3 weeks ago
Delhi High Court Halts Processing of Judges' Income Tax Returns
Judges are like referees who work in courts.
They earn money for their job, and they also get extra benefits, like a free place to live and money for travel.
Before, those extras were not counted as money that needs tax.
Tax is money people pay to the government.
Now there is a new tax rule that might change that.
Some lawyers were worried this was not fair, so they asked a big court in Delhi to help.
The court agreed and told the tax office to wait before processing the judges' tax papers.
The court also said the tax office must not take or give money until the court decides.
So for now, the judges' tax papers are on hold.
The Delhi High Court has directed the Income Tax Department not to process income tax returns filed by Supreme Court and high court judges under the new tax regime.
The directions came in two orders passed on 22 July and 10 August by Justices Dinesh Mehta and Rajneesh Kumar Gupta on a petition by the Delhi Tax Bar Association.
The petition challenges a 12 September 2025 CBDT memorandum stating that judicial allowances would not be exempt under the new tax regime.
The dispute centres on allowances such as rent-free official accommodation, conveyance allowance, sumptuary allowance and leave travel concession.
Judges' private secretaries must furnish details including PAN numbers; tax demands will remain in abeyance and refunds will be withheld until the case is decided.
- Who
- Supreme Court and high court judges, the Delhi Tax Bar Association (petitioner), Justices Dinesh Mehta and Rajneesh Kumar Gupta of the Delhi High Court, and the Income Tax Department.
- What
- The Delhi High Court ordered a halt to processing of judges' income tax returns filed under the new tax regime pending a legal challenge over the exemption of certain judicial allowances.
- Where
- New Delhi, at the Delhi High Court.
- When
- Two orders were passed on 22 July and 10 August, following a CBDT memorandum issued on 12 September 2025.
- Why
- To preserve the status quo while the court decides whether allowances such as rent-free official accommodation should remain exempt under the new regime, and because the electronic system cannot automatically identify returns filed by sitting judges.
Petitioners (Delhi Tax Bar Association)
Income Tax Department / CBDT
Exemption of judges' allowances
Petitioners (Delhi Tax Bar Association)
Allowances such as rent-free official accommodation and conveyance allowance are excluded from income computation under Section 22D of the High Court Judges Act, 1954 and Section 23D of the Supreme Court Judges Act, 1958, so they should remain exempt; the September 2025 CBDT memorandum is contrary to law and deprives judges of vested rights.
Income Tax Department / CBDT
The September 2025 CBDT memorandum states that these allowances are not exempt under the new tax regime, which does not generally provide for deductions and exemptions and instead offers lower tax slab rates.
Processing of judges' returns
Petitioners (Delhi Tax Bar Association)
Judges' returns should not be automatically processed because the system cannot identify sitting judges, risking tax demands against protected allowances; the memorandum also violates Articles 125 and 221 of the Constitution and interferes with judicial independence.
Income Tax Department / CBDT
Returns are processed electronically and the department's software cannot automatically identify returns filed by sitting judges; nearly 98% of returns could be processed without human intervention by the end of August, so judges' details including PAN numbers must be furnished.
Key facts
- Court
- Delhi High Court
- Bench
- Justices Dinesh Mehta and Rajneesh Kumar Gupta
- Petitioner
- Delhi Tax Bar Association
- Challenged document
- CBDT memorandum, 12 September 2025
- Statutory provisions
- Section 22D, High Court Judges Act, 1954; Section 23D, Supreme Court Judges Act, 1958
- Allowances in dispute
- Rent-free official accommodation, conveyance allowance, sumptuary allowance, leave travel concession
- Orders passed
- 22 July and 10 August
- Interim protection
- Tax demands in abeyance; refunds withheld, earlier refunds subject to outcome
Sources
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