TaxTMI 
TaxTMI 
2026 (7) TMI 302
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....al, and the assessee has filed an application for condonation of delay. Considering the reasons stated in the application, the delay of 30 days in filing the present appeal is hereby condoned. 3. Brief facts of the case as mentioned in the Order of the Ld. CIT(A) is as under: - The appellant had filed the return of income for AY 2024-25 оп 17.07.2024 declaring total income of Rs. 37,730/- after claiming exemption of Rs 29,08,254/- u/s 10(26) of the Income-tax Act, 1961. The return was selected for scrutiny under CASS on the issue of exemption claimed u/s 10 of the Act. Notice u/s 143(2) of the Act was issued on 24.06.2025. During the course of assessment proceedings, multiple notices u/s 142(1) of the Act were issued....
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....25, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 07.01.2026, dismissed the Appeal filed by the Assessee. The Learned Counsel for the Assessee submitted that the Assessee is doing Work From Home for his employer in Meghalaya, Assessee is a resident of Meghalaya and the income of the Assessee accrued in Meghalaya. Thus, submitted that the Assessee has complied with all three conditions for the grant of exemption u/s 10(26) of the Act. The Learned Counsel further submitted that the Authorities below committed an error in disallowing the claim of exemption to the Assessee u/s 10(26) of the Act, amounting to Rs. 29,08,254/-. Therefore, sought for allowing the Appeal. 5. Per Contra, the Ld. DR vehemently ....
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....te and further certified that the Assessee is 'currently' working from home. In the said certificate of the employer, it is only certified that the Assessee is 'currently' working from home; therefore, it cannot be said that the Assessee has been working from home for the complete Assessment Year in question. Be that as it may. 7. Provision of section 10(26) of the Act, grants a limited exemption from income tax to members of Scheduled Tribes residing in specified tribal areas. The object of the provision is to promote the economic development of such areas and to provide tax relief to members of the Scheduled Tribes deriving income from those territories. The exemption, however, is not an unconditional or blanket exemption attached mere....
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....s clear that, in order to claim the exemption u/s 10(26) of the Act, the income should accrue or arise from a source situated in the notified areas or States. The States aforesaid include Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Tripura, or the areas covered by the notification, etc. 11. In the present case, the Department has no dispute on the compliance of first two conditions i.e., Assessee is a member of Schedule Tribe and also resident of specified area. The only dispute is regarding as to whether the income of the Assessee in question accrues or arises from a 'source' situated in specified area or not. 12. The Hon'ble Supreme Court in the case of ITO, Shillong v. R. Takin Roy Rymbai (1976) 103 ITR 82 (SC)held that ....
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.... territories/areas specified in the said sub-section, under clause (b) of section 10(26), such a restriction, regarding the territory (with reference to which the income arising out of dividend or interest on securities arise), is not applicable." 14. The Hon'ble Gauhati High Court in the Utankamoni Chakma v. Income Tax Officer (1989) 175 ITR 280 (Gauhati) held that salary income ordinarily accrues at the place where the employee performs the services giving rise to the salary and where the enforceable right to receive such salary comes into existence. The location of the employer's office or the place of payment is not, by itself, determinative of the situs of accrual. 15. The Hon'ble Supreme Court in the case of E.D. Sas....