CBDT relief circulars bind tax authorities, and judge's conveyance allowance treated as reimbursement cannot cap the standard deduction.

A conveyance allowance paid to a High Court Judge was treated as reimbursement of expenses wholly, necessarily and exclusively incurred in judicial duties and therefore fell within section 10(14); the standard deduction under section 16(i) could not be restricted to Rs. 1,000. CBDT circulars and instructions granting administrative relief to taxpayers were held binding on income-tax and enforceable, so the revenue had to give effect to the relief-giving instruction and clarification.

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Issues: (i) Whether conveyance allowance paid to a High Court Judge fell within section 10(14) so that the standard deduction under section 16(i) could not be restricted to Rs. 1,000; (ii) Whether CBDT circulars and instructions granting administrative relief to taxpayers were binding on the income-tax authorities and enforceable by the Court.

Issue (i): Whether conveyance allowance paid to a High Court Judge fell within section 10(14) so that the standard deduction under section 16(i) could not be restricted to Rs. 1,000.

Analysis: The allowance was paid to Judges under section 22B of the High Court Judges (Conditions of Service) Act, 1954. The Board's instruction treated such conveyance allowance as falling within section 10(14) and stated that the officers need not insist on proof of actual expenditure to that extent. Once so treated, the allowance was regarded as reimbursement of expenses wholly, necessarily and exclusively incurred in the performance of judicial duties, and the restriction of standard deduction to Rs. 1,000 did not apply.

Conclusion: The restriction to Rs. 1,000 was not justified, and the assessee was entitled to the full standard deduction allowed by the Commissioner (Appeals).

Issue (ii): Whether CBDT circulars and instructions granting administrative relief to taxpayers were binding on the income-tax authorities and enforceable by the Court.

Analysis: The decision noted the settled distinction that Board circulars granting relief to taxpayers bind the departmental authorities, while circulars imposing a burden do not prevail against the statute. The cited Board instruction and letter conferred administrative relief on High Court Judges and therefore had binding force on the Income-tax Officer.

Conclusion: The CBDT instruction and clarification were binding on the revenue authorities and could be enforced.

Final Conclusion: The departmental appeal failed because the conveyance allowance of a High Court Judge was treated as reimbursed expenditure within the protected allowance regime, and the Board's relief-giving instructions bound the assessing authorities.

Ratio Decidendi: A CBDT circular or instruction granting administrative relief to taxpayers is binding on income-tax authorities, and a conveyance allowance treated as reimbursement of expenses within section 10(14) cannot be used to cap the standard deduction under section 16(i).

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