Gangtok: In a massive development, the Supreme Court of India struck down the exclusion of Indian settlers who had permanently settled in Sikkim before 26.04.1975 from the definition of “Sikkimese” in Section 10(26AAA) of the Income Tax Act, 1961.
The Apex Court also said that in “Provison to Section 10(26AAA) in so far as it excludes from the exempted category, “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008” is hereby struck down being ultra vires to Articles 14, 15 and 21 of the Constitution of India.”
This Section 10(26AAA) covers the income of a Sikkimese individual arising either in Sikkim or by way of dividend or interest on securities. As per the act, it is not to be included in total income for tax calculation.
“The exclusion of Old Indian settlers, who have permanently settled in Sikkim prior to merger of Sikkim with India on 26.04.1975 from the definition of “Sikkimese” in Section 10(26AAA) is hereby held to be ultra vires to Article 14 of the Constitution of India and is hereby struck down. It is held that all Indians/old Indian settlers, who have permanently settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975, irrespective of whether his/her name is recorded in the register maintained under the Sikkim Subjects Regulations, 1961 read with Sikkim Subject Rules, 1961 or not, are entitled to the exemption under Section 10(26AAA) of the Income Tax Act,” the judgement read.
Commenting on the challenge to the Proviso to Section 10(26AAA) insofar as it excludes from the exempted category, the SC said, “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008” is concerned, the Supreme Court there was no justification shown and/or demonstrated to exclude “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008” from the exempted category.
“…the same is clearly hit by Articles 14, 15 and 21 of the Constitution of India. The discrimination is based on gender, which is wholly violative of Articles 14, 15 and 21 of the Constitution of India. It is to be noted that there is no disqualification for a Sikkim man, who marries a non-Sikkimese after 01.04.2008,” the judgement read.
“As rightly submitted, a woman is not a chattel and has an identity of her own, and the mere factum of being married ought not to take away that identity,” the Court added.
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“…The exclusion of women from inheritance on the ground of gender was a clear violation of the constitutional prohibition against unfair discrimination. It is observed and held that in terms of Articles 14 and 15 of the Constitution of India, the female heirs, subject to the statutory rule operating in that field, are required to be treated equally to the male heirs. Gender equality is recognised by the world community in general in the human rights regime,” the Court observed.
“Even otherwise, there is no justification shown to exclude “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008”. A Sikkimese woman, who has married a non-Sikkimese prior to 01.04.2008 is entitled to the benefit of exemption provided under Section 10(26AAA). There is no justification shown to fix the cut off date of 01.04.2008. There is no rational nexus to the object sought to be achieved by excluding “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008” and to include “a Sikkimese woman, who has married a non-Sikkimese before 01.04.2008”. Therefore, to deny the benefit of exemption under Section 10(26AAA) of the Income Tax Act to “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008” is arbitrary, discriminatory and violative of Article 14 of the Constitution of India. Therefore, also, the Proviso to Section 10(26AAA) insofar as it excludes from the exempted category “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008” has to be struck down,” the Court observed.
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