A division bench of Madras High Court has held that salaries received by missionaries and nuns of Catholic Church for teaching services are liable to be subjected to Tax Deduction at Source(TDS) under Section 192 of the Income Tax Act. The Division Bench was hearing the appeals filed by the Income Tax Department against the judgment of a single bench, which had allowed the writ petitions filed by catholic religious institutions challenging steps taken for recovering TDS amount on salaries paid to priests/nuns employed in aided educational institutions.
The Division Bench of Justices Dr. Vineet Kothari and C V Karthikeyan set aside the judgment of single bench, holding that the salaries were received by them in their individual capacity and that the subsequent surrender of their salaries to the religious institutions can only be treated as an application of income. The Court further held that religious institutions cannot claim to have an overriding title with respect to the salaries at the source itself.
Section 192 Income Tax not concerned with religious character of assessee From a reading of Section 192 of the Income Tax Act, the Court held that the religious character of assessee does not impact the TDS liability. Section 192, without regard to the caste, colour, sex or religious bent of the person who receives the salary, makes the person responsible for paying any income chargeable under the head "Salaries" to deduct income tax at the rates prescribed, from such payment and deposit the same in the Treasury in the Account of Income Tax Revenue Department. If the income paid at the time of payment is chargeable under the head "Salaries" at that very point of time, the person responsible for paying the same shall deduct the income tax. The later treatment in the hands of the person who receives the income, whether it is treated as taxable or not, does not have any effect on the operation of the said provisions of Section 192.
Courtesy/By: Sakshi Shukla
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25 Mar 2019
