'Woman Not A Chattel, Has Identity Of Her Own; Marriage Won't Take Away Her Identity' : Supreme Court Strikes Down Income Tax Provision

The Supreme Court held that excluding Sikkimese woman merely because she marries a non-Sikkimese after 01.04.2008 from exemption provision under Section 10(26AAA) Income Tax Act is is totally discriminatory and thus unconstitutional.

A woman is not a chattel and has an identity of her own, and the mere factum of being married ought not to take away that identity, the bench of Justices M R Shah and B V Nagarathna observed.

Section 10 (26AAA) IT Act

Section 10 of the Income Tax Act lists incomes not included in total income. Section 10 (26AAA) reads as follows: In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included—....in case of an individual, being a Sikkimese, any income which accrues or arises to him- (a) from any source in the State of Sikkim; or (b) by way of dividend or interest on securities: Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after the 1st day of April, 2008, marries an individual who is not a Sikkimese.

In this case, the writ petitioners contended that Proviso to Section 10(26AAA) of the Act, 1961, insofar as it excludes from the exempted category, “Sikkimese women” who marries a non-Sikkimese after 01.04.2008 is discriminatory and unconstitutional.

Mere factum of being married ought not to take away women's identity.

The bench, while dealing with this contention, noted that there is no disqualification for a Sikkim man, who marries a non-Sikkimese after 01.04.2008. The court observed that there is no justification shown to exclude “a Sikkimese woman, who marries a non-Sikkimese after 01.04.2008” and there is no rational nexus to the object sought to be achieved by excluding “a Sikkimese woman, who marries a nonSikkimese after 01.04.2008” and to include “a Sikkimese woman, who has married a non-Sikkimese before 01.04.2008”.

Justice M R Shah, in the judgment authored by him observed:

The discrimination is based on gender, which is wholly violative of Articles 14, 15 and 21 of the Constitution of India. It is to be noted that there is no disqualification for a Sikkim man, who marries a non-Sikkimese after 01.04.2008. As rightly submitted, a woman is not a chattel and has an identity of her own, and the mere factum of being married ought not to take away that identity. In the case of G. Sekar (supra), it is observed and held that the exclusion of women from inheritance on the ground of gender was a clear violation of the constitutional prohibition against unfair discrimination. It is observed and held that in terms of Articles 14 and 15 of the Constitution of India, the female heirs, subject to the statutory rule operating in that field, are required to be treated equally to the male heirs. Gender equality is recognised by the world community in general in the human rights regime.

Stark example of an unconstitutional sex-based discrimination

In a seperate but concurring opinion, Justice B V Nagarathna observed that this proviso to clause (26AAA) of Section 10 of the I.T. Act, 1961, is a stark example of an unconstitutional sex-based discrimination:

"When a benefit is being given to a Sikkimese individual which would include all genders under the provision, by way of the Explanation being added, which is in the nature of a definition, the proviso cannot exclude a certain category of married Sikkimese women from the said Explanation and thereby, deprive them of the said benefit of exemption from payment of income tax on the basis of to whom they are married to. When the Explanation refers to an “individual”, it includes both Sikkimese men and women, in fact, all genders; it cannot have a restrictive or myopic reference to only Sikkimese men and exclude those Sikkimese women covered under the proviso. A proviso cannot over arch a provision. But in the instant case, the proviso is overriding the provision as well as the Explanation in respect of those categories of married Sikkimese women referred to in the proviso which is impermissible. Thus, the proviso is inherently arbitrary and discriminatory against a particular category of Sikkimese women. In other words, the Explanation to Section 10 (26AAA) of the I.T. Act, 1961 includes both Sikkimese men as well as women. Such being the interpretation, in my view, the proviso is antithetical to the Explanation and the Section as well."

Case details

Association of Old Settlers of Sikkim vs Union of India | 2023 LiveLaw (SC) 28 | WP(C) 59 OF 2013 | 13 January 2023 | Justices M R Shah and B V Nagarathna

For Petitioner(s) Mr. Senthil Jagadeesan, AOR Ms. Haripriya Padmanabhan, Adv. Ms. Pooja Dhar, AOR

For Respondent(s) M/S. Arputham Aruna And Co, AOR Mr. N Venkataraman, A.S.G. Mr. H R Rao, Adv. Mr. Devashish Bharukha, Adv. Mr. Sughosh Subramanium, Adv. Mr. Rajat Nair, Adv. Mr. Bhuvan Kapoor, Adv. Mr. Pranay Ranjan, Adv. Mr. Vikrant Yadav, Adv. Ms. C. Bharti, Adv. Mrs. Gargi Khanna, Adv. Mr. Raj Bahadur Yadav, AOR Mrs. Anil Katiyar, AOR Mr. Sameer Abhyankar, AOR Ms. Nishi Sangtani, Adv. Ms. Vani Vandana Chhetri, Adv. Mr. Narendra Kumar, AOR Ms. Neha Rathi, AOR Mr. Pranav Sachdeva, Adv. Mr. Kamal Kishore, Adv. Mr. Jatin Bhardwaj, Adv.

 Headnotes

Constitution of India, 1950 ; Article 14, 15, 21 - Income Tax Act, 1961 ; Section 10(26AAA) -  The exclusion of Old Indian settlers, who have permanently settled in Sikkim prior to merger of Sikkim with India on 26.04.1975 from the definition of “Sikkimese” in Section 10(26AAA) is hereby held to be ultra vires to Article 14 of the Constitution of India and is hereby struck down - (Para 13- 17)

Constitution of India, 1950 ; Article 14, 15, 21 - Income Tax Act, 1961 ; Section 10(26AAA) Proviso - Proviso to Section 10(26AAA) inasmuch as it excludes from the provision of exemption a Sikkimese woman merely because she marries a non-Sikkimese after 01.04.2008 is totally discriminatory and violative of Articles 14, 15 and 21 of the Constitution of India -  A woman is not a chattel and has an identity of her own, and the mere factum of being married ought not to take away that identity. (Para 15-17.1)

Income Tax Act, 1961 ; Section 10(26AAA) - Sikkim Subject Rules, 1961 - Sikkim Subjects Regulations, 1961 - All Indians/old Indian settlers, who have permanently settled in Sikkim prior to the merger of Sikkim with India on 26.04.1975, irrespective of whether his/her name is recorded in the register maintained under the Sikkim Subjects Regulations, 1961 read with Sikkim Subject Rules, 1961 or not, are entitled to the exemption under Section 10(26AAA) of the Income Tax Act. (Para 17)

Constitution of India, 1950 ; Article 14, 15 -  The female heirs, subject to the statutory rule operating in that field, are required to be treated equally to the male heirs. Gender equality is recognised by the world community in general in the human rights regime - Exclusion of women from inheritance on the ground of gender was a clear violation of the constitutional prohibition against unfair discrimination - Referred to G. Sekar Vs. Geetha & Ors. (2009) 6 SCC 99 (Para 15)

Constitution of India, 1950 ; Article 14 - Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation, which classification must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question - Referred to D.S. Nakara Vs. Union of India (1983) 1 SCC 305 (Para 13.2) 

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