessment order was not erroneous or prejudicial to revenue interests. Consequently, the Tribunal canceled the Commissioner's order under section 263 and allowed the grounds of the assessee's appeal, thereby granting the exemption on house rent allowance.

5. In conclusion, the Tribunal's decision favored the assessee, affirming his entitlement to exemption on house rent allowance under section 22D of the High Court Judges (Conditions of Service) Act, 1954. The judgment highlighted the parity in benefits between retired Judges appointed as Chairmen and serving High Court Judges, emphasizing the continuity of entitlement to exemptions irrespective of retirement status.