TMI Blog2002 (3) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax to the extent of Rs. 17,205 in order to enable the writ petitioner to execute the lease. The petitioner who is admittedly a member of the Scheduled Tribe of the State of Nagaland applied to the jurisdictional Income-tax Officer for grant of an exemption certificate in view of the provisions of section 10(26) of the Income tax Act, 1961. The authority did grant a certificate to the petitioner certifying that the petitioner is not liable to pay income-tax under section 10(26) of the Act in respect of any income arising or accruing to him from any source in any area specified as a Sixth Schedule area under the aforesaid provisions of the Constitution of India or in terms of the relevant notification issued by the Governor of Assam in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 10(26) of the Act. Learned counsel has further submitted that when the transactions entered into by the petitioner in respect of the lease and income arising therefrom are exempted from payment of income-tax, the question of collection of income-tax at source under the provisions of section 206C of the Act does not and cannot legitimately arise. Learned counsel has further submitted that the aforesaid restrictions contained in the exemption certificate, as noted hereinabove, have been so included by the jurisdictional Income-tax Officer on account of the provisions contained in the proviso to section 206C of the Act. It is the contention of learned counsel that the aforesaid proviso will have no application in the case of an asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive that the Income-tax Officer, it is submitted, had issued the exemption certificate and had taken the stand that the collection at source be made in respect of the transactions entered into by the petitioner and if in the course of assessment proceeding, on the basis of returns submitted by the petitioner, it is found that the petitioner is entitled for exemption such amount as may be found to have been collected and deducted, will be refunded to him. On the aforesaid basis, learned counsel for the Revenue has submitted that there would be no occasion for this court to interfere with the order impugned in the present writ proceeding. The submissions advanced by learned counsel for the parties have been duly taken note of. This court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be generated by the writ petitioner from the lease in question has originated from a Sixth Schedule area and, therefore, the petitioner's income is exempted under section 10(26) of the Act, no question of applicability of section 206C of the Act can legitimately arise. If the income itself is exempted, any deduction/collection, on account of income-tax, at source, would be beyond the powers conferred by the provisions of the Act. The following passage from the judgment of the apex court in Bhawani Cotton Mills Ltd. v. State of Punjab [1967] 20 STC 290 ; [1967] AIR 1967 SC 1616, 1623, though made in a somewhat different context may be usefully extraded here under: "If a person is not liable for payment of tax at all, at any time, the colle ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
