Allahabad High Court Judge Challenges Denial of Tax Exemption on Statutory Allowances Under New Tax Regime
In a significant legal development with potential implications for judicial officers and tax administration, a sitting judge of the Allahabad High Court has challenged the denial of income tax exemption on statutory judicial allowances after opting for the new income tax regime. The petition has brought into focus the interaction between the Income Tax Act and the statutory service conditions governing High Court judges.
Justice Sandeep Jain has approached the Allahabad High Court contending that statutory allowances granted under Section 22D of the High Court Judges (Salaries and Conditions of Service) Act, 1954 continue to enjoy tax exemption irrespective of the tax regime chosen by a judge. The plea argues that these exemptions arise from a special parliamentary enactment and cannot be nullified merely because a taxpayer opts for the new income tax regime under the Income Tax Act.
The allowances in question include the value of an official residence, conveyance facilities, sumptuary allowance and leave travel concession, all of which are specifically provided to High Court judges under the 1954 Act. According to the petition, these are statutory service benefits rather than ordinary salary components and therefore deserve continued tax exemption.
The petition challenges the interpretation adopted by the tax authorities, which reportedly denied the exemption after the judge opted for the concessional new tax regime. Justice Jain has argued that the Income Tax Act does not expressly repeal or override the exemptions granted under the High Court Judges Act, raising an important question regarding the harmonious interpretation of the two statutes.
A Division Bench of the Allahabad High Court has taken cognisance of the matter and sought responses from the Union Government and the Central Board of Direct Taxes (CBDT). The Court declined to grant immediate interim relief, observing that the relief sought was substantially similar to the final relief claimed in the petition. The matter has been listed for further hearing.
The case is being closely watched by the legal fraternity because its outcome may determine whether statutory tax exemptions available to constitutional functionaries survive under the new tax regime. A ruling in favour of the petitioner could influence the tax treatment of similar statutory allowances and clarify the relationship between special service laws and the Income Tax Act.
Beyond its immediate impact on members of the higher judiciary, the litigation raises broader questions of statutory interpretation, legislative intent and the extent to which special enactments providing tax exemptions remain operative under India’s evolving direct tax framework. The decision is therefore expected to have significance extending beyond the individual dispute.
