November 2009
Salary : S. 14, S. 15, S. 16 and S. 17 of Income-tax Act, 1961 and Article 164(5) of Constitution of India : A.Y. 1996-97 : Chief Minister of a State : Pay and allowances received is assessable under the head ‘salary’.
By K. B. Bhujle, Advocate
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Salary : S. 14, S. 15, S. 16 and S. 17 of Income-tax Act,
1961 and Article 164(5) of Constitution of India : A.Y. 1996-97 : Chief
Minister of a State : Pay and allowances received is assessable under the head
‘salary’.
[Lalu Prasad v. CIT, 316 ITR 186 (Patna)]
For the A.Y. 1996-97, the assessee was the Chief Mininster
of Bihar and he filed his return of income wherein the pay and allowances
received by him as the Chief Minister was shown under the head ‘Income from
other sources’. The Assessing Officer assessed the amount under the head
‘Salary’. The Assessing Officer allowed the standard deduction of Rs.15,000
and disallowed the claim for deduction of the incidental expenditure. The
Tribunal confirmed the assessment order.
On appeal by the assessee the Patna High Court upheld the
decision of the Tribunal and held as under :
“Article 164(5) of the Constitution of India expressly
provided for payment of salary to the Chief Minister. The assessee in his
return had himself stated that he was the Chief Minister of the State and
received salary from the Government of Bihar. The Assessing Officer had not
erred in changing the head of income to ‘Salary’.”
