S.10(26) IT Act | Gauhati HC Upholds Refund Of Income Tax Deducted From Scheduled Tribe Officer's Salary, Says He Was Entitled To Exemption

A division bench of Chief Justice Vijay Bishnoi and Justice N. Unni Krishnan Nair passed the direction in view of Section 10(26) of the Income Tax Act, 1961, which prescribes tax exemption to members of recognised Scheduled Tribe communities posted in specified areas.

It observed, “It is not disputed that the sole respondent, herein, belongs to a notified Scheduled Tribe community of the State of Rajasthan…it not being disputed that the sole respondent, herein, while being posted at Agartala, Tripura; was so posted in a specified area in terms of the provisions of Section 10(26) of the Income Tax Act, 1961, it is to be held that he would be entitled to the benefits of exemption from income tax flowing from the provisions of Section 10(26) of the Income Tax Act, 1961.”

The Court thus dismissed the appeal preferred by the Commissioner of Income Tax against single judge direction to process the request for refund of income tax deducted from the Respondent's salary.

The Respondent belongs to the Meena Community which is considered as a Scheduled Tribe under the Constitution Scheduled Tribe State Order, 1951, in the State of Rajasthan. He was recruited in the Border Security Force in the year 1991 as an Assistant Commandant.

The IT Department contended that Respondent is a member of the Scheduled Tribe community for the State of Rajasthan and the State of Rajasthan not being identified as a 'specified area' under Section 10(26), he would not be entitled to claim the benefit.

Respondent on the other hand referred to the Full Bench decision in Pradip Kr. Taye & ors. v. Union of India & ors. (2010) to contend that persons belonging to Schedule Tribe will be eligible to the benefit of Section 10(26) irrespective of their places of posting.

He further claimed that he is not claiming income tax exemption for the period he was posted at Silchar in Assam, which is not a specified area under Section 10(26). Rather, he is claiming income tax exemption relating to the period he was posted at Agartala in Tripura, which is a specified area.

Taking this into account, the High Court dismissed the Department's appeal.

Appearance: Advocate for the Petitioner : SC Keyal; Advocate for the Respondent : A Goyal, A Choudhury

Case title: Union of India & Ors. v. Chyawan Prakash Meena

Case no.: Case No. : WA/342/2023

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