Tripura H.C : Benefit of clause (26) of section 10 will be available to members of scheduled tribe only residing in any areas specified in said section

High Court Of Tripura

Amal Shyam vs. Union Of India

Section : 10(26), 10

U.B. Saha And S. Talapatra, JJ.

W.P. (C) No. 19 Of 2012

August  14, 2013

JUDGMENT

U. B. Saha, J. – The petitioners, 32 in numbers, are employed under the Oil and Natural Gas Corporation Ltd. (for short “ONGC Ltd.”), and presently working under the Tripura Asset of ONGC Ltd. Since all of them belong to the scheduled tribe community, their challenge in this writ petition is the letter of the Income-tax Officer (TDS), Agartala, dated December 1, 2011 (annexure E to the writ petition) and the letter dated December 14, 2011 (annexure G to the writ petition) wherein respondent No. 6, the Asset Manager, ONGC Ltd., Tripura Asset, was informed that it came to the notice of him that in gross violation of the provisions of section 192 of the Income-tax Act, 1961, no deduction of tax at source is being made in respect of the employees who are members of the scheduled tribe posted in the State of Tripura even though no certificate authorizing non-deduction/lower deduction as per the Income-tax Act has been issued from their end. Such action is violative of the provisions of the Income-tax Act (hereinafter for short referred to as “the Act”) and, consequent upon, respondent No. 6 was requested to send the list of the scheduled tribe employees who are working under the control of respondent No. 6 along with their present and permanent addresses for taking further necessary actions, and also to furnish the details of those scheduled tribe employees before December 21, 2011.

2. Heard Mr. D. Chakraborty, learned counsel assisting Mr. B. Das, learned senior counsel appearing for the petitioners as well as Mr. P. K. Biswas, learned Assistant SG appearing for respondents Nos. 1 to 4. Also heard Mr. Somik Deb, learned counsel appearing for respondents Nos. 5 and 6.

3. Considering the facts involved and as agreed to by the learned counsel for the parties, the instant writ petition is taken up for final disposal at the order stage.

4. The facts necessary to be unfolded to decide this case are as under :

The petitioners are the scheduled tribes notified under the scheduled tribe order as issued with the aid of article 366 of the Constitution of India and also permanent residents of a place other than the State of Tripura where at present they are working. According to them, they are not liable to pay income-tax in view of the exemption as provided under section 10(26) of the Income-tax Act, 1961, but the income-tax authority, respondent No. 4 has asked their employer, ONGC Ltd., Tripura Asset to deduct the income-tax from their salary. It is further stated that they are fully covered by a Full Bench decision of the Gauhati High Court In Pradip Kumar Taye v. Union of India [2010] 320 ITR 29/189 Taxman 483 wherein the Full Bench of the Gauhati High Court taking note of various decisions of the apex court held that a classification of the Government servants for exemption in terms of section 10(26) is violative of article 14 and the Government servants or the employees of the “State” (within the meaning of article 12) lose the benefit on the mere incident of his being posted out of his place of origin, but within the areas specified under section 10(26) when they are entitled to the benefit of the said section if by an incident he is posted in the same area of his origin. Such an interpretation, it is held, which is dependent upon pure “accident” and exigencies of the service, would lead to wholly arbitrary results and undesirable consequences and ultimately allowed the writ petition filed by the petitioner therein holding that they are exempted from paying income-tax. It is further stated that the impugned letters issued by the respondent is without jurisdiction and thus liable to be quashed.

Respondents Nos. 1 to 4 by way of filing an affidavit-in-opposition have stated that in none of the impugned letters, the respondent-employer, particularly, respondent No. 6 was asked to deduct income-tax from the salary of the petitioners, rather respondent No. 6 was requested to instruct the concerned tax deducting authority for compliance with the provisions of the Act and also for furnishing details of the scheduled tribe employees working under his control as required under section 192 as well as 197 of the Act which provides for deduction of tax on the income. It is further stated that the case of Pradip Kumar Taye (supra) has no application in the instant case. In that case, income-tax was deducted from the petitioners for which they had approached the court to direct the respondents therein to give exemption to them from paying income-tax and also to refund the income-tax already deducted from them at source. But, in the instant case, neither income-tax is deducted from the salary of the petitioners nor is it held that they are not entitled to exemption as provided under section 10(26) of the Act. Only respondent No. 6, employer of the petitioners, was asked to furnish certain information regarding the scheduled tribe employees working under him.

