North Eastern Electric Power Corporation Limited (NEEPCO) V. Union of India

WP(C)/1954/2013

AI Insights

The case involves employees of the North Eastern Electric Power Corporation Limited (NEEPCO), who are members of the Scheduled Tribe community residing in tribal areas of Arunachal Pradesh and Assam. They sought to quash orders from the Income Tax Department and NEEPCO that allowed for the deduction of income tax from their salaries, despite their exemption under Section 10(26) of the Income Tax Act, 1961. The petitioners argued that previous Full Bench judgments had already established their right to this exemption, which was being violated by the respondents' actions. The court found in favor of the petitioners, citing the finality of the earlier judgment and the lack of any procedural or substantive justification for the tax deductions.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 697080 (HC-ASSAM)
• Appeal Type: Others
• Pronouncement Date: 18-01-2013
• Assessment Year: misc
• Other Referred Cases: P.K. Taye & ors. Vs. Union of India and ors. (2010) 2 GLR 367
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Income tax exemption; Scheduled Tribe; Tax deduction at source; Full Bench Judgment
• Section: 197; 10(26); 197A; 197A

Judgement Text

"WP(C) 1954/2013 BEFORE HON’BLE THE CHIEF JUSTICE MR. A.K. GOEL HON’BLE MR. JUSTICE A.K. GOSWAMI (A.K.Goel, C.J.) This petition seeks quashing orders dated 18.1.2013 and 5.2.2013 (Annexu res-N and O) and direction against deduction of income tax at source in view of Full Bench judgment of this Court in the case of the petitioners being P.K. Taye & ors. Vs. Union of India and ors. (2010) 2 GLR 367. The petitioners are employees of the North Eastern Electric Power Corpor ation Limited (NEEPCO), a Government of India Enterprise. They are posted at dif ferent places in the State of Arunachal Pradesh and at Dima Hasao in the State o f Assam. They belong to Scheduled Tribe Community and reside in tribal areas as specified in 6th Schedule to the Constitution of India. They are exempted from payment of tax under Section 10(26) of the Income Tax Act, 1961. They earlier ap proached this Court against deduction of tax in respect of earlier assessment ye ars which was allowed by the Full Bench as above. It was held that no deduction of tax was permissible from their income. Accordingly, circulars dated 24.2.2010 and 29.3.2010 were issued by the Income Tax Department to the said effect. Stil l, the Income Tax Department issued circular dated 18.3.2012 against which W.P.( C) No.4666/2012 and other writs were filed which were disposed of vide order 11. 10.2012 permitting the writ petition to be withdrawn to enable the petitioners t o make an application under Section 197 of the Income Tax Act. The petitioners t hereafter filed declaration under Section 197A of the Act that their taxable inc ome was nil and no tax was liable to be deducted from their income. In spite of filing of such declaration, the Department has directed that pending considerati on of the declaration, tax may be deducted. We have heard learned counsel for the petitioners and perused the record s, particularly the impugned order dated 18.1.2013 issued by the CIT (TDS) to th e effect that in absence of certificate under section 197 of the Income Tax Act, tax may be deducted from the salary of the petitioners and the order dated 5.2. 2013 issued by the NEEPCO to the same effect. Since the matter appears to be covered by the earlier Full Bench judgmen t of this Court in the case of the petitioners themselves, it is not considered necessary to issue notice to the respondents. The petitioners having been held entitled to exemption from payment of t ax under Section 10(26) of the Act and the judgment of the Full Bench having att ained finality, the respondents cannot act in violation of the said judgment on any pretext. If any procedural compliance is necessary, the petitioners have und ertaken to comply with the same but there is no justification to deduct tax from the salary of the petitioners when no tax is due as per the decision of the Ful l Bench. Accordingly, this petition is allowed and the respondents are restrained from deducting any tax from the salary of the petitioners in violation of law l aid down by this Court in above Full Bench judgment. "