Case Law Details
Institute of the Fransican Missionaries of Mary Vs Union of India (Madras High Court)
The common issue which falls for consideration in these batch of cases is as to whether the respondent, the Income Tax Department, is justified in insisting upon recovery of tax at source from the salary payable to Nuns/Fathers/Priests working in various Teaching Institutions established and administered by the petitioners.
High Court held that held that no tax can be deducted at source from the salaries and other monetary benefits effected to persons who are the members of the religious congregation and it would be sufficient if the head of the Institution concerned certifies the names of the staff members, who were members of the religious body and the period during which they have served and the designation of the post. No costs.
Please Note-
The above judgment was then challenged before a division bench of the Madras High Court by the Income Tax Department claiming that TDS should apply to the salaries of the missionaries who receive these from the state government directly. The judgment was supported by the assessees through the principle of diversion by overriding title along with the fact that when the income tax authorities have exempted tax liability of income of these missionaries for so long, there was no need for a sudden change given that the circumstances have remained the same. The High Court allowed the appeal by the Income Tax department and with due respect to Canon Law, set aside the single-bench judgment and directed for TDS applicability on salaries of missionaries. Case Citation: Union of India Vs The Society of Mary Immaculate (Madras High Court); Writ Appeal Nos. 391; Dated: 20/03/2019
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TDS is applicable for priest charges?