A sitting judge of the Allahabad High Court, Justice Sandeep Jain, has approached the Allahabad High Court challenging the denial of income tax exemption on statutory judicial allowances after opting for the new tax regime.
The petition questions the validity of a Central Board of Direct Taxes (CBDT) Office Memorandum that disallows such exemptions for taxpayers choosing the concessional tax regime under Section 115BAC of the Income Tax Act.
The matter came up for hearing on Monday before a Division Bench comprising Justice Saumitra Dayal Singh and Justice Swarupama Chaturvedi. At the outset, the Bench sought to ascertain whether the State had any objection to the matter being heard.
Buy Now: INCOME TAX E-COMPILATION – JUNE 2026
After the State expressed no objection, the Court called for instructions from the respondents, observing that the petition could not be decided ex parte. The Bench also noted that the interim relief sought by the petitioner was substantially in the nature of the final relief claimed in the writ petition. The case has now been directed to be listed as a fresh matter on July 28.
The controversy centres on Section 22D of the High Court Judges (Salaries and Conditions of Service) Act, 1954, which grants income tax exemption on certain statutory benefits available to High Court judges. These include the value of the official residence, conveyance facilities, sumptuary allowance, and leave travel concession.
Justice Jain contends that these exemptions are statutory in nature and continue to remain available irrespective of whether a judge opts for the old or the new income tax regime. However, when he attempted to file his Income Tax Return (ITR-2) for the financial year 2025–26 under the new tax regime, the income tax portal allegedly did not permit him to claim an exemption of approximately ₹9.85 lakh towards these judicial allowances. Instead, the portal reflected that the exemption was available only under the old tax regime.
The petition specifically challenges the CBDT Office Memorandum dated September 12, 2025, which clarifies that exemptions relating to statutory judicial allowances are unavailable to taxpayers who opt for the new tax regime.
According to the memorandum, the new tax regime already provides lower tax rates, liberal tax slabs and enhanced rebates. Therefore, allowing taxpayers to additionally claim exemptions available under other statutes would amount to granting a double benefit.
Justice Jain argues that the CBDT’s interpretation is contrary to law and unlawfully deprives judges of benefits expressly granted by Parliament.
Before approaching the High Court, Justice Jain is stated to have submitted representations to both the Central Board of Direct Taxes and the Union Finance Minister seeking clarification and restoration of the exemption.
According to the petition, the only response received was a communication referring to the CBDT Office Memorandum, without addressing the statutory basis of the claim.
The writ petition argues that the High Court Judges (Salaries and Conditions of Service) Act, 1954 is a special enactment governing the service conditions and entitlements of High Court judges. It contains a non-obstante clause, and therefore, its provisions prevail over the general provisions of the Income Tax Act wherever there is any inconsistency.
Justice Jain contends that executive instructions, office memoranda, or administrative clarifications cannot override or dilute statutory rights conferred by Parliament. He further submits that the service conditions of High Court judges enjoy constitutional protection and cannot be altered to their disadvantage through executive action.
According to the petition, the impugned Office Memorandum unlawfully interferes with these statutory safeguards by denying exemptions specifically provided under Section 22D.
The court has sought the quashing of the CBDT Office Memorandum dated September 12, 2025, insofar as it denies the benefit of Section 22D exemptions to judges opting for the new tax regime.
He has also requested a direction permitting him to file his income tax return under the new tax regime while claiming exemption of ₹9.85 lakh towards statutory judicial allowances under Section 22D of the 1954 Act.
In the alternative, he has sought permission to file his return under the old tax regime, with liberty to claim a refund if the High Court ultimately rules in his favour.
