TaxTMI 
TaxTMI 
2009 (12) TMI 285
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....loyment, they were exempted from payment of income-tax in view of section 10 sub-section (26) of the Income-tax Act, 1961, till the assessment year 2005-06. However, subsequent to that, i.e., with effect from the assessment year 2005-06 onwards, the employer had been deducting income-tax at source without any prior notice to the petitioners. Hence, the present writ petition with the prayers as follows: "(i) To direct the respondents to give exemption to the petitioners from paying income-tax under section 10(26) of the Income-tax Act, 1961. (ii) To direct the respondents to refund the income-tax to the petitioners already deducted at source in the previous assessment years of the petitioners concerned." 6. The above narrated basic facts are not disputed by the respondents. 7. Section 10 of the Income-tax Act stipulates that in computing the total income of any person for any year, the income falling under various categories specified under the various sub-sections of the said section shall be excluded. Relevant to the context is sub-section (26) which reads as follows: "10. In computing the total income of a previous year of any person, any income falling within any ....
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....ility of the claim of the petitioners, an analysis of section 10 sub-section (26) is required. In our view, section 10 sub-section (26) stipulates that in computing the total income of an assessee, who is a member of a scheduled tribe as defined in clause (25)* of article 366 of the Constitution, (1) any income, which accrues or arises to him from any source in the areas or States mentioned in sub-section (26), should be excluded, and also (2) income, arising by way of a dividend or interest on security, is also required to be excluded irrespective of the territory from which such accrual has taken place. However, there are certain other conditions, specified under sub-section (26) which make the benefit provided under sub-section (26) available only to the members of the scheduled tribes "residing in any areas"specified in the said section. In other words, * 366.(25) "Scheduled tribes"means such tribes or tribal communities or parts of or groups within such tribes or tribal communities as are deemed under article 342 to be scheduled tribes for the purposes of this Constitution. the members of the scheduled tribes residing in other parts of the country, other than the one spe....
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....f such power, the notification was issued specifying certain areas of the then State of Assam. However, for the purpose of conferring the benefits under section 10 sub-section (26), Parliament thought it fit that notwithstanding the scheme of paragraph 20 of the Sixth Schedule to the Constitution and the authority of the Governor to exclude certain areas and the consequential decision of the Governor to notify by the abovementioned notification, those areas are also required to be treated on par with other parts of the North Eastern areas of the country. 13. Eventually, the question involved in the present case turns upon the words "residing in any area specified" occurring in section 10 sub-section (26). 14. To determine the true meaning of the expression the following questions are required to be examined: 1. Does it deal with the residence of an individual member of a scheduled tribe specified "with respect to"any State or Union territory; or 2. Does it deal with the residence of the entire tribe specified in relation to certain areas specified in section 10(26) of the Income-tax Act. In other words, is the expression synonymous with the expression "with respect to"o....
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....bers of such tribe, inhabiting in such other part of the country, do not get the recognition of belonging to a scheduled tribe. Similarly, members belonging to a tribe recognized to be a scheduled tribe with reference to a particular State, when they migrate to another State, are not entitled as a matter of right for recognition as members of a scheduled tribe in the State of their immigration and claim the benefits offered by such State to the scheduled tribes notified in relation to that State. (See Marri Chandra Shekhar Rao v. Dean, Seth G.S. Medical College [1990] 3 SCC 130 and Action Committee on issue of Caste Certificate to Scheduled Castes and Scheduled Tribes in the State of Maharashtra v. Union of India [1994] 5 SCC 244). 17. Every member of a scheduled caste or scheduled tribe need not always stay at the place of his origin, where the scheduled caste or scheduled tribe, as the case may be, is recognised to be a scheduled caste or scheduled tribe under the provisions of the Constitution. The complexity of the modern world creates innumerable reasons for migration, the most primary reason being the compulsions of economic necessity. The question then is whether members ....
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....essary and perhaps desirable for the Legislatures or Parliament to consider appropriate legislations bearing this aspect in mind so that proper effect is given to the rights given to scheduled castes and scheduled tribes by virtue of the provisions under articles 341 and 342 of the Constitution. This is a matter which the State Legislatures or Parliament may appropriately take into consideration." 19. However, in S. Pushpa v. Sivachanmugavelu [2005] 3 SCC 1 the Supreme Court, for the first time recognised the distinction between recognition of a person to be a person belonging to a scheduled caste/ scheduled tribe and the right to claim the benefits available by virtue of reservation in favour of scheduled castes or scheduled tribes. The Supreme Court also held that in relation to a particular State does not necessarily mean that when such a person migrates to another State from the State of his origin, he would cease to be a member of a scheduled caste or scheduled tribe altogether and becomes a member of a forward caste. At paragraph 20 the Supreme Court held as follows (page 14): "This exercise has to be done strictly in accordance with the Presidential Order and a migrant....
