The division bench of the Delhi High Court has held that the definition of ‘relative’ under the Senior Citizens Act cannot be imported in IT Act and dismissed the Writ petition seeking gift tax exemption.
The petitioner, Miss Indira Uppal has filed a Writ petition seeking a direction that a ‘relative’ under Section 2(g) of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 be treated at par with a ‘relative’ under Section 2(41) and Section 56 of the Income Tax Act, 1961 for grant of exemption from income tax on gifts received.
The counsel for the petitioner submitted that Section 2(g) of the Senior Citizens Act defines the term ‘relative’ as ‘any legal heir of the childless senior citizen who is not a minor and is in possession of or would inherit his property after his death. The counsel further submitted that Section 2(41) of the IT Act defines ‘relative’ as ‘the husband, wife, brother or sister or any lineal ascendant or descendant of that individual and thus does not include the individuals who are defined as ‘relatives’ in the Senior Citizens Act.
The counsel for the petitioner contended that Sections 2(41) and 56 of the IT Act negate the rights and benefits for the welfare of childless Senior Citizens, thus making two classes of Senior Citizens, one who are parents and their children get benefits; and the second category of Senior Citizens who are childless, whose relatives under Section 2(g) of the Senior Citizens Act are deprived of benefits of tax exemption on Gifts. Hence, the gifts given to ‘relatives’ as defined under Section 2(g) of the Senior Citizens Act, 2007 be considered to be exempt from tax under Section 56 of the IT Act.
The Coram of Mr. Justice Manmohan and Ms. Justice Manmeet Pritam Singh Arora while dismissing the Writ Petition has held that from the object of both the Acts it is clear that the same expression ‘relative’ is not used in a similar context. A statutory definition in one context cannot be imported into another Act especially when the two Acts define the same term differently. The High Court further observed that the argument that the IT Act makes two classes of Senior Citizens Act is contrary to facts since the petition in no manner promotes the maintenance and welfare of senior citizens but only intends to avoid gift tax on the Donee.
Mr. Harish Uppal and Mr. Subhash Tanwar appeared on behalf of the petitioner and respondent respectively.
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