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2023 (3) TMI 217 - HC - Income TaxExemption of payment of Income Tax u/s 10(26) - right of member of a Scheduled Tribe - scope of expression residing in any area specified - grievance of the writ petitioner is that although he is certified to be a member of the Schedule Tribe Meena in the State of Rajasthan and by virtue of which he is exempted from payment of Income Tax under the provisions of Section 10(26) of the Income Tax Act, 1961, Income Tax has been deducted from his salary in the form of Taxes Deducted from Source (TDS) - petitioner is serving as a DIG (Ops) of Border Security Force and is posted in Masimpur, Silchar, Assam - HELD THAT - As per Section 10(26) of the Income Tax Act, 1961 any member of a Scheduled Tribe as defined in Clause (25) of Article 366 of the Constitution, residing in any of the areas prescribed under Section 10(26), is exempted from payment of income tax. Having perused the Judgment of this Court rendered by a full Bench in Pradip Kr. Taye ( 2009 (12) TMI 285 - GAUHATI HIGH COURT ) as well as in view of the Tax Exemption Certificates dated 10.12.2020 and 21.04.2021 issued by the respondent department; this Court is of the view that the prayers made by the petitioner will have to be allowed. The petitioner is indeed entitled to the benefits accrued under Section 10(26) of the Income Tax Act, 1961. Accordingly, Mandamus is hereby issued to the respondent, more particularly, the Commissioner of Income Tax (TDS) as well as the concerned Income Tax Officer of the ward to expeditiously process the request for refund of income tax deducted from the salary of the petitioner and remit to the petitioner forthwith. Respondent department is directed to carry out this order within a period of three (3) weeks from the date of receipt of a certified copy of this order.
Issues:
1. Entitlement to Income Tax Exemption under Section 10(26) of the Income Tax Act, 1961 for a member of a recognized Scheduled Tribe. 2. Refund of Income Tax deducted from the petitioner's salary despite being certified as a member of a Scheduled Tribe. 3. Interpretation of the expression "residing in any area specified" under Section 10(26) for eligibility of tax exemption. 4. Application of the law laid down in the judgment of Pradip Kr. Taye and Ors. Vs. Union of India and Ors. 5. Issuance of Mandamus for the refund of income tax deducted from the petitioner's salary. Analysis: 1. The petitioner, a DIG (Ops) of Border Security Force and a member of a recognized Scheduled Tribe from Rajasthan, claimed Income Tax Exemption under Section 10(26) of the Income Tax Act, 1961. The petitioner's grievance was the deduction of Income Tax from his salary despite holding a Caste Certificate and representations seeking refund of the deducted taxes. 2. The petitioner relied on the judgment in Pradip Kr. Taye case, which established that Scheduled Tribe members are entitled to the benefit of Section 10(26) irrespective of their place of posting. The Income Tax Department did not dispute this legal position and requested time for instructions. 3. The court analyzed Section 10(26) and the interpretation of the expression "residing in any area specified." Referring to the Pradip Kr. Taye judgment, the court emphasized that the benefit of tax exemption is not restricted to the original place of residence but extends to Scheduled Tribe members migrating within specified areas. 4. The court highlighted the historical context of the provision and the reasoning behind extending the tax exemption benefit to Scheduled Tribes. It rejected the restrictive interpretation proposed by the revenue department and affirmed the entitlement of Scheduled Tribe members to tax exemption under Section 10(26). 5. Considering the petitioner's entitlement to tax exemption and the issued Tax Exemption Certificates, the court granted Mandamus to the Income Tax authorities to process the refund of deducted income tax promptly. The department was directed to comply with the order within three weeks and request any necessary document verification from the petitioner. This detailed analysis of the judgment highlights the petitioner's entitlement to Income Tax Exemption, the legal interpretation of Section 10(26), and the court's decision to issue Mandamus for the refund of deducted income tax.
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