Delhi HC halts processing of IT-returns of Supreme Court, high court judges
The Delhi High Court has directed the income tax department not to process income tax returns of judges of the high court and the Supreme Court amid a dispute over exempting certain allowances under the new taxation regime.
A bench of justices Dinesh Mehta and Rajneesh Kumar Gupta has asked the private secretaries of the judges who have filed their returns under the new income tax regime to share their details with the authorities, including their PAN number.
The directions came in two orders passed on July 22 and August 10 on a petition by the Delhi Tax Bar Association.
According to the petitioner, certain allowances provided to the judges are totally excluded from the computation of their income on account of section 22D of the High Court Judges Act, 1954 and 23D of Supreme Court Judges Act (Salaries and Conditions of Service) 1958.
It is the petitioner's grievance that the Central Board of Direct Taxes (CBDT) on September 12, 2025, however, asserted that under the new regime, these allowances, such as rent-free official residence, conveyance allowance, sumptuary allowances and leave travel concession, shall not be exempted as it does not provide for any deductions and exemptions.
In the order passed on July 22, the court said that prima facie, sections 22D and 23D override all the provisions of the Income-Tax Act and the issue raised in the petition required consideration.
While clarifying that the judges may file their return or revised return reflecting the allowance amount under the caption 'receipts not in the nature of income', the court ordered, "The returns so filed by hon'ble judges of the high court and Supreme Court shall not be processed and proceeded with, until further orders."
On August 10, the income tax counsel submitted that the returns are processed electronically and the software by itself cannot identify which return belongs to a sitting judge.
He added that there is every likelihood that by the end of August, about 98 per cent of the returns would be processed without human intervention.
The court consequently asked the private secretaries of the judges to furnish details the relevant details to the authorities and further directed that in case any demand is raised after processing of the returns, it would be kept in abeyance during the pendency of the petition.
If any amount is found to be refundable, it shall not be refunded, and any amount already refunded to the judges shall be subject to outcome to the case, the court added.
The petitioner has contended that the CBDT's Officer September 2025 Memorandum is contrary to law, and "nothing short of interference in the independence of judiciary".
It has asserted that the memorandum takes away the vested right of the judges, and also violates Articles 125 and 221 of the Constitution, which guarantee that the allowances and salaries of judges of the Supreme Court and high court shall not be curtailed or varied to their detriment from the date of their appointment.
