Decided on February 23,1973



Goswami C.J. - (1.) THE petitioner belongs to the Garo community, which is a Scheduled Tribe as defined in Clause (25) of Article 366 of the Constitution, and is a permanent inhabitant of the Garo Hills District, which is an area specified in Part-A of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution. He is a Resident Medical Officer in the Lokapriya Gopinath Bordoloi Memorial T. B. Aid Society at Gauhati, an autonomous institution, which received grants-in-aid from the Government of Assam. THE Income-tax Officer (respondent No. 1) wrote to the secretary of the society (respondent No. 3) to deduct income-tax of the petitioner at source under the appropriate provisions of the Income-tax Act, 1961 (briefly "the Act"), and the society is accordingly complying with the direction of the department. THE petitioner claims an exemption from payment of tax as, according to him, a member of the Scheduled Tribe as such is not liable to pay income-tax. He further submits that the decision of the Supreme Court in S.K. Dutta v. Lawrence Singh Ingty, 1968 68 ITR 272 affirming the decision of this court, governs his case and he is not liable to pay Any tax under the Act. By an amended application, the petitioner challenges the validity of Section 10(26) of the Act, being violative of Article 14 of the Constitution.
(2.) THE department resists all the pleas of the petitioner. With regard to Section 10(26) of the Act, the Income-tax Officer states in his counter-affidavit as follows: "I say that the intention of the legislature is to provide relief to members of the Scheduled Tribe residing in the specified areas with a purpose to raise their socio-economic set-up and to give a fillip for advancement of trade, business, profession, occupation or vocation within the specified areas. I say that Section 10(26) of the Income-tax Act, 1961, in any view of the matter, is not liable to be struck down as illegal and ultra vires." Before proceeding further, we may set out the impugned provision of the Act: "10. In computing the total income of a previous year of any person, 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 A or Part B of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the State of Nagaland or in the Union Territories of Manipur and Tripura, any income which accrues or arises to him, (a) from any source in the area, State or Union Territories aforesaid, or (b) by way of dividend or interest on securities." In Lawrence Singh Ingty's case the Supreme Court struck down the words "who is not in the service of Government" in Clause (26) and the same have been omitted by Act 42 of 1970, and shall be deemed to have been always omitted.
(3.) SECTION 4 is the charging section, and taxation is the rule and exemption is the exception. SECTION 5 describes the scope of total income. SECTION 10 appears in Chapter III of the Act with the heading "Incomes which do not form part of total income" which includes all income from whatever source derived which "is received" under SECTION 5(1)(a) and which "accrues or arises", etc., under SECTION 5(1) (b) and (c). By SECTION 5, the territorial nexus of the taxing country with the income of the assessee is made the basis for chargeability to tax. Under SECTION 4, it is only when any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year. It is obvious that there is always a minimum limit of income which is not chargeable to tax. Income-tax is, therefore, concerned with only persons who are chargeable to tax in accordance with the rates prescribed by the Central Act of the relevant year. SECTION 4 is again subject to other provisions of the Act, which includes SECTION 10. The argument, therefore, that a marginal assessee, like the petitioner, with a low level of chargeable income residing at Gauhati, may be hard hit whereas his counterpart in the Hills will be unaffected is not relevant for the proper determination of the question that arises for consideration. We have to decide this question on the scheme and provisions of the Act and particularly of the provisions of SECTION 10 while considering the challenge made against the impugned provision under Article 14 of the Constitution. After making the above general observations, we will now deal with the submission of the learned counsel. It is contended that Section 10(26) is violative of the Constitution as it discriminates between persons belonging to the same Scheduled Tribe without any rational basis whatsoever. The petitioner, it is said, is a member of the Scheduled Tribe and there is no rational basis to charge him to tax at Gauhati, while if he earned the particular income in Garo Hills, he would have been exempted under the impugned clause. This provision, therefore, treats unequally persons equally circumstanced and placed. We have already noticed that income-tax is chargeable under Section 4 and at the rates prescribed by an appropriate Central Act.;

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