ANJU MEHRA vs. THE COMMISSIONER OF INCOME(MAIN ITA DISMISSED ON 2.7.13)

PDF · subscribers
ITA/99/2003HC Punjab & HaryanaPHHC01047870200302 July 2013Bench: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of the legality and vires of Section 64(1A) of the Income Tax Act, 1961, had already been decided against the appellant in CWP No.13510 of 2003, titled Anju Mehra vs. Union of India and others, decided on March 22, 2012. In that writ petition, the High Court had held that Section 64(1A) is intra vires and that the power conferred under it to club the minors' income with the income of the parent whose income is greater is legal and does not suffer from any legal disability. Consequently, the present appeals, which raised the same question of law, were dismissed. The operative direction was the dismissal of the appeals.

What were the facts?

The appeals challenge an order by the Income Tax Appellate Tribunal (ITAT) affirming the clubbing of interest income earned by minors, Raghav Mehra and Varun Mehra, with the income of their mother, Anju Mehra. The Income Tax Officer initially clubbed the minors' income with the mother's income because her income was higher, instead of the father's. This decision was upheld by the ITAT. The assessee, Anju Mehra, had previously filed a writ petition challenging the constitutional validity of Section 64(1A) of the Income Tax Act, 1961, which was dismissed. The present appeals were filed by the assessee against the ITAT's order.

What were the issues?

1. Whether Section 64(1A) of the Income Tax Act, 1961, is legal and valid, particularly concerning the clubbing of a minor child's income with the income of the parent whose total income is greater. Assessee's contention: The assessee argued that the Income Tax Authorities were not justified in clubbing the minors' income with their mother's income under Section 64(1A) of the 1961 Act. They contended that the Act does not permit the clubbing of individual income of a minor and that Section 64(1A) was wrongly interpreted. Revenue's contention: The revenue submitted that the assessee had previously challenged the vires of Section 64(1A) of the 1961 Act by filing CWP No.13510 of 2003, which was dismissed. A subsequent review application was also dismissed. The revenue relied on the dismissal of the writ petition and review application as a precedent.

Which sections of the Income-tax Act were involved?

Section 64(1A)

AI-generated summary — verify with the full judgment below

ITA No.99 of 2003 1 IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH.

ITA No.99 of 2003

Date of Decision: 02.07.2013 Anju Mehra

....Appellant Versus The Commissioner of Income Tax-I, Amritsar and another ....Respondents ITA No.252 of 2003

Raghav Mehra C/o M/s Narain Dass and sons, Shastri Market, Amritsar r/o 36-A, Rose Avenue, Amritsar

....Appellant Versus The Commissioner of Income Tax-I, Amritsar and another ....Respondents ITA No.254 of 2003

Raghav Mehra C/o M/s Narain Dass and sons, Shastri Market, Amritsar r/o 36-A, Rose Avenue, Amritsar

....Appellant Versus The Commissioner of Income Tax-I, Amritsar and another ....Respondents ITA No.100 of 2003

Anju Mehra C/o M/s Narain Dass and sons, Shastri Market, Amritsar r/o 36-A, Rose Avenue, Amritsar

....Appellant Versus The Commissioner of Income Tax-I, Amritsar and another ....Respondents CORAM :- HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON

ITA No.99 of 2003 2 Present:- Mr. Alok Mittal, Advocate for the appellant. Mr. Dinesh Goyal, Advocate for the respondents.

*****

RAJIVE BHALLA, J. (ORAL)

By way of this Order, we shall dispose of ITA No.99 of 2003, ITA No.252 of 2003, ITA No.254 of 2003 and ITA No.100 of 2003 as they involve adjudication of a similar question of law. For the sake of convenience, facts are being taken from Income Tax Appeal No.99 of 2003. Challenge in this appeal is to an order passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, affirming the clubbing of interest income earned by minors Raghav Mehra and Varun Mehra with the income of their mother-Anju Mehra. Counsel for the appellant submits that Income Tax Authorities are not justified in clubbing the income of minors with the income of their mother by invoking Section 64(1A) of the Income Tax Act, 1961 (here-in- after referred to as `the 1961 Act'). It is further submitted that the 1961 Act, does not permit the clubbing of individual income of a minor and even otherwise, Section 64(1A) of the 1961 Act has wrongly interpreted. Counsel for the revenue submits that when the appellant, filed her income tax return, she filed an application that she has not included the income of minors in her income as Section 64(1A) is illegal. The appellant filed CWP No.13510 of 2003, challenging the vires of Section 64(1A) of the 1961 Act. The writ petition was dismissed on 22.03.2012. The appellant filed review application No.CW-235/2012 which was also dismissed on 18.05.2012. We have heard learned counsel for the parties, perused the

ITA No.99 of 2003 3 impugned order and the paper book. The Income Tax Officer, Amritsar clubbed the income of the minors with the income of their mother Smt. Anju Mehra in stead of clubbing it with the income of the father on the ground that the mother's income is higher. Aggrieved by this order, the appellant filed an appeal which was dismissed on 07.02.1995. The appellant, thereafter, approached the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar by way of another appeal which was dismissed on 28.11.2002. A perusal of the grounds of appeal and due consideration of arguments addressed, reveal that the only question of law is the legality/validity of Section 64(1A) of the 1961 Act which reads as follows :- “(1A) In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child : Provided that nothing contained in this sub-section shall apply in respect of such income as arises or accrues to the minor child on account of any -- (a) manual work done by him ; or (b) activity involving application of his skill, talent or specialized knowledge and experience. Explanation.- For the purposes of this sub-section, the income of the minor child shall be included -- (a) where the marriage of his parents subsists, in the income of that parent whose total income (excluding the income includible under this sub-section) is greater; or (b) where the marriage of his parents does not subsist, in the income of that parent who maintains the minor child in the previous year, and where ay such income is once included the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer is satisfied, after giving that parent an opportunity of

ITA No.99 of 2003 4 being heard, that it is necessary so to do.” The question as to legality/vires of Section 64(1A) of the 1961 Act has been answered in CWP No.13510 of 2003 Anju Mehra vs Union of India and others,, decided on 22.03.2012, a petition filed by the appellant by holding that Section 64(1A) of the 1961 Act is, ultra vires thereby holding that the power conferred under Section 64(1A) to club the minors income with income of the parent whose income is greater is legal and does not suffer from any legal disability. The question of law having already been answered against the appellant in CWP No. 13510 of 2003 of Anju Mehra vs Union of India and others decided on 22.03.2012. The appeal is dismissed.

(RAJIVE BHALLA) JUDGE (DR. BHARAT BHUSHAN PARSOON) 02.07.2013 JUDGE gurpreet

More judgments on Section 64(1A)

All 43 judgments and leading authorities on Section 64(1A) →

Recent GST High Court judgments

Search GST case law →