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2016 (11) TMI 541 - GAUHATI HIGH COURT

2016 (11) TMI 541 - GAUHATI HIGH COURT - TMI - Tax exemption under Sub-section (26) of Section 10 - whether by virtue of being residents of Jonai and salary being earned as faculty members of the Murkong Selek College, Jonai, the income of the petitioners is traceable to the defined area, under the notification of 23.2.1951? - Held that:- From the communication of 27.4.2004 (Annexure-2) of the ITO, North Lakhimpur, it can be seen that the officer was influenced by the fact that Tribal Belt areas .....

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the subsequent notification of 13.3.1951. - Having concluded thus, we direct the jurisdictional Income Tax Officer (ITO) to re-visit the petitioners claim for tax exemption, under Section 10(26) of the I.T. Act, by identifying the area where they reside and wherefrom they earn their salary income, in the context of the areas specified 12.in the notification dated 23.2.1951. - Writ Petition (C) No.4089/2013 - Dated:- 8-11-2016 - Hrishikesh Roy And L. S. Jamir, JJ. For the Petitioners: Mr. J.C .....

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culty members of the Murkong Selek College, Jonai and they seek exemption of their salary earnings from tax, under Sub-section (26) of Section 10 of the Income Tax Act, 1961 (hereinafter referred to as the I.T. Act ). 3. Under Section 10 of the I.T. Act, in computing total income of any person, the income falling under various categories under the different Sub-sections of Section 10, shall be excluded from the levy of income tax. The relevant provision in the present case is Section 10(26), whi .....

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or in the areas covered by Notification No. TAD/R/35/50/109, dated the February 23, 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 interes .....

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am Governor on 23rd February, 1951. They accordingly applied for exemption of the salary earnings, received by them as a faculty members of the Murkong Selek College, under Section 10(26) of the I.T. Act. However the plea was declared to be untenable by the ITO, North Lakhimpur on the ground that the petitioners do not reside in the areas covered by the 23.2.1951 notification and that their salary income does not accrue from such areas, as contemplated by Section 10(26) of the I.T. Act. 6. The s .....

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tipulates that in computing the total income of an assessee, who is a member of a scheduled tribe as defined in clause (25) 1 of article 366 of the Constitution, (1) any income, which accrues or arises to him from any source in the areas or States mentioned in sub-section (26), should be excluded, and also (2) income, arising by way of a dividend or interest on security, is also required to be excluded irrespective of the territory from which such accrual has taken place. However, there are cert .....

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specified in Section 10 sub-section (26). They are (1)……………, (2)……………., (3) areas covered by Notification No. TAD/R/35/50/109, dated the February 23, 1951, issued by the Governor of Assam, and (4)……………… ………………………………………….. ………………&helli .....

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and separate States were created which is a historical fact. The abovementioned notification carne to be issued in exercise of the power conferred by the proviso to sub-paragraph (3) of paragraph 20 of the Sixth Schedule. It may be mentioned that paragraph 20 of the Sixth Schedule to the Constitution itself stood amended by an Act of Parliament known as the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971). We need not examine the purpose of the said notification, but from the tenor o .....

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benefits under section 10 sub-section (26), Parliament thought it fit that notwithstanding the scheme of paragraph 20 of the Sixth Schedule to the Constitution and the authority of the Governor to exclude certain areas and the consequential decision of the Governor to notify by the abovementioned notification, those areas are also required to be treated on par with other parts of the North Eastern areas of the country. 7. From the above analysis of the exemption provision under Section 10(26) o .....

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be identified and it must also be decided whether such areas are covered by the notification of 23.2.1951. 8. In the case before us, some confusion is created by the petitioners by referring to another notification of 13th March, 1951, whereby the Murkong Selek area under the Jonai Revenue Circle were declared to be Tribal Belt area, under the Assam Land Revenue Regulation, 1886. But the learned counsel for the petitioners now contend that for considering the claim to tax exemption for the petit .....

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on fulfillment of certain conditions i.e. firstly, the geographical area of the residents and 2ndly, the source of the area from which, the income is accruing. According to Mr. S. Sarma, the learned standing counsel for the Income Tax Deptt., the exemption under Section 10(26) of the I.T. Act is with reference to income deriving from a specified area, as the people of that area are in need of protection and upliftment. He however also contends that the notification of 13th March, 1951, is not at .....

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