6. The respondent-ONGC did not file any affidavit-in-opposition.

7. Mr. Chakraborty, learned counsel submits that admittedly, all the petitioners belonging to the scheduled tribe community are at present working under the Tripura Asset of the ONGC Ltd. and as a result of the impugned letters, they have apprehension that the employer, ONGC Ltd., would deduct income-tax from their salary violating the provisions of section 10(26) of the Act and, thus, they have filed the instant writ petition for quashing the impugned letters so that the respondent-Revenue cannot ask the employer-ONGC Ltd. to deduct any tax from their salary.

8. On query, Mr. Chakraborty has informed us that the employer-ONGC Ltd. have not deducted income-tax from their salary nor has the respondent-employer been directed by the respondent-Revenue to deduct any income-tax from the salary of the petitioners and the petitioners are also not directed to deposit any income-tax. Mr. Chakraborty has also submit-ted that some of the petitioners have already been exempted from the tax liability by the income-tax authority.

9. Mr. Deb, learned counsel though contended that, admittedly, the petitioners are scheduled tribes notified under the scheduled tribe order for an area other than the area of the State of Tripura and, thus, they are not entitled to the benefit of section 10(26) of the Act. He has also submitted that the case of Pradip Kumar Taye (supra) has no application in this case. He has finally submitted that the respondent-ONGC, vide his letter dated December 21, 2011, has replied to the impugned letter dated December 1, 2011, and informed the respondent-Revenue regarding the decision in the case of Pradip Kumar Taye (supra) and contended that as per their under-standing persons responsible for paying any income chargeable under the head “Salaries” are obligated by law to consider the exemption from tax admissible under section 10(26) of the Act and any failure to do so could place them in a position where they could be considered as having not acted bona fide in deducting tax at source under section 192 of the Act and where they could be considered as being in contempt of court. Accordingly, it has further been informed that they are already deducting tax at source in compliance with the provisions of section 192 of the Act and intend to continue to do so in future as well, and their action may not be considered to be in contravention of the provisions of section 192 of the Act.

10. Mr. Biswas, learned Assistant SG at the very outset submits that the instant writ petition is a premature one as the income-tax authority, i.e., respondent No. 4, at no point time, asked the respondent-employer to deduct any income-tax from the salary of the petitioners at source, rather the respondent-Revenue asked for certain information to take its decision. He further submits that the person who wants to get the benefit of section 10(26), he has to prove that he is a member of the scheduled tribe named and figured in the scheduled tribe list. He further submits that the authority who are paying salary are also responsible to act in accordance with sections 192 and 197 of the Act and furnish the information sought for by respondent No. 4 so that they can verify as to whether the scheduled tribe employees working under ONGC Ltd., Tripura Asset are entitled to the benefit of section 10(26) of the Act or not.

He has also contended that a person being the scheduled tribe of an area as notified by the President is the scheduled tribe in relation to that State only but does carry the status of the scheduled tribe along with him in place where he migrates. But that is not the question in instant writ petition for decision. Thus, the point raised by the petitioners in the writ petition need not to be decided on the merits.

11. Having heard the learned counsel for the parties and considering the entire facts and circumstances, we are of the view that the impugned letters are the internal correspondences between the respondent-Revenue and the respondent-employers of the petitioners and in none of the impugned letters, it is stated that the petitioners are debarred from getting exemption of paying income-tax in view of the provision of section 10(26) of the Act and the petitioners without approaching respondent No. 4 came before this court, though against the order of respondent No. 4, a statutory alter-native remedy is available.