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....ision whereunder the benefit of reservation is extended only to such scheduled castes or scheduled tribes which are recognised as such in relation to that State or Union Territory then such a provision would be perfectly valid. However, there would be no infraction of clause (4) of article 16 if a Union Territory by virtue of its peculiar position being governed by the President as laid down in article 239 extends the benefit of reservation even to such migrant scheduled castes or scheduled tribes who are not mentioned in the Schedule to the Presidential Order issued for such Union Territory." 21. A Division Bench of this court in Mahendra Kamprai v. State of Assam [2008] (4) GLT 863, on an elaborate consideration of the issue in the light of the various pronouncements of the Supreme Court held that the authority of the State to extend special treatment contemplated under article 15(4) or 16(4), as the case may be, in favour of persons belonging either to scheduled caste and scheduled tribe, as the case may be, in relation to some State of the Union of India but migrating to another State, came to the conclusion that nothing in the Constitution prevents the State from extending ....
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....rt had an occasion to consider the scope of section 10(26), in a case, reported in Smt. Dipti Doley Basumatary v. Union of India [2007] 290 ITR 498 (Gauhati); [2007] (3) GLT 348, and held as follows (page 503 of ITR): "All the writ petitioners are transferred from different areas mentioned in the Table to paragraph 20. Therefore, their residence in the State of Meghalaya and in Bodoland cannot be construed to be 'fleeting . Question would have been altogether different had their stay been casual, passing or purely temporary. The word 'residing' occurring in section 10(26) cannot be given restricted interpretation confining the benefit of exemption only to the local members of the scheduled tribes. We are unable to hold that the words 'residing' connotes permanent residence relatable to the concept of 'domicile'. The benefit of exemption is given to the members of the scheduled tribe for economic advancement of the tribal areas vis-a-vis financial benefit to the individuals. Therefore, a very casual or passing presence of a person would be incompatible with the legislative intent. But so far the writ petitioners are concerned, they have been residing in the State of Meghalaya and....
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....ertificate to Scheduled Castes and Scheduled Tribes in the State of Maharashtra v. Union of India [1994] 5 SCC 244, it is well settled that a member of a scheduled tribe, migrating from the place of his origin, where the tribe to which he belongs is notified by the President to be a scheduled tribe in relation to that particular State within whose territorial limits such person' s place of origin is located, does not carry the status of a scheduled tribe along with him. Consequently, the benefit under section 10(26) of the Income-tax Act also cannot be claimed by a member of a scheduled tribe once he migrates from the State (State of origin) where the tribe to which he belongs to is notified as a scheduled tribe. 28. We are unable to accept the submission made by the learned counsel for the Department for the following reasons: As already noticed by us in S. Pushpa v. Sivachanmugavelu [2005] 3 SCC 1, the Supreme Court has already held that it is not the question of a person carrying his status of membership of scheduled tribe from one State to another State, but the question is one whether the State to which the claimant migrates is willing to extend any special treatment to ....
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....ation of the People Act, 1951. Section 7 read with the Second Schedule declare the total number of seats with respect to the Legislative Assemblies of each State. Section 3 of the said Act read with the First Schedule specifies the number of seats in respect of each of the States to be reserved in favour of either scheduled castes or scheduled tribes in the House of People (Lok Sabha). As to which particular seat in a particular State is to be reserved either in favour of scheduled castes or scheduled tribes visaf vis the Legislative Assembly of the State or Lok Sabha is a matter to be determined by the Delimitation Commission under the Appropriate Delimitation Act, the details of which may not be necessary for us. But such exercise is undertaken from time to time and seats are specified in each State which are reserved in favour of either a scheduled caste or a scheduled tribe. The Constitution does not prescribe that a seat reserved either in favour of a scheduled caste or a scheduled tribe, either in the House of People (Lok Sabha) or the Legislative Assembly of a State, shall not be filled up by electing a scheduled caste or a scheduled tribe candidate, as the case may be, unle....
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....s follows: ' "elector" in relation to a constituency means a person whose name is entered in the electoral roll of that constituency for the time being in force and who is not subject to any of the disqualifications mentioned in section 16 of the Representation of the People Act, 1951.' Under section 19 of the Representation of the People Act, 1951, a person is entitled to be registered as an elector in the electoral roll prepared for a constituency 'if he is ordinarily resident in a constituency'. Therefore, it follows that the Representation of the People Act permits persons to contest the election to fill up a seat reserved either in favour of a scheduled caste or a scheduled tribe without insisting upon the residence of such a person in the particular constituency which he seeks to represent. More particularly in the context of the Lok Sabha, a person, belonging to either a scheduled caste or scheduled tribe, is not denied the benefit of the status as a scheduled caste or scheduled tribe, as the case may be, by reason of his seeking to contest a reserved seat in a State other than the one with respect to which such a person is recognized as a person belonging to schedu....
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....ed tribes in the said autonomous districts bears to the total population of the State.} and 332(1){Seats shall be reserved for the scheduled castes and scheduled tribes, except the scheduled tribes in the tribal areas of Assam, in Nagaland and in Meghalaya, in the Legislative Assembly of every State.} Therefore, in our view, the expression "residing in any area specified", occurring under section 10(26) is used by Parliament synonymously with the expression "in relation to any area specified" under the said sub-section. In our view, the expression "residing in any area specified" is not meant to be restrictive of the benefit provided under the said sub-section in the case of members of the scheduled tribes, who, otherwise, fall within the scope of the said section, but migrating to one of the places specified in the said sub-section but only descriptive of the limited number of scheduled tribes, which are residents of the areas specified under section 10(26) of the Income-tax Act. 33. It may also be kept in mind while interpreting the said sub-section that the benefit contemplated therein is sought to be given to a specific class of assessees with reference to the income arising....