Punjab-Haryana High Court
Haryana Government College Teachers' ... vs Union Of India (Uoi) And Ors. on 18 September, 1990
Equivalent citations: [1991]190ITR15(P&H), (1991)99PLR589
JUDGMENT Gokal Chand Mital, J.
1. In this bunch of 60 writ petitions, the vires of Section 10(14)(ii) of the Income-tax Act, 1961 (as amended up to the insertion of the Direct Tax Laws (Second Amendment) Act, 1989), hereinafter to be referred to as the "Act", has been challenged on the grounds that there is excessive delegation of legislative power by Parliament to the Central Government and that the delegated power is unguided and uncanalised. In substance, the inaction of the Central Government in not exempting city compensatory allowance and dearness allowance by not including these two items in the exemption notification is the basis of challenge.
2. Section 2(24) of the Act defines income and, according to Sub-clauses (iiia) and (iiib) of this section, any special allowance or benefit, other than perquisite included under Sub-clause (iii), specifically granted to the asses-see to meet expenses wholly, necessarily and exclusively for the performance of the duties of an office or employment of profit and any allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of living are included in the income.
3. Counsel for the parties are agreed that city compensatory allowance and dearness allowance would fall under Sub-clause (iiib) of Section 2(24) of the Act. Accordingly, these two allowances would form part of the income as denned in Section 2(24) of the Act.
4. Section 10 of the Act relates to the income not to be included in the total income of the assessee. According to some sub-clauses of Section 10 of the Act, certain incomes which are not to be included in the income have to be specified by the Central Government. The case in hand relates to Clause (14)(ii) of Section 10 whereunder, unless the Central Government issues a notification, there will be no exemption for not including city compensatory allowance and dearness allowance in the income of the assessee.
5. The delegation of power has been made by Parliament to the Central Government. A reading of Sub-clause (ii) of Clause (14) of Section 10 of the Act shows that it is neither excessive nor unguided or uncanalised. No base has been laid for the argument. Accordingly, it is repelled.
6. Even if the delegation of power by the sub-clause ibid is held to toe bad by declaring this sub-clause ultra vires, the petitioners will not get any benefit because the Central Government will have no power to issue a notification exempting these two allowances. Accordingly, we are of the opinion that there is no merit in the challenge to the vires of Section 10(14)(ii) of the Act.
7. It is not disputed that even if the amendment was not made, which came into force in the year 1989 in Section 10(14) of the Act, these two allowances would be part of the income as defined in Section 2(24)(iiib) of the Act and had to be included in the income. The power conferred on the Central Government by delegation would rather be in favour of the asses-see if a notification is issued by it exempting both or any of these allowances from being included in the income of the assessee. Since there is no notification exempting these two allowances under Section 10(14)(ii) of the Act while computing the income of the assessee, the two allowances would form part of income.
8. This view of ours finds support from the decision of the Karnataka High Court in Karnataka Electricity Board Employees' Union v. Union of India [1989] 179 ITR 521, of the Patna High Court in Brooke Bond Employees Union v. Union of India [1989] 179 ITR 533 and of the Madhya Pradesh High Court in Coal Mines Officers Association of India v. Union of India [1990] 181 ITR 346. Accordingly, we are of the opinion that the Writ Petitions Nos. 1947, 2001, 2054, 2061, 2104, 2113, 2123, 2136, 2144, 2147, 2159, 2169, 2170, 2185, 2217, 2235, 2252, 2258, 2260, 2266, 2269 (with C. M. No. 3994 of 1990), 2278, 2309, 2325, 2327, 2357, 2358, 2372, 2382, 2390, 2450, 2466, 2470, 2503, 2520, 2545, 2571, 2572, 2573, 2873, 2878, 3196 of 1988 and 2497, 2549, 2775, 2800, 3127, 3249, 2430, 2697 and 2121 of 1989, 2458 of 1989, 1924, 1628, 1668, 1712, 1713, 1746 and 1805 of 1983 are devoid of merit and are dismissed with no order as to costs.