If the contention of Mr. Chakraborty that some of the petitioners have already been exempted from the tax liability is correct, then obviously the remaining petitioners shall also get the same benefit subject to they are similarly situated, We have also noted that even on apprehension, a writ petition can be filed if either the Constitutional right or the legal rights are going to be affected and the statutory alternative remedy is not available.

12. We have also considered the case of Pradip Kumar Taye (supra). According to us, the facts of that case and the facts involved in the instant case are totally different and it would not be proper on our part to express any opinion regarding the decision in Pradip Kumar Taye case (supra). As and when an opportunity would come, obviously we would answer to the question as to whether a person, admittedly a schedule tribe of a State in view of the presidential order under clause (25) of article 366 of the Constitution and subsequently migrated to another State either for employment or for any other purpose, is liable to pay tax or not.

13. As the question raised by Mr. Deb relating to the entitlement to the exemption from paying income-tax of the petitioners are not before us, it would not be proper on our part to deal with that aspect.

14. At this stage, it would be profitable to reproduce the relevant provisions of section 10(26) of the Act, which is as under :

“10. In computing the total income of a previous year of any per-son, any income falling within any of the following clauses shall not be included-…..

(26) in the case of a member of a scheduled tribe as defined in clause (25) of article 366 of the Constitution, residing in any area specified in Part I or Part II of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the State of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura) or in the areas covered by Notification No. TAD/R/35/50/109 dated the 23rd February, 1951, issued by the Governor of Assam under the proviso to sub-paragraph (3) of the said paragraph 20 (as it stood immediately before the commencement of the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971) or in the Ladakh region of the State of Jammu and Kashmir, any income which accrues or arises to him,-

(a) from any source in the areas or States aforesaid, or

(b) by way of dividend or interest on securities.”

15. In U.P. Public Service Commission v. Sanjay Kumar Singh AIR 2003 SC 3626, the apex court has considered a question as to whether a tribe notified in relation to a particular State if migrated to another State wherein such tribe is not specified can get the benefit of reservation as scheduled tribe candidate and taking note of its earlier decision in State of Maharashtra v. Union of India [1994] 5 SCC 244 as well as Municipal Corporation of Delhi v. Veena [2001] 6 SCC 571 and answered the question in the negative, though considering the peculiar circumstances of that case, the apex court held that “the ends of justice would be met if the appellants are directed to consider the case of the respondent in general category and if in comparison with the general candidate selected, the respondent had secured higher marks/grading, he should be offered appointment to an appropriate post against one of the existing vacancies”.

16. Thus, in view of the aforesaid decision of the apex court, it can be said that a person when migrated from his own State, where he belonged to the scheduled tribe or caste, to another State in connection with his employment or any other purposes, he cannot be considered as a scheduled tribe or scheduled caste in the migrated State where his tribe is not in the order notified under clause (25) of article 366 of the Constitution. However, as in that case regarding the entitlement of exemption under section 10(26) of the Act was not the subject matter, the said question was not decided and it would not be proper on our part also to consider the said question as the same is not the subject matter in the instant case.

17. In clause (26) of section 10 of the Act stipulates that income of a member of scheduled tribe which accrued or arose from whatever source in the area or States referred to in the said sub-section or income received by such scheduled tribe by way of dividend or interest on security shall not be included in his total income in his previous year, meaning thereby, the benefit of clause (26) of section 10 of the Act will be available to the members of the scheduled tribe residing “in any areas” specified in the said section. In other words, members of the scheduled tribe residing in other part of the country other than the one and specified under section 10(26) of the Act are not entitled to the benefit of section 10(26) of the Act.

18. In view of the above, the instant writ petition is disposed of with a direction to the petitioners to furnish a certificate to the respondent-employer as required under the provisions of the Act. The respondent-employer shall furnish the information as sought for and upon receipt of the said information respondent No. 4 shall take his decision. It is also made clear that respondent No. 4 should not take any action against respondents Nos. 5 and 6 till a final decision is taken up by the concerned authority.

[Citation : 359 ITR 440]

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