Law:

Section:

Section 17 of the Income-tax Act, 1961 - Salaries, perquisites and profits in lieu of salary - Assessment year 1970-71 - Whether compensatory allowance payable to a Judge of High Court for his transfer to another High Court is in nature of compensation to counter balance loss or inconvenience suffered by him and such allowance cannot be equated with either salary or perquisite - Held, yes FACTS For the relevant assessment year the assessee, as Chief Justice of the High Court, received a compensatory allowance granted by a presidential order under article 222(2) of the Constitution of India and claimed the same as not taxable either as salary or income. The ITO upheld the assessee's contention. However, the Additional Commissioner held that the compensatory allowance was in the nature of salary as defined under section 17(1) or at any rate it amounted to a perquisite as defined under section 17(2) and, therefore, passed rectification order under section 263. On appeal, the Tribunal affirmed the view taking by the Additional Commissioner. On reference : HELD The salary of a Chief Justice or a Judge of a High Court is fixed by the Constitution itself, which cannot be varied to the disadvantage of the incumbent during his tenure. Article 222 of the Constitution of India, which provides for transfer of a judge from one High Court to another and it is in lieu of such transfer that the compensatory allowance becomes payable. The phrase used is "compensatory allowance" in addition to salary. The taxing authorities while interpreting this phrase tried to interpret the "compensatory allowance" by applying the principle of ejusdem generis and expressed the view that compensatory allowance would be additional salary. That interpretation could not be accepted for the simple reason that the dictum of ejusdem generis did not apply to the instant case. When the legislature has specifically provided for compensatory allowance, it can in no case be interpreted to be additional salary. The word "compensate" signifies counter-balance of loss sustained. It clearly implies that a judge by his transfer to another High Court has been put to some loss and, therefore, the allowance…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492