This Petition Seeks Quashing Orders Dated 18.1.2013 And 5.2.2013 (Annexures-N And O) And Direction Against Deduction Of Income Tax At Source In View Of Full Ben v. Union Of India And Ors. (2010) 2 Glr 367

WP(C) 1954/2013BEFOREHON’BLE THE CHIEF JUSTICE MR. A.K. GOELHON’BLE MR. JUSTICE A.K. GOSWAMI (A.K.Goel, C.J.) This petition seeks quashing orders dated 18.1.2013 and 5.2.2013 (Annexures-N and O) and direction against deduction of income tax at source in view of Full Bench judgment of this Court in the case of the petitioners being P.K. Taye& ors. Vs. Union of India and ors. (2010) 2 GLR 367. The petitioners are employees of the North Eastern Electric Power Corporation Limited (NEEPCO), a Government of India Enterprise. They are posted at different places in the State of Arunachal Pradesh and at Dima Hasao in the State of Assam. They belong to Scheduled Tribe Community and reside in tribal areas as specified in 6th Schedule to the Constitution of India. They are exempted from payment of tax under Section 10(26) of the Income Tax Act, 1961. They earlier approached this Court against deduction of tax in respect of earlier assessment years which was allowed by the Full Bench as above. It was held that no deduction of tax was permissible from their income. Accordingly, circulars dated 24.2.2010and 29.3.2010 were issued by the Income Tax Department to the said effect. Still, the Income Tax Department issued circular dated 18.3.2012 against which W.P.(C) No.4666/2012 and other writs were filed which were disposed of vide order 11.10.2012 permitting the writ petition to be withdrawn to enable the petitioners to make an application under Section 197 of the Income Tax Act. The petitioners thereafter filed declaration under Section 197A of the Act that their taxable income was nil and no tax was liable to be deducted from their income. In spite of filing of such declaration, the Department has directed that pending consideration of the declaration, tax may be deducted. We have heard learned counsel for the petitioners and perused the records, particularly the impugned order dated 18.1.2013 issued by the CIT (TDS) to the effect that in absence of certificate under section 197 of the Income Tax Act,tax may be deducted from the salary of the petitioners and the order dated 5.2.2013 issued by the NEEPCO to the same effect. Since the matter appears to be covered by the earlier Full Bench judgment of this Court in the case of the petitioners themselves, it is not considered necessary to issue notice to the respondents. The petitioners having been held entitled to exemption from payment of tax under Section 10(26) of the Act and the judgment of the Full Bench having attained finality, the respondents cannot act in violation of the said judgment on any pretext. If any procedural compliance is necessary, the petitioners have undertaken to comply with the same but there is no justification to deduct tax fromthe salary of the petitioners when no tax is due as per the decision of the Full Bench. Accordingly, this petition is allowed and the respondents are restrainedfrom deducting any tax from the salary of the petitioners in violation of law laid down by this Court in above Full Bench judgment.