Madras High Court orders status quo on income tax circular

 

Justice R. Mahadevan before whom two petitions filed by Nirmala Education Society, Coimbatore and Stella Maris College came up for hearing passed the interim order. 

Counsel appearing for Stella Maris College, Isaac Mohanlal, submitted that the colleges are minority educational institutions, which were exempted from levy and recovery of income-tax under Section 119 of the IT Act. The IT department passed the order following a circular from the Central Board of Direct Taxes (CBDT) dated December 5, 1977. He said from the time of embracing religious life, nuns and priests served the religious congregation or on its behalf. 

 

Therefore, any property or earning or salary accrued to them automatically became the property of the religious congregation to which they belonged. They severed their links with their families and became part of the spiritual family. This position had been upheld by the Supreme Court and high courts.